THIRD LEVEL INSTITUTIONS in Ireland are under financial pressure – so how can they survive?
A new report from Grant Thornton says that change is needed if they want to come out of this period, and that colleges and universities are already making some changes.
The independent analysis of the financial health of Ireland’s Universities and Institutes of Technology, A Changing Landscape, compiles five years of accounts for 21 higher education institutions (HEIs).
Elaine Daly, report author and Head of Higher Education for Grant Thornton, noted that last month for the fourth year in a row not one Irish university made the Times Higher Education top 100 list of the world’s most prestigious institutions.
“Whilst this is a cause for concern it highlights the urgent need for decisions to be taken in Ireland to get a better result in coming years,” she said.
Money, money, money
The report found that student numbers have increased by 26 per cent to 193,187, from 153,606 in 20071, while core staff numbers have fallen 8.5 per cent to 16,943 from 18,512 in 2007.
In addition, the annual operating surplus in the sector has fluctuated significantly during the period, meaning universities and IoTs have an “increasingly limited financial cushion for strategic development and to withstand potential future funding shocks”.
The report suggest that colleges need to take a more commercial approach to ensure financial sustainability.
Making money
There were a number of revenue options highlighted in the report, with Grant Thornton saying that institutes are already taking or actively considering many of them.
They include:
On the cost side, options being considered include consolidation, regional clusters, the use better procurement processes and outsourcing to drive down operating costs.
Daly said:”It is clear that these initiatives can only go so far and additional exchequer funding or increased tuition fees may therefore also need to be considered as part of the package of measures to bridge the funding gap.”
If resources are not found, standards may fall, and make the aspirations of the government’s National Strategy for Higher Education to 2030 unreachable.
Untapped opportunities
There could be some untapped opportunities, said the report, such as growing revenue from international students.
At the moment, less than 1 per cent of total income is currently raised from this source in the IoT sector in 2011.
However, the report says that Irish institutions will need to perform better in international league tables and internationalise curricula if they want to attract students from overseas.
Outsourcing activities to specialist third parties is another area colleges should consider, with savings of 20-30 per cent considered achievable, said the report.
The full report is available for download here.
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