A well-managed estate can help a university to improve student and staff satisfaction, generate an income and reduce overheads. In the first of our blogposts focusing on estate management, Dr Ghazwa Alwani-Starr explains how universities are maximising the value from their portfolios.
Earlier this year, I was invited to lead a workstream on delivering value from the higher education estate, as part of Sir Ian Diamond’s work with UUK on efficiency, effectiveness and value for money in the higher education sector. I set up a collaborative project between Association of University Directors of Estates (AUDE), British Universities Finance Directors Group (BUFDG), the Higher Education Funding Council for England (HEFCE) and Universities UK,with Sian Kilner of Kilner Planning and Patrice Muller from London Economics also contributing to this work. In the coming few weeks we will be sharing with you some of the discussions, observations and outputs from this work. So this first post is about context:
The size and success of the UK university sector is not something that everyone readily grasps. Our turnover of £27.3bn compared to that of Vodafone at £38.3bn and energy giant SSE at £30.6bn should give a good indication. We employ 370,000 people directly and create over 750,000 jobs in the wider economy. We serve the needs of 2.5 million students and we are home to the second highest concentration of universities that are ranked in the top 100 globally; we generate more than £15bn of export value.
What we do makes a real difference to people’s lives and creates gains to the exchequer. The most recent research suggests that the lifetime graduate premium of tertiary education remains very strong at £168,000 for men and £252,000 for women. Associated gains to the exchequer, net of public expenditure on higher education, have been calculated to be around £260,000 for men and £315,000 for women.
A report to BIS by Sarah Jackson (former director of the N8 Research Partnership) in 2013 argued that universities were “moving towards a ten-year track record of delivering efficiencies”. As work by UUK has shown, the sector has consistently met targets set by successive spending reviews delivering £1.38bn of efficiencies; exceeding a set total target of £1.23bn.
Emerging, but still ambiguous, strategies for higher education (HE) size and funding all have only one common driver, that of significantly reduced funding, both revenue and capital, and a desire for increased competition.
This means universities have to focus more than ever on ensuring every penny is being spent on enhancing the academic reputation of institutions both through teaching and research and on responding to student needs.
For the HE estate, which at 280 million square feet in total is 2.5 times the entire government estate (excluding the MoD) and just shy of the NHS estate, this has meant a drive to get more value from more services with fewer resources. Since 2009, universities have invested in the region of £2.5bn annually in their estate. In that time, the proportion of the investment coming from internal sources has increased seven-fold as capital grants and capital income from the sale of assets have diminished.
The quality of the university estate is not only vital to the operational effectiveness of the university; it can also give a clear competitive advantage. Studies have shown that more than a third of students say they have rejected an institution based on the facilities they encountered, and nearly three quarters say that the quality of the estate influenced their decision on where to study. And in a world where the needs of students and the academic community are evolving at an ever faster rate, it is vital that the HE estate can support the diverse needs of all our communities, offering high quality space which is both attractive to students and staff and suitable for hosting business and research collaborations.
Through our work we have developed an evidence base on changes to the university estate, tracking the shifts and improvements over the past decade. While our working group was initially tasked by Professor Sir Ian Diamond with looking at space utilisation, we quickly found that a broader and more holistic account of how the university estate and the professional community can support more efficient and effective working to be a common theme in our discussions.
Space utilisation is important; however, we must also take into account the ways in which the estate is used for teaching, research and income generation; the investment that has been made, the quality and appropriateness of the built environment and of course energy and how we manage it.
Over the coming weeks, we will publish a series of blogs that will show how space use has changed in the last decade; how the value being derived from the estate has increased, and how this interacts with costs; and give examples of how investment in the infrastructure has led to a significant improvement in the quality and suitability of the built environment.
The management of this infrastructure is a complex business and the success of the sector relies upon the skills and expertise of many, including estates and facilities professionals. Estates directors now find that the traditional skills set of excellent technical knowledge and timely and efficient project management are no longer sufficient. We are all now having to develop our skills of negotiating and influencing, motivating and inspiring as well as competing and selling. We have also needed to develop our understanding of the whole HE system economics so that we can appreciate the impact of the estate on the business.
Likewise, bringing about change in the sector is about more than just new bricks and mortar: how we use the estate is the product of a wide range of factors including academic practice, pedagogy, student choice, research funding, and student and staff expectations.
Dr Ghazwa Alwani-Starr is director of estates and campus services at the University of Roehampton, and deputy chair of the Association of University Directors of Estates.
For other posts in the estates workstream, please see our HE estates index.