The period covered by the data in the report, 1 August 2020 to 31 July 2021, was strongly impacted by the pandemic. At the point at which the dataset starts, the country was in a summer lull in Covid cases after initial lockdown rules were relaxed. This was followed by the second lockdown of October 2020 and the rush to get students home safely ahead of Christmas, followed by the third national lockdown started in January 2021. This period saw a huge upswing in home students on the back of teacher-assessed grades. It was also the time of furlough, with 60 per cent of universities using this option for estates and facilities team staffing in summer 2021. However, there is also discussion in the report of the current challenges facing university estates, such as rising energy costs. Much of the data analysis in the report is split into four categories: large teaching, small teaching, large research and research-intensive institutions. The number of institutions providing data increased from 131 to 133 this year.
- The overall income for the sector (for institutions that have made data returns) has increased by 7 per cent from £34.4bn to £37bn, fuelled by an increase in research income of 4.8 per cent to 8.3bn, an increase in teaching income of 10.2 per cent to £23.3bn, and a small reduction in other income of 1.8 per cent down to £5.4bn (p13)
- Large research institutions have seen academic income (teaching and research income) increase by 6.1 per cent while research intensive institutions have seen a rise of 8.9 per cent. For large teaching institutions, income has risen by 12.3 per cent while small teaching institutions have seen a rise of 12.7 per cent (p13)
- The report includes a comparison of income against the Consumer Price Index (CPI). This has been calculated against a base year of 2010/11 and shows that growth continued to outpace inflation quite significantly (p13)
- Between 2015 and 2019 the rate of growth in the total number of taught undergraduate and postgraduate students increased by 2 per cent to 4 per cent year on year. In 2020 the number increased by 7 per cent, taking the total number of taught students from 1.62m to 1.73m, a rise of 110,000 students (p13)
- Large teaching institutions saw student numbers increase by 7.4 per cent, while small teaching institutions saw a rise of 8.3 per cent (p13)
- Total capital expenditure on buildings in 2020/21 was £2.61bn, down slightly from £2.7bn in 2019/20, which was a significant decrease from £3.36bn in 2018/19. The pandemic slowed capital projects (and hence deferred expenditure) and also led to the revisiting and shelving of a number of projects. Given the extraordinary circumstances, this level of spend – similar to that in 2015/16 – might have been expected to be much lower, the report says (p10, p35)
- On comparatively empty campuses, there was a 5 per cent increase in repair costs as estates and facilities teams took the opportunity to arrange works that would have been more disruptive at any other time. Some non-statutory compliance activity stopped as budget uncertainty hit, but the data also shows a significant spike in maintenance spend towards the end of the reporting year as the recovery began (p10)
- Campus-generated income (including from food concessions and other retail), and income from accommodation are both down, which can be tracked back to the pandemic disruption. Income from catering fell from a pre-pandemic level of around £400m (2018/19) to less than £100m in 2020/21. Capital expenditure on university residential accommodation reduced significantly in both 2019/20 and 2020/21 (p10, p73)
- The total Gross Internal Area (GIA) of the institutions included in the report has continued to increase, but at a lower rate than in previous years. In 2020/21, the total GIA increased by 300,000m2 (1.4 per cent) to 21,448,000m2 (p27)
- Total property costs (TPC) as a percentage of income saw quite significant reductions; primarily due to the substantial increase in academic income for the year, coupled with the relatively level property cost (p41)
Implications for governance
Much of the data in the AUDE report was generated against the backdrop of the pandemic and various national lockdowns. From the drop off in campus-generated income to the rise in student numbers, the figures have been impacted by Covid. Despite this, one of the surprises in the data is that capital programmes managed to be maintained to a higher level than might have been expected across the sector.
Governors will know from their own institutions that one of the main conversations arising from the pandemic is the long term ramifications of the increase in hybrid working.
Estate teams have been focused on space utilisation and the unsustainability – in cost and carbon terms – of operating buildings on campuses where far fewer staff, and potentially students, are on site daily.
The report poses questions such as whether universities can grow via downsizing; and will the changing nature of student expectation about how and where they learn lead to significantly reconfigured campuses, with fewer lecture halls and more social and informal learning spaces? Can the shift towards working from home (WFH) mean less office space or do WFH patterns make space rationalisation a tricky prospect? And will the rise in household energy costs in winter 2022/23 drive more staff and students to opt to come onto campus? Many of these questions remain in the air, but they are increasingly arising on governing boards and committees.
Energy efficiency is also a top agenda item. The entire national university estate consumes 7,000MWh of energy, more than half of which is from gas or electricity produced from gas input.
Rising energy prices means universities operating costs are going up by millions of pounds. Universities have been buying large quantities of gas at locked-in low prices, but the over-reliance on gas is something higher education wants to move rapidly away from, both on cost and carbon emission grounds.
Payback on onsite renewables technologies has never been better and case studies in the AUDE report from a number of universities who are exploring greener alternatives make interesting reading.
Encouraging energy savings around campus has also take on a new urgency. A number of universities are reducing the temperature setpoint for halls of residence and offices from 21 degrees to 20 or 19 degrees. A similar thought process is leading some institutions to decide to heat the campus from the end of October instead of the start, while others are looking at patterns of occupancy and the tendency of offices to empty by Friday and switching off the heating in admin buildings from Thursday night.
According to discussions among AUDE directors of estates and facilities, who came together in September 2022 to discuss the range of options and actions, there is less promotion of the 24/7 campus idea “which arguably isn’t good for student wellbeing anyway and why heat libraries through the night when use is minimal?”.
Proactive communication with staff and students on the reasons behind these changes is vital, the report suggests. One university has included heating posters in every bedroom, others have launched “Switch off” and raising awareness of emissions campaigns to explain the issues, encouraging behaviour change and gaining support from the whole university community.
The challenge for institutions is finding ways to reduce energy use and costs while maintaining the campus as a successful, welcoming, functioning place.
Governors will also be aware of the challenges posed by the increase in student numbers highlighted in the AUDE report. Growth in the number of UK 18 year olds is set to continue and despite Brexit and the pandemic, international student numbers have also risen. This has an impact on academic space and residential accommodation, as well as the student experience, staff: student ratios and staff workloads.
Such uncertainties may make the governing board task of planning ahead more difficult. Energy, for instance, is now on many risk audits in a way it may not have been a decade or so ago when annual price rises were consistent.
“The sheer rate of increase we are experiencing makes it difficult to manage, even with robust strategies in place,” said one estates director.