University imposing massive job cuts and School closures has £0.5bn in unrestricted reserves

Martin Shipton

Newly published accounts for Cardiff University – which has announced massive job cuts and School closures – reveal that its overall surplus increased by nearly sixfold in a year and that its unrestricted cash reserves are as high as £500m.

The accounts, made up to the end of July 2024, have led to renewed allegations that the University Executive Board (UEB) has embarked on a cuts programme that is unnecessary and has brought Wales’ biggest university into disrepute.

A senior Cardiff University academic, who wishes to remain anonymous, said: “The accounts show the university’s overall surplus has gone up to £177m from £28.9m last year. The university has over £500m in unrestricted reserves.

Cuts

“These figures prove, contrary to the Vice-Chancellor’s spin yesterday, that the university can manage its way through the current challenges without the devastating cuts announced yesterday. The cuts announced are unnecessary and adjustments can be managed over a longer time frame.

“The threats of redundancy should be withdrawn as there is no basis for them.

“The University Executive Board has sacrificed the goodwill of academic staff for the future with their demoralising announcements yesterday, and seriously damaged the reputation of Cardiff University in the process.”

On January 28, Cardiff University announced plans to slash its workforce by around 400 full time equivalent posts and to close five Schools: Ancient History, Modern Languages and Translation Programmes; Music; Nursing; and Religion and Theology.

Other Schools will be merged.

‘Precarious’

Justifying the cuts, Vice -Chancellor Professor Wendy Larner said: “The precarious financial position of many universities, particularly in the context of declining international student applications and increasing cost pressures, and the need to adapt to survive are well documented.

“We know here at Cardiff University that it is no longer an option for us to continue as we are. Our new strategy, co-created with our community, lays out an ambitious future for our University where it is collaborative, innovative, and delivering value for Cardiff, Wales and the wider world.

“Securing that future, in the context of tightening finances, means we need to take difficult decisions to realise our ambitions to enhance our education and research, and improve the staff and student experience.

“We have done everything that we can to avoid reaching this position, but ultimately we know that annual rounds of cuts demoralise our staff, affect our students, and limit our ability to retain and grow new partnerships with our community here in the UK and elsewhere. We need to act now to ensure that we are able to deliver on the aspirations of our new strategy and have a viable university for the future.”

‘Unavoidable’

Earlier the university had spoken of the “existential crisis” facing it, suggesting that cuts were unavoidable.

The University and College Union, which has balloted for industrial action, also argues that the cuts are unnecessary, criticising in particular the plan to move from an operating deficit of £31m to an operating surplus of £23m in a single year.

Another senior academic at the university told Nation.Cymru: “It is insane for the university to embark on a cuts programme of this kind. Instead it should be taking advantage of the reserves in a judicious and prudent way to introduce change over a longer time frame, providing breathing space to find new funding streams.

“As it is, the UEB has with one announcement trashed the university’s reputation that has been built up over many years.

“There is a huge and hypocritical contrast between the opaque and secretive way the UEB has behaved while developing this appalling cuts programme with the transparency of the Big Conversation about the university’s future it has been having with staff and other stakeholders.”

‘Structural deficit’

A Cardiff University spokesperson said: “It is extremely disappointing that details of our finances have been shared ahead of their official publication later this week.

“Whilst we won’t comment on the specific detail until they are published, accounting surpluses do not reflect the underlying financial position of running the university. Accounting surpluses are not the same as cash that can be spent to avoid the need to make change in the university.

“The university faces a structural deficit. This means the revenues we generate from teaching and research do not cover the costs of undertaking these activities.

“We have already said publicly that the annual report and accounts will show that we generated a deficit in this respect of £31.2m for the year ending July 31 2024. In short, the costs of teaching and research activities were £31.2m more than the income we generated. This is not sustainable.

“Like all universities whilst the university does have reserves, this is not the same as money that the university can freely spend.”