Presentation to Heads and Managers Forum26th September 2012

Dr Michael B. Murphy, President, University College Cork

Presentation Outline

1. Financial Situation

2. HR Summary

3. Research Funding

4. UCC Response to the Financial Situation

UCC Financial Performance 2007-12

• Recovered recurrent deficit position

• Improved Cash position

• Improved Capital Deficit position

• 46% reduction in Core Grant since 2008 peak of €84m (€46m in 2012)

• Exchequer funding has fallen from 84% to 62%

• Not all of this income reduction felt in annual budgets given pay cuts and higher student contribution, however

• Annual reductions in total budget available across University

• Negative service impact

• UCC must minimise expenditure in September 2012

• Further cost reduction will be required to break-even this year

Overview of Last 5 years Financial Performance

2006/07 2007/08 2008/09 2009/10 2010/11

€000 €000 €000 €000 €000

Total Income 261,167 261,719 301,154 284,000 268,510

Total Expenditure 266,611 260,829 290,293 282,505 267,959

Surplus / (Deficit) (5,444) 890 10,861 1,495 551

Cumulatative Deficit (13,923) (13,033) (2,172) (677) (126)

Capital Deficit (42,000) (35,000) (22,000) (13,300) (14,000)

2013 Budget Overview

• Further 6.5% reduction anticipated in Core Grant from 2012 level

• Non Exchequer income at same level as 2011/12 except of year 2 of ACMS• Non exchequer income not growing at a pace to match reductions in exchequer

funding

• Changes to PG supports will lead to a reduction in PG income

• Increase in student contribution charge of €250 offset by corresponding €250

reduction in “free fees” – student payment issues

• Savings required across the University to deliver a balanced budget

• All areas to contribute – try to minimise impact on student facing areas

• Limited scope for investment and essential maintenance

• ECF will require reduction in FTE and pay

2013 - 2015 Scale of Immediate Fiscal Challenge

• €8.6bn reduction in public expenditure to reach 3% deficit target by 2015

• Since 2008 income including research has dropped from €313m to €252m in 2012/13

• Based on 2012 reduction, impact on UCC to 2015 assessed at a further exchequer income reduction of €21.1m

• This will have knock on effect on other sources of exchequer income - Research Funding and overhead, HSE funding, Skills, Fottrell, GEM, Access, Quality

• When adjusting for the above and unavoidable increases in expenditure (e.g. Increments, maintenance) over the next 5 years, UCC will be required to make good c€25m of a funding adjustment to deliver similar level of service as in 2012

• Student Contribution anticipated to grow to €3,000 no net gain Tuition Fee will fall pro rata likely bad debt impact and no net gain to University

• No opportunity for critical/strategic investment unless the €25m can be found

2013 – 2015:Assessment of Impact on UCC (€m)

  

2012Actual

2013Forecast

2014Forecast

2015Forecast

2012-15 Change

Forecast Net Annual Reduction in Funding in Exchequer Related Funding 5.70 8.48 7.47 5.11

 

21.1

Staffing Increase - Super Critical Posts 3.20 0.00 * 0.00 * 0.00 * 0.00 *

Increments 0.80 0.80 0.90 0.90 2.6

Research Overhead Reduction 2.50 0.80 0.50 0.50 1.8

Strategic Funds 1.20 0.00 0.00 0.00 0.0

Non Pay Pressures - Energy/WGB/VAT 0.60 0.00 0.00 0.00 0.0

Total Funding Gap 14.00 10.08 8.87 6.51 25.5

Cumulative Funding adjustment/Savings 14.00 24.08 32.95 39.46 25.5

5 Year Impact of Income Reduction across UCC

Income Change 2008/9 to 2012/13 - Excluding Research

               

  €,000 UCC CACSSS B & L M & H SEFS Central/ Other                 

  2008/09 210,616 44,408 30,936 48,245 52,278 34,749  

               

  2012/13 194,583 42,334 25,832 52,289 42,079 32,049  

               

  Movement (16,033) (2,074) (5,104) 4,044 (10,199) (2,700)  

                 

 

Final Budget Movement 2008/9 to 2012/13 - Excluding Research

                 

  €,000 UCC CACSSS B & L M & H SEFS Central/Other  

                 

  2008/09 210,616 28,945 17,678 36,216 33,892 93,885  

               

  2012/13 194,583 28,557 18,081 42,242 30,870 74,833  

               

  Movement (16,033) (388) 403 6,026 (3,022) (19,052)  

                 

 -  While  Income has fallen by €16m since 2008/9 - priority has been given to maintaining budgets in Colleges

 - As a result most Colleges have had limited reduction in final budgets with the exception of SEFS 

  - M & H net budget has increased due to the introduction of GEM and ACMS

 - To avoid reductions in Colleges budgets beyond 2012/13 - must grow non exchequer income

Reduction in Staff FTE 2008-2013

• FTE figures (Core Staff) December 2008 •

1,911.50

• FTE figures (Core Staff) as at December 2012

Target: 1,728.60 9.6% reduction from 2008

• Anticipated FTE Ceiling 2013

1676.7 52 FTE reduction from December 2012 figures 12.28% reduction from 2008

Staff Reductions 2008-2012

Research Funding: Challenges and Opportunities

• Increasingly competitive national funding programmes

• Sustainability of research infrastructure

• Significant change in emphasis Excellence with Impact National Research Prioritisation Exercise

• Proportion of non-exchequer income increasing to compensate for decrease in national exchequer funding opportunities

• Increased resource from FP7; Horizon 2020 will bring further opportunities with considerable alignment with UCC research strengths

• SFI Centre programme

• Research career framework – clarity

Input: Research Expenditure — Exchequer versus Non-exchequer (% Contribution)

2006-2007 2007-2008 2008-2009 2009-2010 2010-20110

2000

4000

6000

8000

10000

12000

14000

16000

18000

Input: EU-FP7 New Award Research Income (€k)

Since 2008-2009, there has been a 222% increase in the value of new research awards secured by UCC researchers from the European Commission

FP7 Performance [to Nov 2011]

Participations Successful Participations

% Success Rate

Funding (€/M)

€/FTE Researcher*

TCD 560 125 23% € 51.6 47,731

UCC 526 125 24% € 43.3 52,720

UCD 516 122 24% € 45.3 38,154

NUIG 381 80 21% € 27.4 -

DCU 278 54 19% € 14.6 -

UL 172 35 20% € 11.4 -

WIT 152 26 17% € 11.1 -

NUIM 99 13 13% € 4.1 -

DIT 85 10 12% € 2.5 -

RCSI 56 13 23% € 8.0 -

CIT 48 7 15% € 1.3 -

*FTE data taken from last Forfás HERD survey

Inputs: Industry New Award Income (€k) New Awards

  2007/2008 2008/2009 2009/2010 2010/2011*Industry-sponsored Projects

 1

 19

 29

 35

Non Exchequer Income 2008 - 2011 (€k)University Total

Non E

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Inco

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Non E

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me

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EU PG

Fee

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Non E

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Subsid

iary

Compa

nies

- Net

Sur

plus

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2010/11

2009/10

2008/9

UCC Steps to Protect Education Quality: Income Growth

1. The pace of exchequer funding reduction is not being replaced quickly enough by new income

2. UCC must continue to do more with less - if we cannot replace reductions in exchequer income with new non exchequer income - unavoidably have to reduce expenditure

3. University 2009 Income Generating Policy being updated

4. Income generation now incorporated as part of strategic planning process

5. All staff must participate in income generation

6. Incentives to foster income diversification

7. Cap EU undergraduate admissions

8. Focus on fee-paying EU postgraduate recruitment

9. Focus on non-EU undergraduate, postgraduate and PhD recruitment

10. Focus on part-time, distance and adult learners

11. Overseas programme delivery where feasible and profitable

UCC Steps to Protect Education Quality: Efficiencies

1. Manage the teaching burden through new learning technologies

2. Reduce the examination burden

3. Robust review of current bureaucracy - Mapping of support staff deployment moratorium on support staff appointments adoption of redeployment

4. Employ all new staff funded by non-exchequer income, through a wholly-owned UCC subsidiary company

5. Prioritise research that is important and affordable

6. Procurement

7. Opportunities to close/ merge/consolidate programmes must be taken – should not continue with unviable programmes

8. Engage vigorously with government (via IUA) on the national policy imperatives