Oxford Brookes UCU – Financial Analysis Summary April 2024

Oxford Brookes UCU – Financial Analysis Summary


As discussed in recent Branch meetings, we have compiled a summary of the financial analysis conducted by the UCU Negotiating Committee during the recent formal consultation process on compulsory redundancies to share with our Branch members.

To this end, we have shared the following headlines at recent Branch meetings under 6 key points which are articulated in more detail below.

Key findings:

  • Oxford Brookes is heavily indebted and is in the midst of an ambitious capital development programme that drives the redundancy proposals coming from management – and the current voluntary severance scheme.

Oxford Brookes’ capital development programme and financial strategy has left the University in a precarious position in terms of debt-to-income ratio.  In the most recent publicly available data on the University’s financial performance returned to HESA in 2021/22, the University had the highest ratio of ‘External borrowing as a % of total income’ in the UK at a rate of 92.3% (https://www.hesa.ac.uk/data-and-analysis/finances/kfi).

This in effect means that the University has exhausted its capacity in terms of borrowing to fund its capital development programme, and in turn, left itself in a precarious position as there is no capacity to restructure its borrowing commitments and covenants at a time where interest rates have increased significantly. It has therefore turned its attention to making cost-savings to shore up the University’s finances in the short and medium term.

  • A recent decision to bring forward work on the Clive Booth Student Village leads to a massive drain on cash this year, which required a new overdraft / revolving credit facility being put in place to cover cash “troughs” in the current and future financial years.

Brookes was offered a deal to bring forward the commencement of construction work at Clive Booth Student Village. In return, they would get additional work included in the originally planned price, with the Board of Governors approving a change to the project that would deliver an additional building for the same approved budget, with the additional building being left as a shell construction.  

However, this decision required a significant outlay of cash in the 2023/24 financial year in return for this change to the project, resulting in increased financial pressures as the University’s cash balances were deployed at an earlier point in light of this.

  • Management plans do not explicitly recognise the trouble associated with such low cash positions, but the logic of their plans is clear: find savings to rebuild cash more quickly and to allow further capital work to go ahead.

It has become abundantly clear to us that the urgency of the cost-saving measures sought by the end of the 2023/24 financial year was clearly linked to concerns with the University’s cash-flow situation and the debt-to-income ratio.  

When pressed upon this within our negotiation meetings throughout the consultation process, the University management initially refused to move their position regarding the capital investment plan – with a central argument that they would not consider reducing capital investment whereby these investments would be ‘income-generating’. We have continued to express our opposition to ongoing capital investment when jobs are at risk.

  • The “external forces” that management evoke are seriously exacerbated by decisions they themselves have taken.

Given the University management’s refusal to acknowledge the impact of internal strategic and investment decisions, it has become apparent that the VCG and Board of Governors has sought to externalise the problems the University faces through its constant reference to increased inflation, pension costs, real-terms decreases in the value of UK/Home tuition fees, and a downturn in international recruitment.

However, whilst all of these external factors are affecting Brookes as it has the entire higher education sector, all of these external factors were entirely predictable. The proposed job losses at Brookes are due to the fact that the University’s level of indebtedness and requirements to generate large surpluses on a regular basis leave the University with no capacity to deal with any short-term financial headwinds.

  • Brookes now has: (i) debts three times higher than the sector average and (ii) cash lower than all but a few institutions. If we were looking at a benign period in English HE funding, it would be concerning. As it is, it looks reckless.

As outlined above, the level of indebtedness of the University is one of the central drivers of the urgency of cost-saving measures. The University’s lending covenants require urgent reductions in the level of debt-to-income ratios in the 2024/25 financial year due to the strategic mismanagement of the University’s finances, with the challenging financial circumstances in the HE sector and increased interest rates leaving no room for further renegotiation of its lending commitments in any way which would not be highly detrimental.

  • Staff will bear the brunt and this is unlikely to be the only round of cuts in the next year or two.

The UCU Negotiating Team provided an extensive list of non-pay saving suggestions to the University during the consultation process – and has continued to do so alongside Unison colleagues during the current discussions on the more recent cost-saving measures which included the recent voluntary severance scheme.

However, it appears that the University’s financial peril, and the lack of scope left for significant non-pay cost-saving measures given that most of these have been exhausted, means that the recent move towards reductions of 5% in staffing costs is a direct consequence of the University’s financial mismanagement. Notwithstanding a shift in the University’s position on the planned capital investment, the urgency of the timescale for the savings required in the 2024/25 financial year means the blame for this lies at VCG’s door.

To find out more about our campaigns and how to join and support UCU, see: 


X/Twitter: BrookesUCU

Instagram: oxford_brookes_ucu

One thought on “Oxford Brookes UCU – Financial Analysis Summary April 2024”

Comments are closed.