10 July 2019 
Matt Sisson, Projects and Membership Manager
Some readers may have watched Philip Augar’s comments during the proceedings of the Science and Technology Committee held on Tuesday 25th June. On questioning by Lord Griffiths about how the Review Committee had reached the figure of £7,500 as a base-line fee, Dr. Augar replied; “[I]t emerged that the basic cost of provision as reported by the universities [who participated in the KPMG study] of the lower band of degrees was £8,800. Analysis of the data revealed that includes a 10% margin called the MSI which is effectively a discretionary provision against future expenditure. We noted that universities already spend a considerable amount [to keep up to date] and in our calculations we thought that simply adjusting for this would take the base cost down to £8,000 or just below.”
In the Times Higher this week, Lancaster V-C Professor Mark E. Smith, BUFDG Chair Sarah Randall-Paley, and a BUFDG ex-Chair Andrew McConnell have expressed concern about the Committee’s understanding of university finance. The joint authors clarify that the Margin for Sustainability and Investment is “a proxy for the additional revenue that needs to be generated for the provider to be able to invest in future requirements, such as capital. It is not merely a nice to have: its removal would have profound implications for the sector’s long-term sustainability.”
We can only guess how Dr Augar chose the words “discretionary” and “simply”, but they will ring in the ears of anyone trying to make a university budget work in the face of increasing costs and uncertainty.
