The prudent case for civic engagement

Universities are facing a funding squeeze unprecedented in recent times.

The decline of the value of the unit of resource from home students, a turbulent recruitment market, increasing bills, growing service expectations, inflation, cost of living, and a myriad other factors are pushing universities into uncomfortable saving territory.

Path dependencies

One of the major financial challenges for universities is making immediate savings while not shutting off opportunities for further income. In social sciences this type of behaviour is known as path dependency, where a decision made today locks in future decisions. For example, as I’ve chosen to have a child I’ve locked myself out of restful sleep (I love having a baby it’s just sleep is on my mind right now).

Universities have generally been averse to locking in path dependencies as the higher education financial model generally does not reward them.

A plurality of universities have a comprehensive curriculum not because they specialise in everything but because it’s an effective hedge against risk. It allows universities to capture a broad number of students, respond more easily to changing student demands, and act more flexibly against sometimes unpredictable student numbers. Universities tend to research broadly as it guards against an over-specialisation in a research funding system which reflects innumerable research disciplines.

In normal times it is reasonable to believe that pursuing few objectives deeply is strategically sound but financially risky as the plane of research funding, student numbers, or government priorities, could dramatically veer from its flight path. However, universities are not in normal times.

Around two thirds of total university income is spent on staff wages. The second largest expense is what HESA calls “other operating expenses” which includes non-contracted staff, all non-staff costs except depreciation, some equipment and maintenance. In short, a significant majority of university expenditure is tied up in the activity which makes a university a university. Its people and their work.

Obstacles

Formulating a response to the financial squeeze has therefore been extremely challenging. This has involved measures like pausing staff recruitment, pausing capital expenditure, and the most difficult to be part of, redundancy schemes and programme closures.

One area that is clearly at risk is the activity that has a focus which isn’t exclusively within the institution. The kinds of civic engagement activity that require the expenditure of resources that a university may never directly benefit from but nonetheless are good for the places they are based.

The preservation of this activity is not about coalescing around a moral argument – few would argue that civic engagement is not a good thing – but as a risk avoidance measure to avoid a path dependency which prevents universities from responding to new opportunities.

As we have seen with unexpected announcements like the Regional Innovation Fund, proposals to use KEF metrics in spending decisions, and OfS’ focus on a schools agenda, there is a direction toward more civic-ness. The challenge is to not lock in path dependencies away from this work, use cash wisely, and have enough capacity to respond to new opportunities. It is an extremely difficult balancing act.

Civic people

The largest expenditure of any kind of civic activity is the people carrying it out. Across universities there are staff who are exclusively responsible for civic activity, staff who pursue academic and administrative interests that bump into civicness, and staff who by proxy deliver massive civic benefits (think of the staff that maintain the gym used by local sports teams). One thing that may be helpful to consider is whether existing internal data can effectively capture the nature and value of civic activity. A risk is that in reconfiguring roles and responsibilities some of this work gets unintentionally lost.

It is also the case that cost-saving can lead to new practices. Universities work with civic partners that have faced more than a decade of austerity. The LGA estimates that local government has cumulatively saved £1.34bn through sharing services. These are sometimes wrought of the kind of decisions universities would wish to avoid, like merging teams through reducing staff numbers, but there are also efficiencies which could deliver savings and wider civic impacts. In local authorities this has included streamlining procurement functions to allow greater buying at scale with local suppliers; sharing sports and recreation services to bring income from greater populations; and sharing capacity on advice-type services where they impact citizens across a broad population.

The benefit of strong civic engagement is that it opens up a university to the continual sharing of ideas which in turn should help innovate practice. The likes of the University of Gloucestershire have taken this a step further through their capital plans to turn a Debenhams into teaching space with room for the community. It is possible to imagine more shared capital projects between universities and their civic partners. For example, back in 2014 the University of Liverpool opened its Materials Innovation Factory through a combination of funding from Unilever, the UK Partnership Investment Fund, as well as funding and support from the university.

The government’s role

The government also has a role in shaping whatever civic agenda emerges out of the ongoing university financial crisis. Of course, local people experiencing their own cost of living crisis need their universities more than ever, on the big pressing research questions of our time down to the more tangible free spaces, support, and advice. This may look like an expansion of programmes like RIF, there should be capital incentives through OfS where providers secure a civic partner, and the discussions on the future of REF, KEF, HEIF, and spin-outs should coherently and solidly enmesh civic good within their putative future funding frameworks.

The challenge universities face in making in any of their savings decisions is the urgency of the present with the uncertainty of the future. Saving today can build unpredictable risks for tomorrow. As the pressure on finances grows it is worth pausing to consider how civic activity manifests across our institutions, the ways in which it might be even more impactful and efficient, while placing an emphasis on the government to act on an agenda they have said is important.