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Higher Education Finance Living with uncertainty

Higher Education Finance Living with uncertainty. Carol Prokopyszyn Assistant Director of Finance . Former United States Secretary of Defence Donald Rumsfeld.

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Higher Education Finance Living with uncertainty

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  1. Higher Education FinanceLiving with uncertainty Carol Prokopyszyn Assistant Director of Finance

  2. Former United States Secretary of Defence Donald Rumsfeld “There are known knowns; there are things we know we know.We also know there are known unknowns; that is to say we know there are some things we do not know.But there are also unknown unknowns – the ones we don't know we don't know.”

  3. Known Knowns • Major shift in government policy towards HE • Not just motivated by the need for cuts, but shift towards more market based sector • Students = market power (perhaps)

  4. Known numbers • Oct 2010- Department for Business, Innovation & Skills announced 25% revenue budget cut and 44% capital cut in 2014/15. • Higher Education funding will reduce by 40% from £7.1 bn to £4.2 bn. • Lord Browne recommended higher fees- government announced £9,000 UG cap.

  5. Where have we been….

  6. Operating surplus

  7. The new H/EU landscape • Core and margin approach – 20,000 students moved around sector each year – an opportunity for some and a threat for others • No limits on recruitment of AAB+ students – an opportunity for growth (for some!) • Active encouragement for private providers to enter the sector • Funding follows the student

  8. Known unknowns • What will students do? • Will they still want to come to University? • Will they want to come to the same institutions and the same courses? • What will their expectations be? • What about PG funding? • What research funding will be available?

  9. Revolutionor evolution? • Will we have the same number of institutions? • Will we see mergers? • Will some become ‘for profit’? • More concentration – restructuring? • Can research be sustained in so many institutions? • Or will it all look quite similar in ten years?

  10. Unknown unknowns • Would you have predicted this? • Still changing very fast • Other risks remain – international students / the Euro / ???

  11. Implications

  12. Financing changing expectations....

  13. Generating funds • Opportunities for pricing • Premium products / margins • Matching the ‘high – street’ • Cost control • Working with others? Partnerships with other HEIs and the private sector • Replacing capital funding?

  14. The University of Leicester- 2010/11- Known numbers! • Income over £260m • Expenditure over £250m • Surplus over £9m, a good result • Capital expenditure almost £40m • Good financial position to face funding challenges

  15. Income 2010/11- Leicester knowns

  16. HE Finance – unknown future?

  17. What will HE Finance look like?

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