Lancaster University boss defends job cuts plan while staff call for re-think as strike looms
A Lancaster University boss has defended plans for more than 400 job losses while staff have called for alternatives, such as top management pay cuts.
Contrasting arguments about the factors behind Lancaster University’s financial situation and ways forward came at Lancaster City Council’s latest full meeting.
Prof Sarah Kemp told city councillors that fewer international students are among the key reasons why Lancaster University needs to save £35m.
But some university staff claimed bank loans and interest rates are putting pressure on the university, while no senior mangers face redundancy or pay cuts unlike other staff, they claimed.
Staff in the University & College Union (UCU) lobbied councillors and the public outside Morecambe Town Hall then spoke formally to city councillors during the meeting.
Dr Sunil Bangha said: “Lancaster University is in crisis and the UCU believes this is entirely of the senior mangement’s making. It is also a crisis for the city and community. It puts the future of many residents, businesses and the community at risk.
“The university wants to cut around 462 jobs between academic and professional services staff. A voluntary redundancy scheme is under way now and a compulsory redundancy scheme starts in September.
“The university is claiming financial distress. Ironically, while cutting jobs, senior management layers are not being considered for redundancy or a pay cut. The overall executive pay is currently £2.3m.
“Such an exceptionally large reduction of staff requires exceptional evidence to support it. We have not seen such evidence. We have asked for it and are still waiting.
"Early information we can access has not been convincing. The university is basing its decisions on the findings of the external accountancy firm, KPMG. But they are refusing to share the final KPMG report.”
He added: “The university is a charity, not a business, and does not need to pay any dividends to shareholders.So why is there this sudden narrative of a financial disaster?
“We believe the university has taken on loans of £115m from banks, which is putting pressure on interest payments and cash flow.
"The easy way out is by firing hundreds of staff rather than do the difficult job of managing finances well. There seems to be no accountability by one of the biggest employers on its decision which effect the city and community to our elected representatives – the city council.”
Dr Shakthi Nataraj said: “Lancaster University is a hub of economic activity. One of the region’s largest employers. It indirectly and directly supports 6,000 jobs. It generates £1.2billion across the north-west and £2billion across the UK.
“It creates a highly qualified workforce which accelerates economic growth. It provides education for students from all backgrounds, playing a key role in social mobility. It prepares the next generation of doctors and engineers, many of whom stay in the area.
“Cutting one in four jobs would impact on 462 families and also on accommodation, shops and high streets, taxi businesses, hotels, tourism and other businesses used by staff and students, along with families, friends and visitors including international visitors and researchers.”
They appealed to the city council to write to Lancaster University’s pro-chancellor, asking for compulsory redundancies to ruled-out and highlighting the issues.
They also asked councillors to contact the government universities minister Jacqui Smith MP and to show solidarity with UCU union members who plan to strike this September against compulsory job losses.
Prof Sarah Kemp, a university pro-vice-chancellor for engagement, said: “Lancaster University is a top 10 UK university which delivers both education and research.
"It is ranked highest of all north west universities and is the third most research intensive in the UK after Oxford and Cambridge. Over 90 per cent of research has been independently rates at ‘internationally excellent’ or ‘world-leading’.
“It teaches around 26,000 students across six locations – the largest is in Lancaster with the others in China, Malaysia, Indonesia, Ghana and Germany. Over time, the international student population in Lancaster has grown to about one third of our campus population.”
She added: “The university is in sound financial health, with good levels of liquidity that would be the envy of most UK universities.
"However, significant changes have taken place, particularly with the international student market over the last two recruitment cycles and we expect this to get significantly worse for this summer cycle. These changes are impacting all UK universities.
"For Lancaster, we need to act over the next 12 months if we are to continue to be financially strong and stable. This action amounts to reducing costs by £35m. ”
She said there were roughly 1,000 fewer international students now than in 2021, equating to a £25m shortfall. Other factors such as rising inflation, costs, pay awards, national insurance and minimum wage changes meant the university has to find £35m in savings. KPMG had independently confirmed the figure.
The plan is to reduce the workforce from July 2026, taking staff numbers back to the level of around 2018. The process would be fair and spread across academic and other staff, she said.
There are no plans to withdraw from any whole academic discipline. Humanities and social sciences would remain.
The university had also considered the need to keep growth areas, such as cyber security, and to support local businesses and generate new ‘spin-out’ businesses.
Overall, Prof Kemp said the university would follow its values in supporting individuals, communities and partnerships including Eden Project Morecambe.