1. Money Matters: Financial Planning in Academic Libraries Jill Taylor-Roe Head of Liaison & Academic Services Newcastle University UKSG: Introduction to Financial Planning – London 20 May 2010

2. Objectives for this session Outline some of the typical financial planning structures that are found in academic libraries Highlight how these may evolve in the context of the challenges currently facing HE Facilitate comparison with prevailing systems and structures in the publishing and library supply sector Inform discussion on how we can all work together more effectively

3. Why is financial planning important? “Take care of the pence and the pounds will take care of themselves” Lord Chesterfield – Letters to his son The only power worth having is resource power because it enables you to do what needs doing. Dr. Brian Enright - Librarian “ Money is only important for what it will procure” John Maynard Keynes: A tract on Monetary Reform

4. Why is financial management important? Enables us to stay in business! Helps us to be competitive Helps us to provide the best and most cost effective services for our users Enables us to demonstrate to our paymasters that we are appropriate and effective managers of the funds they entrust us with Helps us to make sound business cases and plans for future service enhancement

5. How does an academic library get its budget? The cynic’s view... It’s just a lottery We get what’s left after the Academics have had their share It depends who you know the Financial gurus cook up something with a complicated formula We slug it out with the other central services

6. How does an academic library get its budget? The planning cycle : Strategic plans for next academic yr submitted to senior University management groups of varying composition Sometimes an opportunity for library input to deliberations – often not Timing –anytime between Nov – April ( for August budget start)

7. What goes into these planning statements? Inflation predictions for key commodities (staff, materials, services) Costs of any planned new developments and rationale for implementing them Any special circumstances which may have an impact on spending e.g. Currency weakness, VAT changes Comparative data from other institutions – e.g. SCONUL stats KPIs to demonstrate how well or badly we have performeed over the last yr

8. Some typical KPIs Financial input indicators Library grant as % of total Library income Library grant as % of total University income Financial output indicators Gross Library Expenditure per student FTE Gross Information Expenditure per student FTE Service output indicators Number of personal visits per student FTE Items loaned per student FTE Use of electronic journals per student FTE Efficiency indicators Expenditure on Library staff per student FTE Self-service loans as % of total loan transactions at Robinson Library Value for money indicators Expenditure on information as % of total library expenditure Expenditure on electronic resources as a % of total library expenditure Expenditure on staff as % of total library expenditure Cost per use of articles in electronic journals Cost per seat hours per annum

9. What other information do we include? Data from student feedback, satisfaction surveys – e.g. NSS, ISB Usage stats – aim to demonstrate VFM in relation to financial outlay Business cases to support requests for new investment – whether capital or recurrent Evidence of alignment with Faculty and School strategic plans Risk Assessment data

10. What do our paymasters want from this process? Evidence of prudent and effective financial management for the yr just ending Sound business cases for onward investment Strategic alignment with University strategic objectives Plus, ideally, evidence of competitive edge over comparator libraries !

11. When do libraries know their budget??... Great variation in practice.. Sometimes a provisional budget notified in April Firm Budget generally notified May- Aug, BUT can be as late as Sept -Oct Typically no appeals....

12. What sort of challenges are we expecting in 2010/11? Continuing weakness of sterling vs euro and dollar Possible increase in VAT to 20% Reduction in overall spending power because of HE budget cuts – steady state, 5% ? 10%? 15%? 20% ? Freeze on staffing or pressure to cut Freeze on new capital investment Need for “efficiency gains” Pressure to address student satisfaction survey issues with no extra cash Yr end spend bonuses in June/July likely to be a thing of the past

13. Issues & Comments : Internal Planning documents are often v time consuming and complex to complete Future gazing – up to 5 yrs ahead – v difficult unless you are psychic! Late changes to Faculty/School plans can cause problems “Efficiency gains” may be required at short notice We are competing with other sections of the University for a limited pot of funds

14. Issues & Comments : External July/Aug notification of budget leaves little time for slippage if jnl renewals due in by 30 Sept Late notification of publisher pricing policy can cause real problems Double digit inflation liable to result in cancellation Publishers pushing new products to libraries before all big deal offers known unlikely to get many takers 2010-11 likely to be toughest fiscal round for last decade

15. Dividing the Spoils - what libraries do when they get their budget Staffing – largely fixed costs – need to be determined first Resources – books, serials etc. Operating Costs ( e.g. equipment, recruitment, staff devpt ) Income Generation – e.g. reprographics, printing, thesis binding

16. Allocating the Resource Budget Often done by formula – at least for books Unit of account invariably School or Dept Big Deals – account for major resource share but hard to share out costs Thus often top sliced but... Leaves less flexibility elsewhere in the budget Fund management may be done by library or Dept/School

17. Monitoring Expenditure Invariably monthly reports/review, tho’ more frequent towards yr end University may require quarterly updates Library management system and/or spreadsheets used to obtain core data May need to be interpreted to comply with Uni report format Strategic Reports go to key stake holders – e.g. Registrar, PVC, Finance Director Regular reports go to library managers Exceptional costs have to be accounted for Bookfunds often vulnerable if Serials overspend Bale out funding highly unlikely

18. Summary Points (1) Bidding for library funds is a challenging and highly competitive process Libraries are required to demonstrate that they have deployed resources effectively in pursuit of the University’s core business objectives Once funds are allocated there is very little likelihood of extra funding – esp in the current fiscal climate.

19. Summary Points (2) There is very little time between receiving a budget and having to allocate major resource spends – e.g. serials Publishers can help by setting prices as early as possible and providing us with info which demonstrates VFM – e.g. Timely and accurate usage data Intermediaries can help by chasing up price notifications and helping with expenditure analyses and predictions.