In the Times Higher Education magazine of 20 November, there was an article based on a report by financial firm, Grant Thornton, which claimed that Aston was one of seven UK universities which would fall into the red, in the event of a drop in international student income.
Unfortunately this presents a misleading picture of Aston’s current finances, our ability to cope with the global economic downturn, and our international recruitment prospects.
Please therefore see below for an open letter from our Vice-Chancellor, Professor Julia King, which sets the record straight and which will hopefully allay any fears about Aston’s financial security.
The Grant Thornton report featured in the THE (20 Nov) states that Aston University could be vulnerable in the event of a downturn in overseas student income.
In fact, Aston’s finances are extremely robust. Our surplus for 2007/8 was over £3.6m – well up from £95,000 in 2006/7. We would therefore be able to comfortably withstand a 10% drop in overseas student income. Furthermore, we have been able to meet the impacts of the recent pay settlement, increased university pension fund contributions and soaring utility bills in full, unlike many other universities. We also have substantial financial reserves.
But we are not complacent. Overseas student recruitment is recognised as one of our top two university risks, with plans in place to address it. Over the past eighteen months these have included additional appointments in our Pro Vice Chancellor team and international office and the agreement and implementation of a new international strategy. As a result we have significantly widened our international recruitment base and reduced the proportion of overseas students we recruit from any one country. Our new residences scheme will provide high quality accommodation for home and overseas students. Whilst we would expect the economic downturn to affect recruitment in some overseas markets, our international recruitment remains strong, and of course the fall in the value of the Sterling against other currencies is working in favour of UK universities.
It is unfortunate that the THE has chosen to focus on just one of the financial pressures which the university sector is facing. I have already mentioned three others: pay, pensions and utility bills. The reduction in Engineering and Physical Sciences Research Council (EPSRC) funding over the past three years adds a fourth: Research Fortnight on 19 November reports that a number of our leading research universities have seen drops in EPSRC funding over the past three years of as much as 50 to 70% - tens of millions of pounds in each case.
At Aston, as in most organisations, we are looking at our revenue and cost streams to identify vulnerabilities, but we have no cause for concern. Indeed we will shortly be announcing some exciting university investments in new research centres across all four of our Schools and we have further funding earmarked for research initiatives over the next 3-5 years. In a recession we believe that innovation and good risk management are the best way forward.
Professor Julia King