Panel discussion with Sheffield Hallam University, the University of Greenwich, and the University of Exeter on the near-term financial impact of COVID-19

Expert Insight

Panel discussion with Sheffield Hallam University, the University of Greenwich, and the University of Exeter on the near-term financial impact of COVID-19

As part of an initiative to assess the impact of the coronavirus pandemic on the higher education sector, EAB partnered with the Association of Heads of University Administration (AHUA) to collect data from UK providers across four main areas of interest: immediate cost and loss estimates, tactics to increase liquidity, tactics to contain costs, and confidence in future budget planning assumptions. EAB has previously published some of the results and analysis of this data on Wonkhe and also presented a webinar in partnership with AHUA, which can be viewed on-demand above.

As part of that webinar, EAB’s Gary Guadagnolo convened senior leaders from Sheffield Hallam University, the University of Greenwich, and the University of Exeter for a panel discussion about the financial impact of the pandemic to date. The transcript of the conversation follows; it has been edited for brevity and clarity.

Meet the panellists

Richard Calvert (RC)

Richard is the Deputy Vice-Chancellor (Strategy and Operations) at Sheffield Hallam University (SHU). He is head of the University’s administration, with overall responsibility for the University’s professional services. Prior to joining SHU, Richard held roles in professional service functions in central government, from the Department for Education to the Department for International Development.

Louise Watson (LW)

Louise is the Chief Financial Officer at the University of Greenwich. In her role, she oversees management of the University’s finances and procurement function along with the strategic planning and business intelligence activities across the University. Before joining the University of Greenwich, Louise had a number of Finance Director roles at Royal Mail managing the finance budgeting, long-term planning processes and financial performance of various business units with revenue/cost base of £1bn-£5bn.

Mike Shore-Nye (MSN)

Mike is the Registrar and Secretary at the University of Exeter. He oversees the institution’s professional services, operations, and governance. He has a long history of working in higher education, as Director of Residential and Leisure services at the University of Liverpool to Chief Operating Officer at Queen Mary University of London immediately prior to joining the team at Exeter.

EAB: Can you describe your institution’s response to the COVID-19 pandemic to date in just one word and then describe why you chose it?

RC: Measured – We keep seeing media coverage about how challenging this crisis is, the gloomy scenarios of how all of this will play out. But there’s still so much that we don’t know. We’re still guessing – particularly in relation to home student enrolments. What are young people going to think about coming to university in the autumn? We’ve tried to hold off from taking any decisions we may regret and keep our focus on what we want to achieve in the long term.

MSN: Humbling – I’ve been humbled by the amount of work and the quality of work that’s been done by the institution. For example, last year we facilitated 45 exams digitally, whilst this year we’ve delivered 54,000. In the last couple of weeks, we’ve been engaging with the whole university community on this question of where savings should come from. I’m humbled by the three principles we developed: to do our best to avoid compulsory redundancies; to protect lower-paid staff; and to concentrate all our efforts on protecting the student experience and supporting our research base.

EAB: Could you talk about the financial impact that you’ve seen to date, and any levers that you’ve had to pull in the short term to either increase liquidity or address some of these immediate costs?

MSN: We have estimated the immediate cost of the pandemic to be about £25M – a result of the decision to let students break their residence contracts, and also the loss of expected commercial income in the summer months.1

We saw significant savings from eliminating travel and concentrating research activity to a few buildings. We utilised the governmental furlough scheme, and we’ve also implemented additional layers of control over expenditures. Our CFO looks at cash flow every day and has reduced the limits that individual line managers can spend, resulting in significant savings.

We are, however, also ramping up investments. We’ve made about £10M worth of capital investment to improve IT resilience and increase capacity to take all our physical degree programs and make them available in blended or alternative formats. We think that switching from a physical to digital offering very quickly is the best way to protect ourselves in case of a second spike in the virus.

RC: In the immediate term, it’s a slightly different story for us. We don’t run our own accommodation or have any kind of conference business, so we haven’t had to take a hit there. In an odd and slightly calm-before-the-storm way, we’re seeing a marginally positive impact right now because of the expense reduction actions we’ve taken, like what Mike and Louise have described, without a big hit on revenue.

At the same time, we’ve decided to take advantage of a quiet campus and accelerate some capital spending and maintenance projects. We’ve also very consciously stepped up spend on student support, particularly for disadvantaged students. We’ve seen that 10-15% of the student population has really struggled to engage with online provision because they don’t necessarily have a safe and secure place to be working.

EAB: How have you balanced the quick, short-term decision-making that needs to take place day to day with the long-term strategic direction of your institution and the sector?

RC: We’re trying to use a no-regret approach – what are the sensible decisions we can take now that we are not going to regret later. We’re also conscious of the need to keep staff with us. We’re asking a lot of them right now, especially our academics who will need to use their summers to prepare for a different mode of delivery in the autumn.

We also recognise that as we go into next year, even if we do see a significant impact on income, there’s a limit to what we can do to mitigate costs in the very short-term. We just have to accept that there are some decisions about long-term cost drivers that are not going to realise short-term benefits. It’s important that any decisions we make are in line with our long-term strategic direction.

EAB: What does your budget planning, enrolment forecasting, and scenario planning for the autumn look like?

EAB: What do you think about this idea that’s been circulating, to reimagine the teaching model altogether, and pivot to cheaper online experiences that target a much larger cohort of students?

RC: We’re fundamentally not thinking about radically changing our overall approach and model. Clearly, we’re thinking about different delivery modes through the autumn. And we’re doing as much as we can to understand students’ attitudes. But there’s still a really strong interest in the campus experience, so we’re not seeing a significant shift in preference towards an online offering for the majority of our prospective students. They want to get back to face-to-face interaction. We accept that there may be need for a blended approach in in the medium term, but for us it’s about the long-term vision of where we want to be over the next few years.

EAB: On a final note, what is something from the past couple of months that has worked well and that you would like to carry forward into operations, even in a post-coronavirus world?

MSN: Virtual engagements are fantastic. It normally takes me a week to go around and talk to everyone, but I did a Microsoft Teams broadcast to 2,000 staff last week. It was great, and we got loads of input. We’re also going to try and move to approximately 50% of staff working from home at any one point in roles where that’s possible. And that will allow us to reduce our estates footprint, and our carbon footprint as well. And I think travel is going to change dramatically. So, lots of positives to come in the long term.

1 After the webinar, EAB received an update from Mike Shore-Nye with refreshed figures estimating the immediate cost of the pandemic. The University of Exeter’s costs are now closer to £25M than the £14M mentioned on the webinar recording.

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