GUCU Response to Covid-19 Briefing #6
July 03 2020
Please read GUCU’s detailed response to Covid-19 Briefing #6 sent out by SMT to all staff on July 2nd. The response poses urgent questions to the three main points of the briefing:
- Why is Goldsmiths seeking a huge £25 million loan based on the near ‘worst case scenario’ LE2 assumptions that do not reflect recent good news on admissions and the deficit, and which will hand over our autonomy to financial organisations?
- While a move in the right direction, why is Goldsmiths SMT offering only half of the sector standard salary sacrifice? Why are savings not to be ring fenced for casualised staff, and why will management maintain sole authority on the destination of these funds? Why is the tax relief model (GAYE) of charitable giving to be used, when what we need is a deep rethink of economic redistribution, pay ratios and the real value of essential work post-Covid?
- Why is the College paying out for a new consultation platform (Citizen Space) when there are experts in democratic participation methods and data collection on staff? Will the platform work to side-step campus unions who are democratically elected and who can discuss and deliberate on issues collectively with the benefit of full information that the university is obliged to share with them through recognition agreements?
GUCU Response to Covid-19 Briefing #6
July 3rd, 2020
Goldsmiths Senior Management’s most recent ‘Covid-19 Briefing’ to all staff on July 2nd outlined the financial situation of the College as posing ‘an immediate and significant challenge’; the Warden and SMTs decision to give 10% of their salaries to the College for 6 months via a ‘Payroll Giving’ scheme’; and the opening of a consultation platform ‘Citizen Space.’ We would like to respond to each issue in turn.
- Financial Situation of the College
Initial financial forecasts at Goldsmiths when the Covid Crisis first began in March and April were serious and dramatic. Fears of student non-payment of fees for the Summer term along with loss of rent in Halls of Residence led to projected losses within the financial year of anywhere between £17 and £36 million.
By the time the College Recovery Plan was published in May, it was clear that the student deferral and withdrawal rate was less than anticipated, and the government brought forward the payment of tuition fees from the Student Loan Company from Spring Term 2021, averting a liquidity crisis. Prior to the publication of the Recovery Plan, SMT instituted a number of ‘financial control measures’ including the hiring freeze; the non-renewal of Associate Lecturer and Fixed Term Contracts; the cancellation of promotion, pay and progression rounds and the cancellation of dedicated research time. The Recovery Plan, based on the London Economic Study ‘Scenario 2’ (LE2) assumed a 25% reduction in new home/EU students, a 47% reduction in new overseas students and a 25% reduction in continuing students, requiring additional cash savings of upward of £15 million in the year ahead.
With the financial ‘control measures’ in place and with a much lower than expected rate of student interruption, by the time of the mid-June revised financial forecast the College was showing a cash balance of £17.7 million for the end of the financial year: a ‘significant improvement’ on what had been anticipated. Indeed, the deficit had also been reduced from £10.2 million to £7.1 million and there is now no need to draw down funding facilities over the summer.
It is important to note that the budget and forecast documents went to Council the week before the UCAS June Admissions figures were announced, and were still based on the assumptions in the London Economic scenario 2 above. On June 18th UCAS figures for Goldsmiths showed a down turn not of 25% Home/ EU, but of 8%, and indeed an increase in overseas applications and acceptances, with postgraduate acceptances also up. The picture is not even across departments, and of course there will be changes between now and September, but the picture is a much more positive one than that painted in the LE2 assumptions. It is not clear why ongoing forecasts are still based on those close to worst case scenario assumptions.
The Covid Briefing yesterday states that “based on scenario analysis” [nb: no detail given], Goldsmiths will now need to secure additional borrowing in the region of £25 million. This is to be accessed through banks with whom Goldsmiths has some existing loans. By requesting such a large amount of money, Goldsmiths has been asked by the bank to tender for an independent review which will inform the parameters and conditions of the loan. Loans of this huge scale will come with serious conditions; conditions that will force strict financial discipline that will undermine every other criteria by which we currently make decisions and decide priorities.
On Thursday, July 2nd, GUCU exec members questioned SMT about why such a loan is necessary given the improving picture, and why such an enormous sum of £25 million is being sought: a sum that will induce this heavy conditionality and loss of autonomy. We were met with repeated assertions about the instability of student numbers, the ‘vulnerability of certain departments’, about how we were still 8% down on Home/EU, how we still have a deficit, how overseas and postgraduate numbers are volatile, and so on. When pushed, senior management admitted that we have actually done well so far, that it was unlikely that loans would be needed before November/ December. Indeed, they admitted that the ‘ask’ of the loan may be less, for example £15 or £10 or £5 million: that it is in fact a ‘watch and see’ scenario.
There are three key issues here:
- Why are SMT applying for such a huge loan right now based on assumptions of a near worst case scenario that does not reflect a lower than expected deficit and indications of much improved student intake data for 2020-21?
- Why do SMT want to submit Goldsmiths to a bank review and set of conditions that will take away our autonomy right now? If this goes ahead, decisions made by our Academic Board, departments and governance structures will be subordinated entirely to unaccountable bankers and to financial metrics.
- The Covid19 briefing presents none of the positive news and none of the nuance which would give an accurate picture of the College finances in light of the UCAS June Admissions figures.
The report is notable in how it is bracketed by two external forces who we are encouraged to believe will be responsible for all decisions to be made herewith: financial auditors, and the Conservative universities minister Michelle Donelan. GUCU does not deny that these are difficult financial times, but there are always choices and senior management have been making these choices throughout this crisis. They chose not to avail of the government furlough scheme for many, and instead to treat 472 casualised staff like a tap to be turned on and off. We have seen smart and well-organised fightbacks to this strategy, which SMT acknowledges has not done Goldsmiths’ reputation any favours in the media.
The narrative of both emergency and inevitability constructed in the Covid Report seeks to legitimise and avoid accountability for the dismissal of casualised staff, and to presumably prepare the ground for redundancies and cuts to come. Such negative spin is a familiar tactic aimed at ‘softening’ staff into thinking that anything other than disaster is a victory in the coming months. There is no mention of the positive news on admissions figures and deficit reduction; no mention of the £1.5- £1.7 million government loan for research announced last week that the College can draw down; no significant attempt to redistribute wages from the highest earners (see below) and no information on capital expenditure plans in the year ahead.
This monolithic negativity of the Covid Report is both worrying and dangerous: it kills morale; it plays down the achievements of staff and students. SMT instead paints a picture of a hopeless institution, with little of value to offer, on the brink of demise. Who would want to study or work in such an institution?
We must question the need for this loan at this moment in time, and the complete loss of autonomy it will propel us into. We must insist on detailed information on all financial decisions and their assumptions; we must have full transparency on findings of reviews, their cost, their recommendations and any conditions being signed up to by SMT. And we must refuse to internalise the narrative of emergency and work in solidarity with each other.
- Giving to Goldsmiths Scheme
Senior Managers at Goldsmiths have committed to a 10% salary sacrifice over 6 months. While this is a welcome move in right direction, we see 3 issues:
- Goldsmiths’ Senior Managers’ commitment is well below the emerging standard: Kings College London, president Ed Byrne took a 30% pay cut for 6 months with senior staff taking a 10% cut. At Imperial College London, Alice Gast has agreed to a 20% pay cut for 6 months; Peter Mathieson at Edinburgh has also taken a 20% pay cut; Bristol has seen 20% cut for the Vice-chancellor and 10% for other SMT, with half of the resulting savings going to student hardship fund. Manchester University, 20% pay cut for vice-chancellor and SMT; University of Essex, 20% SMT pay cut; University of Nottingham, 20% for the Vice chancellor and 10% for SMT; Cardiff University, 20% of Vice chancellor, 10% for SMT, and at York University, 20% for Vice chancellor and most SMT. If senior staff were to adopt industry standards for senior management salary sacrifice, much more significant savings could be made, offsetting close to half of AL pay, helping to preserve colleagues’ jobs, address workload, improve student experience and boost morale.
- Crucially, any savings are not ring fenced. Why would more staff want to take a voluntary pay cut to alleviate “the general financial position” if this means management having sole authority on the destination of these funds? If staff wages are to be used to support a recovery, then staff need to be fully involved in deciding what the priorities are: eg. protecting the jobs of casualised staff.
- Giving to Goldsmiths is based on ‘GAYE’ (Give as You Earn) which is a tax relief measure. The ‘Payroll Giving’ scheme sends the wrong message to Goldsmiths and the wider community at a time when Goldsmiths cannot afford to keep sending the wrong message. The scheme follows a charity model that is not about addressing pay equity or pay ratios, however symbolically. Covid has taught us who the essential workers are – low paid cleaners, security guards, bus drivers, as well as nurses and teachers. We need a fundamental change in senior pay rates, pay ratios, taxation rates and how we define and value essential work.
The destructive decision by SMT to use colleagues on hourly-paid and fixed-term contracts as balance-sheet buffers means Goldsmiths is perceived as out of touch and reactive rather than changemaking. This perfunctory gesture will have little impact on the finances on those who need it most. Staff should all be pulling together as a college community – caring more, not less, than ever for one another. The systemic change we want to see needs to start here.
- On Citizen Space:
We are very concerned about the announcement that Citizen Space will be introduced as a mechanism for staff and student consultation. While the use of surveys and e-polling can be important for gathering information quickly (as evidenced by the survey created through free online tools by GUCU to gather information about our health and safety), such programmes also risk circumventing opportunities for real dialogue, deliberation and debate. It is also disappointing not to see any take-up of the detailed proposal for Collective Change Making widely circulated by the Professors Forum, and already taking place in and between departments.
E-tools have in the past been used in workplaces to sidestep demands posed by Campus Unions, Academic Board and the Health and Safety Committee, which is by law composed of 50% union representatives who will represent the interests of workers. The H&S committee has for example, recently negotiated an all staff wellbeing survey with Human Resources. Unlike data collected through software programmes, these groups are formed of democratically elected representatives engaged in rigorous, deliberative dialogue and consultation processes with their members and departments. In such fora, different sides of an argument can be heard, assumptions embedded in certain plans can be questioned, and alternative propositions can be collectively formulated.
Crucially, UCU has a Recognition Agreement with management that guarantees through ACAS our access to detailed financial information. This allows us to question information sent out by SMT and deliberate on independent decisions for ourselves. We have, for example, been able to write this response because we have been able to examine the financial papers and data that SMT were required to share and discuss with us. Responding to surveys based on selective information framed by Senior Management, without access to full information and collective debate will be disempowering.
With this in mind, and if Citizen Space indeed exists to create more dialogue as announced, we wonder why the use of this software was not a point for meaningful discussion between SMT and unions or other community representatives prior to its introduction? The unilateral introduction of a new platform without consultation does not exactly bode well for its stated aim of ensuring “that both colleague and student voice contribute to the College planning, decision-making and governance processes” (Covid-19 briefing note 6). We also question the added expense (£7,995 – £29,995) of purchasing new software and implementing these measures when there are colleagues and departments on campus with expertise in both democratic participation and computing who could have been approached to help develop a free or cheaper option, and one more oriented towards campus polling needs.
Due to these reservations, we will need to consult with members on whether Citizen Space is an appropriate tool with which to consult, discuss and deliberate on our collective future.
The Covid-19 briefing is a missed opportunity to share with staff the full and much more nuanced picture of College finances; it shows a failure to engage meaningfully in forms of pay redistribution; and it fails to enact support real democratic participation at a moment when anything less that this will spell yet more disaster for the College.