Briefing on Redundancies ahead of 30 June Branch Meeting

Management has announced voluntary redundancies.

The branch committee heard about this on Friday 19 June. The documents were circulated to us around 11AM ahead of the Covid-19 Joint Consultative Forum (Covid-19 JCF) at 3PM. Management seemed to expect that they would then be able to publicise the scheme the next working day.

The branch committee’s view is that this is not an attractive scheme, and will only be of interest to members who were already planning to leave within the next few months. It is less generous than other voluntary redundancy schemes announced (e.g., Birmingham) and the timeline to apply is too rushed to allow members who were not already planning to leave to understand the financial implications, especially with respect to pensions.

Top down ‘leadership’

The approach to implementing the voluntary redundancy scheme continues the approach that senior management has taken throughout the crisis (and before). That is, management by edict, devoid of genuine and meaningful consultation with unions, and disempowering of local line management and front-line staff.

There is an alternative way to run a university that will see better decisions being made and good work being done, not because just as a matter of personal pride or a sense of duty, but because we feel fundamentally part of Queen Mary and are genuinely jointly responsible for any difficult decisions.

The starting point for all decision-making must be a recognition that staff make the university, not buildings, KPIs and strategic plans. The university is what emerges from the day-to-day work of everyday staff. Without them, and they work they do with students and research collaborators, there is no university.

Numbers to Inform the Discussion

Some Queen Mary facts are germane¹:

Staff salaries are about half of all operational spending (£270m out of £525m).
Student fees generate about half of all operational income (£250m out of £485M).
In the set of published financial statements, our work generated almost £50m in cash, and is expected to be higher for the 2019/20 financial year.
Capital expenditure (new buildings and renovations) have been mostly delayed, given that some of this was to be funded out of the operating surplus, that given extra financial headroom.
The university borrowed £160m through a bond placement in January 2019. That money has not been spent, and is not tied to any particular projects.

The Government’s New Support Schemes

In the broader context, the government has announced a small research grant scheme and larger combined grant and loan scheme. The schemes are designed to help universities continue cutting edge research where charity and business funders have been lost (the grant scheme) and those who fund research out of international student fees (the grant and loan scheme)².

The first scheme is a grant scheme provides the opportunity for universities to apply for cash grants, from a pot of £280m, not all of which is new money (£80m is reallocated UKRI money). This money is used to extend existing research grants.

“around £280 million government funding will be made available to universities and research organisations impacted by coronavirus for grant extensions. The first amounts will be made immediately available and will provide additional resource and flexibility to sustain grants funded through UK Research & Innovation (UKRI) and the National Academies and affected by the coronavirus pandemic … funding includes supporting researchers’ salaries and other research costs such as laboratory equipment and fieldwork. UKRI will contact universities and research organisations with details of their grant extension allocation shortly.”³

The second scheme is a grant and loan scheme that includes the following attractive sounding line from the government’s press release is:

“The [second scheme] University Support Package of loans and grants will cover up to 80% of their income losses caused by an expected decline in international students, compared with overseas student revenue in 2018/19. The package will support up to 100% of non-publicly funded research.”⁴

The scheme is a grant and loan scheme because 25% of the eligible amount will be in the form of a grant, the balance as a loan.

The explanatory notes provide more detail⁵.

Realistically, Queen Mary is unlikely to be able to receive more than a small number of millions from the grant scheme. The £280m will be spread across 24 Russell Group universities and a small number of specialist research institutions and non-Russell group institutions with important research projects. However, that money could help keep fixed term researchers employed who would otherwise be made redundant because charities or businesses can no longer meet funding commitments.

Between the schemes, internally funded research (common in the humanities and social sciences) and research funded by charities and businesses (more common in science, technology, engineering and medicine) seems be 100% covered, where that work cannot be otherwise funded. Where the grant scheme does not cover the projects, the combined grant and loan scheme will.

However, between the press release (the examples given) and reporting (where journalists will have been briefed by government), we should be slightly less optimistic:

There is a strong emphasis on a narrow set of STEM topics (corona-virus and green-economy related).
Worryingly for humanities and social sciences, the explanatory talk about internally funded research, but this is downplayed in the press release and news reports.
There is strong emphasis on ‘quality research’, and the government has been sceptical about humanities and social sciences research (there is no mention of either in the press release or explanatory notes).
The scheme will not be available until international student numbers are known in Autumn (universities can only apply based on the difference between this year’s and last year’s actual international student revenue).
The grants and loans will be competitive and subject to further refinement of the criteria, not likely to be available until the Autumn.
The money will be contingent on evidence that efficiencies have been made (which the government might take to include cutting internally funded research time in areas that are not national priorities).

It might be useful to see some numbers relevant to Queen Mary, from 2018-19 (the 2019-20 financial year finishes on 31 July), again from the financial statements cited above.

£38m from research charities
£14m from industry and commerce
£52m of research income that is eligible to be covered by the scheme
£112m of full time international student fee income

The grant and loan scheme only covers the lower of the two key criteria so, if only half of last year’s international students sign up for September, the most that Queen Mary would be able to claim is 80% of £61m (£49m).

It is important to note that, the labour that would have been used to teach the lost international students is not covered. That cost must be addressed either by loans, allocation of surplus generated elsewhere, or redundancies.

Considering Alternatives

Our branch meeting tomorrow will need to consider some of these alternatives and develop a collective position on how we are willing to adjust to an (as yet unknown) drop in student fee income. These alternatives include temporary pay cuts (also called salary sacrifice, perhaps to be treated as loans), restructuring and (non-voluntary) redundancies, further borrowing and deferment of capital projects, continued restraint on non-pay expenditure (e.g., no conferences), etc., and of course combinations of these and other possibilities.

[Updated 29 June to clarify that there are two schemes operating, the £280m grant scheme and the grant and loan scheme]

Briefing on Redundancies ahead of 30 June Branch Meeting

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