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Great news for university business officers might not mean great news for students

The good news is that university business officers are reporting that income is up. But Jim Dickinson thinks there might be a downside for students.
This article is more than 2 years old

Jim is an Associate Editor at Wonkhe

Great news everyone! A press release from a PR agency brings the news that the College and University Business Officers (CUBO) annual benchmarking survey for 18/19 is out, and all the graphs are going in the right direction.

On average income from residences, catering and conferencing grew a whopping 11% against the previous year. Residential income makes up two thirds of that, with a sizable £532.3m trousered by just 30 institutions – so it easily tops a billion once everyone else is added in.

Meanwhile total catering income from the 33 institutions reporting their activities was £208.6m. And 24 reporting institutions even managed to bank £40.3m from “sport”. Trebles all round!

The price is right

Maybe these big increases are thanks to the operations being run more efficiently. Or maybe not. Not in the press release (but in the detailed report), we find that the average price of a single laundry wash was £2.51 in 2017/18 (this year £2.70) and a cup of coffee averaged £1.50 (this year £2.09).

Increases could be due to inflation and could be different participants providing data – but as the report makes clear, “the average prices [for catering] are significantly above those reported in the previous survey on all measures.” And we don’t need CUBO to tell us what’s been happening in halls – Unipol/NUS puts the increase in the price of university operated accommodation since 2011 at almost a third.

There’s endless discussion in the UK about fees and the loans that accompany them, and some discussion about “hidden costs” – things like resit fees, lab coats, bench fees and field trips. And to the extent to which we discuss the cost of student accommodation, the focus is usually on greedy baby boomer landlords or the “Purpose Built” sector with its global investors and often sky-high profits.

But maybe we need to talk about universities themselves too.

I’m out

Pricing, of course, matters. From a simplistic perspective, it can make the difference between participating or not – in a group study session in a coffee shop, or moving to a particular town to pursue an academic dream, or in some of the more socially exclusive subjects. It sends important signals – even when Access and Participation Plans send out parcels of pocket money-levelling, pricing helps to set out what we think “normal” looks like, and who “belongs” in a place.

When higher education was more socially exclusive, student life was cheaper. “Digs” were affordable. “Gig” prices had an “NUS” rate. One of the first student campaigns I was involved with back in the mid-90s was the retention of UWE’s budget meal – because we believed that higher education ought be a leveller. The levellers, like all my favourite things from the 90s, have gone now.

What we’re not talking about here is “leisure” spend. I completely disagree with, but do understand the debate that accompanied the introduction (and withdrawl) of the Educational Maintenance Allowance in FE some years back. The allegation was that some students were spending it on CDs, socialising and so on – but this CUBO report is talking about roofs over students’ heads, food in their bellies and their use of fitness equipment, not Spotify and alcopops.

Time was that universities would complain about how hard it was to make money from a 30-week a year operation, and doubtless that’s still true in some pockets of the sector. But much university-provided accommodation is dangled to first year undergraduates as if the mere allocation of a space is a benefit in and of itself to be grateful for, regardless of the profit to be made from that arrangement. Miss it, miss out on the default student experience, and all that.

And university catering – often the only option for a busy student juggling part time work or caring responsibilities – still benefits from a generous tax break, maintained to keep costs low for students. Except it doesn’t seem to be being passed on to the intended beneficiaries in many places.

Sadly, what we don’t get here is numbers per institution, and it’s less than a third of the sector that’s taking part. HESA data helps to a limited extent, but this is certainly not the sort of topping that is showing up in those UUK VFM pizzas – and “commercial confidentiality” makes it pretty difficult for everyone from journalists to students’ union officers to find out the numbers. Shouldn’t we know how much students (and staff) are chipping in?

It all goes on the student experience you know

Some have argued to me over the years that we musn’t ever return to the dark days when university catering or accommodation was “subsidised”, and that makes some sense – until you look at all the other subsidies we maintain across the sector – from teaching to research, from international to home, from subject to subject and from the well-off to the poor.

And anyway, in most institutions, we’re really not talking about subsidy. We’re talking about a choice – to get the largely locked-in (and therefore arguably rigged) market to “bear” a certain price for being healthy, eating and having somewhere to live – and then using that price to contribute to a university’s bottom line rather than students’ bottom lines.

I’m not suggesting that the money is wasted, but this involves choices. And every time we choose to dodge a tough decision about what a university might need to stop spending money on in order to deliver a lower price, we push those tough choices back onto students – between things like eating and paying the rent.

In the research SUs did on value for money a year so back, just 4 in 10 students agreed that “other charges/fees/costs at my university represent/represented good value for money” – a major contributor therefore to influential voters in their twenties and thirties that feel ripped off.

More transparency to students and their representative organisations on the profits being made ought to be simple. Much better data, within universities and around the UK, on the actual day to day financial reality students face would help too – it seems extraordinary that DfE’s “Student Income and Expenditure” survey hasn’t (as far as we know) been (re)commissioned since the middle of the last decade. A poke around by the CMA into the fairness these “markets” represents also wouldn’t go amiss.

And once we’ve got that data, a positive duty – both on universities, and within them on distributed decision makers – to think about the financial situation of their students and do all that can be done to bear down on the costs they face would also help.

You know that thing when a university has to make savings and “everyone has to do their bit” and there’s a thing where you send in suggestions about personal printers and whatnot. Well imagine if everyone – the people drawing up reading lists, those negotiating printing contracts, catering managers, graduation gown officers, field trip organizers and yes timetablers and estates managers – if everyone in a university was asked to help to get the cost of being a student down. IMAGINE.

There are real educational, social and health prizes on offer if we choose to take them. And anyway – why should accessing a decent hot meal for £2.00 between classes – with all the wellbeing benefits that would bring – remain a scandinavian dream?

3 responses to “Great news for university business officers might not mean great news for students

  1. Not disagreeing with the central point but…keeping costs down though invariably means keeping a lid on staffing, against the pressures of delivering student experience, SSRs, league tables etc. so it isn’t easy to do. Most HEIs are also hot on procurement of goods and services. Consequently, HEIs have to look at raising income just to stand still, and this can’t be done through UK UG fees nor relying on the OFS, and diversifying income sources is what most businesses strive to achieve to mitigate risk. Of course, income raised stays within the HEI to benefit students and keep the HEI afloat.

  2. “Shouldn’t we know how much students (and staff) are chipping in?” Absolutely, ‘staff’ are often stuck at the top of their section/band of the payscale, so no annual increment. Not so bad if your in the upper half of the overall payscale perhaps, but those lower down have been facing hikes in costs well beyond the value of the annual pay rise percentage. So year on year a pay cut in real terms, and with so many campuses out of town, or not supported by local businesses, all too often bought out and closed down by their employer to increase on campus sales profit there’s not much option but to spend on campus, or having to bring in tea/coffee etc from home.

    The price of a Mars Bar, a staple when I was a student too busy to eat during the day in the 1970’s, shows just how bad things are, when you can buy 4 for £1 in most supermarkets I’m surprised campus shops can sell many at all, though you might a struggle to find them with all the faddy ‘cult’ ‘health’ offerings sold on most campuses.

  3. Alex. Sure – but what if it was somehow the law to keep prices low? Would universities have collapsed? Would the education be demonstrably worse? And if not and the argument is “the problem is the incentives”, what are the incentives that would work on pricing?

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