Watts Sector

Higher fees drive need for better buildings

Tuition fees continue to make the headlines, as more universities announce their intention to charge the maximum £9,000 a year from 2012. The hike in fees is in direct response to Government cuts in university funding but, despite their undoubted ability to do the maths, students, already furious at being shouldered with bigger loans, will expect more for their money.

From accommodation through to libraries and laboratories; according to the Times Higher Education survey; students are well aware of the environment within which they live and learn. Last year’s well-publicised exposé of Higher Education Funding Council for England’s building condition database published in The Guardian, revealed one in ten universities with buildings that were “at serious risk of major failure”.  Faced with a new approach whereby funding follows the student, if universities are to continue to attract the best undergraduates in the right numbers, estates departments will find themselves under increasing pressure. Not only must they maintain and manage existing portfolios but they must also identify innovative ways to fund improvements to the HE building stock to create and retain an attractive and appealing learning environment.

Reporting on the National Student Survey, the BBC found that 82% of students in their final year at UK universities in 2010 were satisfied with the quality of their course. However, universities warned that tighter budgets will make it harder for them to maintain this level of satisfaction in the future as they have to find ways to operate more cheaply.

Research published by The Policy Exchange in December proposes that in order to reduce the impact of funding cuts, universities should follow the government’s advice to local authorities and look at sharing and/or outsourcing services. Many universities are already finding ways to bring external providers into the equation to invest in much-needed buildings, particularly in the provision of accommodation via joint arrangements with private providers. However, The Policy Exchange report goes further, suggesting that considerable savings could be made by sharing services such as finance, human resources or student records. Across the entire Higher Education sector, that could mean total savings of as much as £2.7 billion, the report claims.

However, as local authorities are already finding, this is far from straightforward, with legal and regulatory issues to unravel, even where there is a strong will to align services within a large organisation. Estates functions such as facilities management and building maintenance are some of the easiest to outsource or streamline and may provide some quick – and cost efficient - wins.  There is no doubt that by charging higher fees, universities will find themselves having to provide better facilities for students and this means better buildings. Even without going down the ‘place-based budgets’ route being promoted in the local government sector estates departments have a key role to play. By carefully managing the estates strategy, gaining detailed knowledge of building condition and value and getting the best deal from lease arrangements, departments can work their portfolios harder and smarter. By so doing universities will ensure that the funding they do have is deployed in the most cost-effective way to attract the all important end user, the students.

For further information contact Daniel Webb, Director in Watts’ London office on 020 7280 8000.

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