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