Induction for Council Members:
Planning & Budgeting Process
Agenda
1. University’s ambition, peer group & KPIs
2. Planning & budgeting process
3. Major challenges
4. Priorities & Key performance targets 2014/15
Ambition
Ambition
“To be firmly established in the
top 10 UK universities by 2020”
In practice this means being positioned 4th –
9th every year in all the major league tables.
Significant improvements in league table rank have contributed to an enhanced reputation
but there is still more to do ….
Who do we compare ourselves with?
Drawing from our strategy, we have established a set of key performance
indicators (KPIs) that help direct our investments and measure our progress.
We evaluate our performance with reference to a peer group of 10 UK universities
who we are competing with as a Top 10 UK University:
• Bath
• Loughborough
• Bristol
• St Andrews
• Durham
• Warwick
• Edinburgh
• York
• Lancaster
• University College London
Target is to be
ranked at least
4th within this
group – that
will ensure
we’re firmly in
top 10 overall
Key Performance
Indicators
University KPIs
Student-related
• Entry standards
• Retention
• Achievement
• NSS
• Employability
• % international
students
Others
• RAE/REF
• Research £ per
academic staff FTE
• Research students
per academic staff
FTE
• EBITDA
KPI Chart: Performance Against the Competitor Group
Previous Rank
Latest Performance
Projection
Rank 4th
Exeter Average Performance
1
Rank in Competitor Group
3
5
7
9
11
PGRs per staff
fte
Progression
NSS
International
Student Pop.
RAE
Achievement
Research
Employability
Income per staff
fte
UG Entry
Standards
EBITDA
(£k)
.
Absolute 10th
2.0
96%
86%
26%
2.5
81%
£109
80%
487
Unknown
4th in Group
1.9
96%
84%
21%
2.5
84%
£93
80%
506
10%
Exeter (Latest)
2.1
97%
86%
23%
2.5
84%
£73
77%
470
8%
Internal
Exeter (Projection)
1.6
97%
-
23%
-
84%
-
-
460
5%
KEY:
Blue Bar
2010/11
2010/11
2011
2010/11
2001
2010 Grads
2010/11
2010 Grads 2010 Entrants
2010/11
Green Bar
2011/12
2011/12
2012
2011/12
2008
2011 Grads
2011/12
2011 Grads 2011 Entrants
2011/12
Yellow Bar
2012/13
2012/13
-
2012/13
-
2012 Grads
2012/13
2012 Grads 2012 Entrants
2012/13
HESA
Derived
•
•
The KPI chart is used to monitor performance against our peers
These are considered at College and discipline level during the planning round
Performance Monitoring in the
Planning Round
KPIs by discipline and college
New Planning &
Budgeting Process
New Planning & Budgeting System
Old System
New System
• Varied approaches
• 1 Year horizon
• Focus on finance
• Formulaic £ allocation
• Targets as aspirations
• Little accountability
• Plans not taken seriously
• Infrastructure planned
separately
• No overarching framework
• One common approach
• 5 year horizon
• Focus on academic strategy
• Strategic £ distribution
• Targets as targets
• Greater accountability
• Plans inform everything
• Infrastructure planning
fully integrated
• Planning Framework
New Planning Process:
Main Components
Vision Setting
• VCEG Residential (September)
• SMG Planning Day (September)
Planning
• PRG Meetings (October – April)
Appraisal
• PRG ‘Wash-Up’ meetings (April – May)
• VCEG Appraisal (May – June)
Approval
• Council Approval (July)
Meetings of Planning Review Group
Planning Review Group (PRG) Agenda
meeting
PRG1- October 2013
(Colleges)
Taking stock (Review of KPIs & Financial outturn)
Reminder of strategy
Agree UG / PGT student intake targets for 2014/15
Staffing resources for 2014/15
PRG2- January 2014
(Colleges, Combined PS,
PS Commercial)
Revised 5 year strategy
5 year student numbers and research awards targets
Early financial implications
Any capital requirements
PRG3- April 2014
(Colleges, Combined PS,
PS Commercial, Guild)
5 year strategy
5 year Business Plan, including cost base
Any revisions to capital plans
What happens at each set of PRG meetings?
Submission preparation meetings
Relevant Services meet with each College to review plans / give
guidance
PRG Pre-meeting
PRG meets to look at submissions, and decide key strategic issues to
focus on at PRG meetings
ALL
PRG meetings
Meetings for each College and combined PS / PS Commercial / Guild
PRG Wash-up meetings
PRG meetings and dialogue with Colleges to agree final targets / outcomes.
Recommendations to VCEG
PRG recommends final targets / outcomes / plans to VCEG for approval
Outcomes report to Council
VCEG reports to Council on outcomes on Planning and Budgeting round to date
PRG3
ONLY
Challenges Ahead:
Size, Shape, Nature and how we sustain
success!
Sustainability Challenge …
In the context of ….
• Increased Competition (UK
& International)
• Increasing Student
Expectations
• Research Concentration
• Austerity & lack of
government funding
World – class
Research
The
Successful
University
Resources
Outstanding
Education &
Student
Experience
Sustainability Challenge
“To be firmly established in the
top 10 UK universities by 2020”
In practice this means being positioned 4th –
9th every year in all the major league tables.
However, we are only JUST in the top 10 and it’s
going to be a major challenge to stay there …
The Sustaining top 10 Challenge …
• REF – high weighting (but already determined)
• NSS – high weighting
• Employability – increasing focus on student’s
return on investment (higher future weighting?)
• Tariff – strong correlation (0.8 – 0.9) with
completion, achievement & employability
Sustaining Top 10 Challenge: NSS
NSS Times Good University Guide
NSS
2010
2011
2012
2013
Not Used
2014
Score
85
2
84
5
83
7
84
12
84
7
86
7
2009 & 2010
2011
2012
2013
Rank in sector
Year of survey
•
•
•
2007 & 2008 2008 & 2009
We need to improve to stand still
If not for dramatic Learning Resources improvement, would have slipped to 20th
Importance of appropriate investment
Sustaining Top 10 Challenge: NSS
Student Satisfaction (Times score)
92
Socre (%age)
88
84
80
Durham
St Andrews
Warwick
Lancaster
Exeter
York
Bath
76
72
68
2007 & 2008
2008 & 2009
2009 & 2010
2011
Year of survey
2012 not published in
Times
2013 estimate
Our competitors for NSS are also chasing us for overall top 10 ranking
Sustaining Top 10 Challenge: Entry Standards
• We are still 40 points behind the leading pack, and
• Tariff fell this year for the second year running
• But not sure about the others at this stage ….
The Size Challenge …
In relation to student growth, Council
have asked VCEG to consider
“the … tipping point at which quality
would be affected” so ….
We’ve looked at the Size Challenge:
How fast have we grown?
22,000
Total Student FTE
20,000
18,000
16,000
This represents growth of
82% which is the highest in
the RG. The second highest
is Queen Mary with 73% and
third, York with 57%.
14,000
12,000
Student FTE
Standard Target
10,000
Stretch Target
8,000
Why have we grown so fast?
– To pay our bills: cost inflation has outstripped growth in the Unit of T Resource for many years
– It has part-funded our investment to grow research ‘power’ & capital
– The demand has been high from good students
However …
• Despite reaching almost 21,000 by 2016/17,
using standard intake targets, some growth
(UEMS, BUS, & possibly Law) is not included
• Infrastructure is already struggling to
accommodate all students and staff
• And Council is concerned about quality, so ….
We’ve looked at Size vs NSS …
Big Civics
NSS vs Student FTEs by University Type
campus
Dispersed
Linear (Big Civics)
Linear (campus)
Linear (Dispersed)
89%
Exeter
87%
85%
NSS
83%
81%
79%
77%
75%
73%
71%
2,000
7,000
12,000
17,000
22,000
27,000
32,000
37,000
Student Headcount
• Only 11 universities with >22,000, score more than 80% in the NSS (Times Methodology)
• No university with > 22,000 scores more than 85% (i.e. among the top 10 or so in UK)
And Tariff …
Average Tariff Score Against Total Intake of Tariff
Eligible Students: 5-Year Average
580
Imperial
Average Tariff Score
530
LSE
480
Oxford
UCL
St Andrews
Bath
430
Cambridge
Warwick
Durham
York
Exeter
King's
SOAS
Sheffield
Birmingham
380
Manchester
Nottingham
Leeds
330
280
230
180
0
1000
2000
3000
4000
5000
6000
Tariff Eligible Intake Population
• None among the top 10 had an average intake of more than 3,500 in 2011/12
• There’s a finite pool of high quality students so the higher the intake, the greater the
pressure on tariff.
• Softening this year has made only marginal difference to tariff, but even before softening
our tariff was behind Durham, Warwick, St Andrew’s and UCL’s in 2011/12
And Total Students vs USA Rankings
1
6
VCEG proposing we cap
total students at 22,000
National Ranking
11
16
21
• Generally
among the top 20, the bigger the intake the lower the tariff
26 among the top 10 had an average intake of more than 3,500 in 2011/12
• None
• There’s
a finite pool of high quality students so the higher the intake, the greater the
31
pressure
on tariff.
36
41
46
0
10,000
20,000
30,000
Number of Students
• No US top 20 has more than 23,000 students
40,000
50,000
The Finance Challenge …
“Funding our growth plans has to
be one of, if not the biggest
challenge that we face.”
Vice Chancellor’s report from the VCEG
Residential Meeting 2013
Finance Challenge
•
•
•
•
•
•
•
•
Cost of investment in REF, NSS & employability
Capex too low in later years (£3m vs £67M)
Long-term maintenance + increased debt servicing
Surpluses too low (0.2% - 3.1%)
Pay inflation vs flat fees for home/EU UGs
Dramatically increasing pension costs
Examine baseline budgets to reduce costs
= EBITDA increase to 12.5%, or £12M by 2017/18
The Shape Challenge …
Surplus/Deficit as % of Total Income (TRAC 2011/12)
75%
65%
55%
45%
% Surplus/Deficit
• International
students generate a
large surplus.
• Research is costly
• Could be much
improved if REF
produces QR
premium
• Publically funded
teaching likely to
make a bigger surplus
as fees roll through
• But overall pattern
will not change …
35%
25%
15%
5%
-5%
-15%
-25%
-35%
Non-Publically Funded
Teaching
Publically Funded
Teaching
Non-Publically Funded
Research
Publically Funded
Research
Percentage Growth 2001/02 2012/13
300%
277%
200%
150%
86%
68%
How have these activities
grown over last 10 years?
• Sector-leading growth in
research income
• Significant growth in
student numbers, but …
• STEM/M growing faster
than HaSS
• Current balance:
250%
100%
Shape Challenge:
73%
– 65% HaSS
– 35% STEM/M
50%
0%
STEM/M
Student FTEs
HaSS Student
FTEs
Total Student
FTEs
Research
Income
Shape Challenge:
Percentage Growth 2011/12 2016/17
45%
41%
40%
35%
33%
30%
25%
20%
What will happen in the
next 5 years?
• Research income growing
faster than students
• STEM/M still growing faster
than HaSS and …
• Planned balance will be:
– 60% HaSS
– 40% STEM/M
17%
15%
10%
10%
We have been growing, and are
continuing to grow, high cost
activities in research and STEM/M
5%
0%
STEM/M Student
FTEs
HaSS Student
FTEs
Total Student
FTEs
Research Income
Shape Challenge:
But growth in STEM/M & Research has been vital for …
Research Income 2011/12
• Entry into Russell Group
• Enabling us to grow
Research ‘power’
• Strengthening our REF
submission
• Preparing us for research
concentration
• Beating the competition …
However, it does puts pressure on EBITDA,
especially when combined with picture for
international students ….
Rank
Institution
1 The University of Oxford
Imperial College of Science, Technology
2 and Medicine
3 University College London
4 The University of Cambridge
5 The University of Edinburgh
6 The University of Manchester
7 King's College London
8 The University of Glasgow
9 The University of Leeds
10 The University of Bristol
11 The University of Liverpool
12 The University of Sheffield
13 The University of Birmingham
14 The University of Nottingham
15 The University of Southampton
16 Cardiff University
17 The University of Newcastle-upon-Tyne
18 The University of Warwick
19 Queen Mary and Westfield College
20 The Queen's University of Belfast
TOTAL
Research
£M
404,416
313,886
300,734
293,441
193,119
188,019
154,745
124,351
120,433
117,944
115,600
108,785
103,266
100,120
94,685
87,654
86,053
85,450
80,654
61,096
21 The University of Exeter
49,922
22 University of Durham
23 The University of York
24 LSE
47,761
46,611
23,525
Shape Challenge:
Growth in Exeter’s international student FTEs: 2001 - 2017
Total International student Population
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1,500
1,000
500
0
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
HESA
Plan
Year
Exeter’s International Students (including INTO) as
Percentage of Total Student Population
30%
International Students as % of total student FTE
25%
• Going down as a %
• PRG want to halt that trend
• Market data shows this is achievable
20%
15%
10%
5%
0%
2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
HESA
Plan
Year
Shape Challenge:
Can we combine this with modest growth in home/EU
students in high margin areas?
• Current growth takes
us to a little over
21,000
• Room for small
amount of growth
within the cap of
22,000
• Look to high margin
areas, such as …
•
•
•
•
•
•
BUS School (Penryn?)
Law?
Mathematics?
Computer Science?
Modern Languages?
English?
But any growth would need to enhance our quality metrics
and would depend on market demand ….
ENGLISH: No. of Entrants
0
The University of Exeter
The University of Leeds
The University of Oxford
The University of Nottingham
The University of Sheffield
The University of Birmingham
The University of York
The University of Kent
The University of Cambridge
Queen Mary and Westfield College
The University of Liverpool
The University of Newcastle-upon-Tyne
Cardiff University
The University of Lancaster
The University of Sussex
The University of Warwick
The University of Manchester
The Queen's University of Belfast
The University of Leicester
The University of East Anglia
The University of Southampton
King's College London
Royal Holloway and Bedford New College
The University of Reading
Loughborough University
University of Durham
The University of Edinburgh
Goldsmiths College
The University of Bristol
The University of Glasgow
University College London
The University of Surrey
The University of Northumbria at Newcastle
The University of Bradford
London South Bank University
University of Derby
50
100
150
200
250
300
350
ABB or higher
Not ABB or higher
We will consider these data for all disciplines in the planning round …
Priorities &
Key Performance Targets
Priorities & KPTs
Priorities
Key Performance Targets
• Enhance tariff and NSS – major
priorities over the next planning
period.
• Boost employability – major
theme for this year’s planning
round – may need investment.
• DVCs & COO to review all baseline
budgets.
• Modest additional expansion of
high margin home/EU provision,
bearing in mind the need to
protect our quality metrics.
• Reduce the number of universityfunded PGRs, where appropriate .
• Cap growth at 22,000 students in
total in the foreseeable future.
• Home/EU undergraduate intake
not to exceed 4,600.
• EBITDA of 12.5% of total income
by 2017/18.
• International student population
to remain at 18% (excluding INTO).
• All non-regulated fees remain in
the top decile.