Oxford given debt warning
Oxford University will be wallowing in #600m debt by the year 2015, according to a financial model from KPMG Consulting, writes Jonah Bloom.
The model commissioned by university chief Peter North predicts Oxford’s 1995/96 surplus of #76m will plummet to a deficit of #90m by 2005. By 2015 the deficit could hit #600m, although KPMG admitted the models’ accuracy decreases over time.
Based on the continuation of present trends, the consultants’ scenario shows a dramatic decline in spending on teaching over the next few years.
‘Teaching falls from 28% of activity to 16% in ten years, and by year 25 becomes a marginal activity at less than 6% of total expenditure,’ says the report.
Sponsored research appears to have an inverse relationship with teaching, its predicted share of expenditure rising to a total of 90% in 2015.
A spokesman for Oxford University said: ‘Scenario modelling is a useful tool for us. But at the end of the day it is just that. The results do, however, point out how the university finances might develop and the university is grappling with those issues.’
Michael Sibley, Oxford’s senior assistant registrar, commented: ‘This is simple modelling focusing on current trends. No one is for a minute suggesting that this is a forecast of our finances. The university is looking at money raising, but that has not been prompted by this report.
‘The problem the report highlights is common to a lot of universities,’ he continued. ‘Research councils and charities only meet a proportion of the cost of research contracts, so clearly the whole issue relates to the research.’