Marketing inflation

Increasing marketing spend in universities – real or hype?

Inside Higher Ed features a report on a recent conference on marketing in higher education which featured some bold predictions about the money UK universities will be spending in the brave new market place.

Discussion focused on whether we would see levels of spending of up to 20% of revenue on marketing as has happened in some US universities. The predictions all seemed to suggest that we would see major growth in UK universities’ marketing spend as institutions compete more to attract students.

The article notes what has happened in some US institutions and contains some rather extravagant propositions about what will happen in the UK:

A report released in July by the U.S. Senate Committee on Health, Education, Labor and Pensions chaired by Senator Tom Harkin of Iowa, found that for-profits in the country spent an average of 22.7 percent of their revenue on marketing and recruitment, 5 percentage points more than their investment in teaching.

Tim McIntyre-Bhatty, deputy vice-chancellor of Bournemouth University, said that UK universities would rapidly move toward an equivalent figure. “The question is how quickly and the answer is 12 months,” he said.

Robb said that tuition fees had escalated and the same thing would happen to marketing budgets. “There’s no doubt that universities will spend more on marketing in the next 5 to 10 years than they have done to date,” he added.

It is reasonable to speculate that universities will spend more on marketing than they have in the past. However, the idea of spending even as much as 4-5% on marketing as one director of marketing quoted in the piece suggests strikes me as hugely excessive. And as for allocating in excess of 20%, this is just absurd. In reality I would guess that the real level of spend will be in the range of 1-2%. So a load of rather excessive hype I think.

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HE in Ireland: “Axe hangs over 750 posts”

Whilst UK institutions are facing significant financial challenges, the situation in Ireland seems distinctly difficult according to the Irish Independent.

The paper states that up to 750 jobs are to be cut by December and that academics, research staff and administrative, technical and other support posts will be equally affected by the instructions to reduce numbers by 3% by December:

There will be no compulsory redundancies and the cuts will be achieved through non-filling of posts and the non-renewal of fixed-term contracts. The move is part of the Government’s effort to slash the size and cost of the public sector. The cutbacks mean that colleges also have to get special approval to fill certain jobs. Where a college seeks an exemption to fill a vacancy, it must get permission from the Higher Education Authority (HEA), the Department of Education and the Department of Finance.

It must complete a form explaining the basis for filling the post and, in the case of lecturers, confirm all existing lecturing capacity is being used. In the case of lecturers, colleges have been advised that they won’t get approval in the absence of confirmation that all available lecturing capacity is already being used. The HEA has put in place an Employment Control Framework setting out how the colleges are to achieve the cuts.

In the case of academics, the HEA has notified each individual college of the actual number of academic/teaching posts that must go. Colleges have some discretion about what academic posts should be suppressed, but must deliver on the December 2009 bottom line figure dictated by the HEA. In the case of administrative, technical and other support jobs, vacancies may not be filled, contracts may not be renewed and no new posts may be created.

This really is pretty dramatic stuff. Whilst we might think things are pretty bad in the UK, we are a long way from this kind of intervention.

Impact of the Budget on higher education

Savings needed? No need to think about it, just cut the administration.

John Denham has written to HEFCE on the impact of the Budget.

This is a significant letter from the Secretary of State but it doesn’t quite say what the Guardian is reporting. The paper’s headline states: “Universities told to cut admin costs, not teaching or research”. This isn’t precisely the message but the sentiments are there:

Ministers have calmed fears that universities will be asked to axe thousands of academic jobs and make savings on teaching and research. Denham460x276
Letters from the universities secretary, John Denham, to the Higher Education Funding Council for England (Hefce) and the Learning and Skills Council (LSC) confirm that savings should be made in administration costs, rather than the core university business of teaching and research.

“I am confident that we can find efficiency savings whilst protecting the quality of teaching and research,” he wrote.

Savings should come from programmes that “do not directly contribute to the frontline delivery of teaching and research”, he added.

The important point here is that, having determined that universities have to make significant savings it really isn’t the job of the Secretary of State to tell institutions how to prioritise their spending. Of course institutions will not seek to undermine quality of teaching and research. But the idea that there is this huge unnecessary raft of administration from which savings can easily be made, that this will have no effect on quality and also that that somehow administrators are dispensable is simplistic and thoroughly misguided.

So, universities will find their own ways to make the savings required and will, it is to be hoped, aim to do so in a measured and sensible way. But this kind of advice is not hugely helpful.