BC post-secondary sector - current environment
As the current government in BC enters its final year in office with a set election date of May 14, 2013, it has initiated several activities related to the post-secondary sector. While it is not clear how many of these initiatives will be completed in advance of the election, we are closely monitoring the activity and anticipating changes where appropriate.1) Operating Budget Reductions
As noted in the University of Victoria’s 2012/13 Budget Framework document, the provincial government’s February 21, 2012 Budget and Fiscal Plan includes savings targets in post-secondary non-academic services. The savings targets were $20 million in 2013/14 with a further $30 million in 2014/15.
In the budget tabled February 19th, 2013, the $50 million cut in funding to the post-secondary system noted above will now be applied over three years instead of the original two: $5 million in 2013/14, $20 million in 2014/15 and $25 million in 2015/16. Information about these savings targets can be found at pages 20 and 21 of the Provincial Government's detailed budget and fiscal plan 2013/14 - 2015/16. (http://www.bcbudget.gov.bc.ca/2013/bfp/2013_Budget_Fiscal_Plan.pdf)
The government's stated intention is that the $50 million cut will be covered by "savings" in the post-secondary education system over the next three years. This substantial amount will be difficult to achieve without affecting the quality of educational services to students given the budget reductions and unfunded cost pressures that universities have already been experiencing the last several years.
Uvic already has an ongoing structural deficit in its operating budget resulting from the annual cost of individual progression increases for faculty and staff that every year exceed the increase in tuition revenue allowed by government. Salary increases are not covered by provincial government funding.
This structural deficit, together with the contract settlements for faculty and staff, and the reduction in provincial government funding for the post-secondary sector, meant that all areas at UVic were asked to cut 4% from their budgets, effective April 1, 2013.
This 4% reduction in area budgets will cover UVic's structural deficit as well as the cost of salary settlements in 2013/14 (with a built-in, but as yet untested assumption about the possible size of the arbitrated faculty salary increase).
In 2013/14, this should allow UVic to meet its statutory obligation to operate with a balanced budget.
There are several more unknowns for 2014/15 and beyond. Further reductions in area budgets will be required at UVic next year depending on the faculty salary arbitration award, the reductions in provincial operating grants to universities, and settlements in upcoming contract negotiations at our university (which expire in 2014/15).
On May 14 British Columbians will go to the polls to elect a new government. This means we can anticipate that a new government may present a revised budget after the election. As a result, we need to continue our budget planning based on the financial assumptions that we have today.
2) International Education Strategy
The government of British Columbia has committed to work with the sector to double the number of international students in four years. Included in the strategy is an enhancement to the mandate of the overseas BC Trade officials to assist with the marketing of BC as a destination of choice for international students. UVic will continue to work with the government to determine how and where this objective can be supported in the context of our own strategic plan. View information about the international education strategy.
3) Quality Assurance Framework
As part of the BC Jobs Plan as well as in support of the International Education Strategy, the government has undertaken a consultation process on enhancing the quality assurance framework in British Columbia. In August, through the Research Universities Council of British Columbia, UVic provided feedback on the government’s initial Framework document and emphasized the importance of developing a smart regulation-based approach that respected the diversity of the sector and the governance structures of the institutions. View information about this initiative.
4) Administrative Service Delivery Transformation
Government's Budget 2012 included targeted savings in post-secondary non-academic administrative services.
Last summer, the Ministry initiated a project that was intended to build on the effective and efficient practices and cost savings achieved by individual institutions. The objective of the initial phase (called the Opportunity Assessment Phase) was to identify and assess opportunities that might be suitable for further exploration.
A report by Deloitte & Touche LLP, consultants, commissioned by the Ministry of Advanced Education, Innovation and Technology to identify potential opportunities for administrative savings through shared services in the post-secondary education sector, was released today. The full report is available at: www.aved.gov.bc.ca/administrative_service_delivery.
Within the report, opportunities for savings are presented in three tiers. The Tier 1 and 2 opportunities that could provide savings at the University of Victoria primarily involve sharing procurement processes and contracts between institutions in order to reduce costs, and further sharing of IT infrastructure.
We are pleased that there is a commitment from the Minister that any opportunities selected for implementation will respect collective agreements and regional contracts already in place and are not expected to result in any staff reductions. Tier 3 opportunities in the report, which would have implications for collective agreements, are not being considered.
It is important to recognize that the opportunities identified in the Deloitte report are directional only. Detailed business cases will need to be developed to confirm that there are actual savings to be realized and whether the savings are within the ranges estimated in the report.
The preliminary estimated savings, as determined by Deloitte and prior to the completion of detailed business cases, are in the range of $38-$83 million per year across the system in Tier 1 and 2.
The report is clear that administrative savings will require up-front investments and if supported by business cases, will take approximately six years to achieve. UVic has already put in place a number of the initiatives referred to in the report, so those savings have already been realized, at least in part, at our university.
The government is reducing post-secondary funding by $50 million over the next three years. This substantial amount will be difficult to achieve without affecting the quality of educational services to students given the budget reductions and unfunded cost pressures that universities have experienced over the last several years.
Since 2009 UVic has implemented cost reductions amounting to more than 8.5% of our operating budget.
These reductions have been achieved by protecting, as much as possible, the university's ability to fulfill its teaching and research mandate and the high quality of programs and services for students. For example, the standardization of computer purchasing on campus and the consolidation of the courier services to one courier designated by competitive bidding has resulted in annual savings of more than $850,000.
The Deloitte report recognises that a great deal of collaboration is already happening across the post-secondary sector. The more formalized sharing of best practices and assessment of potential intitiatives, as recommended in the report, will be helpful.
BC universities have a record of success over many years in collaborating, provincially and nationally, on initiatives that promote efficiency and effectiveness, and minimize costs. The BC Net shared information technology services consortium and the Canadian Research Knowledge Network, a consortium of Canadian universities that purchases licenses for digital content, are two prime examples.
Up to this point, UVic has not been directly involved in the government process that led to the Deloitte & Touche report. We have, however, been in contact with our research university colleagues and have indicated our commitment to work with them to move quickly to pursue further opportunities such as procurement of commonly purchased goods and services, enhancing the information technology service delivery that already exists with BCNet, and sharing digital resource services where solid business cases exist to establish savings and support change.
We look forward to directing any administrative savings that can be achieved toward areas of student need.