“You cannot fix a deficit by undermining your very source of income. You cannot cut your way to growth. Austerity is a failed and dangerous idea” 

(Mark Blyth, ‘Austerity: The History of A Dangerous Idea’, January 2013)

Dear Members, 

Goldsmiths’ senior management team (SMT) continually tells us that it needs to make staff redundant to fix the college’s finances. This is false. Not only are there other, better ways to restore the college to financial health, but, more importantly, these cuts risk setting Goldsmiths into a spiral of decline. 

The redundancies management seek to make would reduce our income from tuition fees, possibly requiring us to make further job cuts in future. In trying to cut its way to growth, SMT’s strategy is repeating the mistakes of governments that have embarked on austerity programmes. Goldsmiths doesn’t have to shed staff; if we refocus on growth we can protect jobs and get rid of the deficit. 

So how do we get out of this mess, if not through SMT’s austerity strategy? 

There is a clear alternative to mass layoffs, but before we get to that we need to think about how we got here. 

Goldsmiths’ finances were relatively healthy up to 2019, with large surpluses from 2011-17. Even in the period 2018-20, Goldsmiths increased its market share (growing from 8,000 students to 10,500) despite heavy competition from the Russell Group. 

What SMT has done since then has been disastrous. It has:

  • Set a budget for £6m of savings on staff costs, without calculating the likely impact (including loss in income from students if courses are cut)
  • Spent £3.5m on the “restructure” (£1.6m on bringing in KPMG and other consultants, £1.1-1.5m on VSS, £280K on three new Heads of School; £160-250k on a new ‘Director of Change Management’, ‘Change Lead Consultant’ and a full team)
  • Signed itself up to highly restrictive bank loans from Lloyds and Natwest, with terms including requiring the College to make permanent surpluses (also, the banks could take possession of most of Goldsmiths’ property if the College defaults)

Why didn’t management:

  • Seek government assistance (like a group of art schools, including the Royal College of Art, who were awarded $10m this year)?
  • Proactively fundraise (like the Courtauld, which won a $5m endowment from the Getty)?
  • Have any kind of a strategy for how to grow by building on Goldsmiths’ global reputation?

So what should the College do now? Put simply, we need to abandon the proposed redundancies, which amount to a plan for continuous contraction, and instead refocus on growth. 

We need to:

  • Cancel the consultants, redeploy resources away from the restructure and towards growth (fundraising, student recruitment)
  • Open the books so staff, students and the Goldsmiths community can see full accounts and the terms of SMT’s deals with the banks
  • Go back to the drawing board with the banks: the covenants must be renegotiated to allow for growth
  • Lobby the government for short term financial aid and long-term reform of HE funding
  • Reform College governance structures so this disaster never happens again

You can read a fuller presentation here: https://docs.google.com/presentation/d/1xT3POpeOcKy7t3VJjHa1DO7QdzyVfAiva9sW99KYr04/edit#slide=id.gf22335092b_1_33 

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