REPOSITIONING UCL Þ ENHANCE CORE ACADEMIC STRENGTHS Þ MOVE FROM DEFICIT  BALANCED BUDGET  SURPLUS Progress Report from the Provost 26/06/02 1)Introduction/Background 2)Some Comparisons with other universities 3)Budgets 2001/02, 2002/03, 2003/04,… 4)Repositioning process and progress 5)Timetable and Conclusion

INTRODUCTION/BACKGROUND Following years of cuts in funding and under-investment in maintenance, need – reduction in costs and/or increase in income (by the outstanding deficit + £4.5m pa to fund maintenance properly + desired surplus for future developments) AND – ability to sustain a continued increase of income(or decrease in costs) to compensate expected continued under indexation (e.g. 2% of “free” income of £175m  £3.5m pa) Clear that must reduce staff costs (  £125m of “free” income) and focus on core strengths (emphasising academic coherence and links - UCL is a university - as well as income generating capacity)

UCL vs. OTHER UNIVERSITIES Many other universities face major financial difficulties, but there are some special features at UCL: – Open (merit, no quotas) academic promotion policy, plus relatively high (if inadequate) professorial salaries  should protect, but  very high academic staff costs – Largest charity income (£64.5m) of any UK university, which only pays direct costs (although it generates some QR): arguing (  CSR) for government to fill funding gap on charity and Research Council funding (+ fund RAE, SRIF 2 without matching funds,…) – Particularly large maintenance backlog – excellent student: staff ratio  there is scope to reduce staff without damaging competitive position if it is done carefully, focusing on core teaching and key research strengths 

BUDGETS 2001/02-began facing £10.8m deficit  income generation/savings programme (IGSP), target £7.0m, plus asset sales £3.8m -IGSP  £6.75m, but asset sales have not materialised and meanwhile goal posts moved  currently estimate £5.0m deficit 2002/03-assuming savings identified in 2001/02 consolidated  initial deficit of £8.7m (but with budget in which [alreadyinadequate] maintenance was only increased 1% in cash) -so far identified £3.2m in staff savings - more to come, and hoping for additional income 2003/04-facing any outstanding deficit from 2002/03 plus £3.7m shortfall currently predicted [Note: if CSR  funding restored for 5 rated Depts (possible)  + £5.4m, 4 rated (conceivable)  + £1.6m, 3 rated (almost inconceivable)  + £100k]

PROCESS & PROGRESS 2001/02 IGSP - detailed work/prioritisation by VPs with HoDs, supported by Finance Division and Deans  decisions by Provost and VPs Since March working, on basis of evidence (student: staff ratios, income/academic, income/m², student applications,...), on repositioning and in parallel (in the context of emerging repositioning strategy) on IGSP*: – Identify core teaching + key research strengths plus possible structures for 2010 cost  how to get there – With few exceptions, not looking to close whole areas/Departments (UCL’s core strength as a genuine university with across the board strengths must be fostered) - looking for key subdisciplines/themes, with emphasis on mutual links and objective evidence of academic and financial strengths: this detailed work can be led but not done centrally –Increased role of Deans (endorsed by Council March 2002) in support of VPs - essential for looking across Departmental boundaries * Also examining central services and administration

Phase 1 - March - Mid June VPs + Deans + HoDs  repositioning options  intensive work on IGSP for 2002/03 Six discussion/feedback/brainstorming meetings of Provost, VPs, Deans, Senior UCL officers  Provost + VPs for IGSP decisions Phase 2 Provost meeting separately/systematically Faculty by Faculty with VP + Dean + HoDs, and in some cases whole Faculty  assess/cost/decide on repositioning Present Status: in one case outcome essentially clear and savings target met, clear pictures emerging in some others - many good proposals for more efficient delivery of excellent teaching and greater coherence in research

TIMETABLE June - September - complete phase 2 and talk to unions on major proposals for change prior to: Finance Committee, 30 September - hope to report substantial progress on 2002/03 IGSP plus longer term financial outlook Council Strategy Meeting, 21 October - will present repositioning plans 21 October - 19 December - discussion at Planning & Resources, Academic Board, talk further to unions Council, 19 December - approval of reposition plans CONCLUSIONS IGSP - £6.75m in 2001/02 + over £3m already identified for is a major achievement, but not enough Repositioning - focusing on core strengths/themes is key, but difficult: needs work across the board; hard to identify/quantify savings and enhancement of income generating capacity BUT it can/must be done and will ensure UCL’s future as a great university