‘Caution is advisable, but only in moderation’

Margot van der Starre has been the university’s vice-president for over a year. Among her responsibilities are the university's finances. Although most people have no problem spending money, for the university this turns out to be an issue. In the past few years, UU intended to spend millions more than it received but it never managed to do so. 2021 was no different: last year, the plan was to decapitalise by 25 million euros. “But we ended up with a surplus of 44 million, a difference of about 70 million”, says van der Starre.

This is not a question of frugality on the part of the faculties and boards. There just have been many unexpected windfalls in 2021. For example, the university recovered 19 million euros that it had overpaid in taxes for several years in a row. In addition, the new accountant decided to move 10 million euros that were supposed to be spent on an item last year — and therefore listed under expenses — back to the reserves because the amount wasn't spent at all in the end. The pandemic resulted in fewer expenses once again: people travelled less and fewer conferences were held. What's more, UU was granted the so-called NPO funds from the Dutch government, an amount meant to compensate for backlogs in education and research caused by the pandemic and improve students’ mental health. “All very well, of course, but it takes a while to spend those funds”, explains Van der Starre.

Permanent positions
There are several reasons why a university would prefer to have less money in the coffers. For years now, Dutch universities have urged the government to allocate more money for them, as they are short of some 1.1 billion euros annually, especially with regard to research. But the institutions with money left over at the end of the year and a lot of savings cannot claim to be in need of compensation. Former Minister of Education Ingrid Van Engelshoven, the predecessor of Robbert Dijkgraaf, conducted an investigation into universities' savings and found out that they had quite a lot of them. However, she also acknowledged that their plea for more money was justified. Dijkgraaf has now promised to give universities an additional sum of 700 million euros annually, on a structural basis. Although that's not the billion euros asked, that sure helps.

The second reason for preferring to spend money is that this would help relieve employees' workload. That means employing more people, preferably in permanent positions, which in turn means that faculties have to look for assistant and associate professors who can combine teaching with research — a requirement UU insists upon. “The workload is heavy and new assistant and associate professors can help reduce it.”

However, employing people permanently implies taking risks. What if the number of students drops and the demand for lecturers decreases? This could possibly lead to redundancies. “2011 is still fresh in our memories”, says Van der Starre, referring to a rather painful year of “shortages and redundancies. It was tough, so that is one of the reasons why we became cautious when it comes to employing people on a permanent basis.”

More confidence
The Executive Board is trying with all its might to impart its confidence in UU's (financial) future to the rest of the university, so that they can encourage the faculties to employ more assistant professors and associate professors on a permanent basis. “There are many conversations going on. As an employer, it’s nice that you want to offer people job security for an indefinite period of time, but it’s unrealistic to think that every employee will be working here for forty years. I want to try to take away the uncertainty that faculties feel. UU is doing well, we attract plenty of new students every year, and we always manage to raise sufficient funds, year after year. Therefore, one can be confident that we will continue to do so. Just look at the growth funds and Gravitation funds we have collected. Caution is advisable, but only in moderation. By employing new people, we can reduce the workload.

At the faculty level, Van der Starre is quite successful in getting the message across. “But the deeper you go into the organisation, say the research or education level, the more people struggle to make structural commitments. Moreover, they still often have reserves saved ‘just in case’. All those reserves add up to a considerable sum.”

Financial stability
In addition to these many conversations, the Executive Board has taken several initiatives to provide the faculties with more financial security in the hope that they will have the courage to employ permanent assistant professors. For example, the university’s so-called Financial Allocation Model (UVM) has been adjusted. That's the model used by the Executive Board to allocate the funds received from the state and the tuition fees to the faculties and services. What will change from 2023 onward is that faculties will receive a higher fixed sum – the minimum amount of money they get to spend on education irrespective of the number of students or the number of credits obtained – at least until 2027. The fixed sum for research has been increased as well.

The Executive Board has also introduced a 50-million-euro boost. This year, UU's faculties and University College Utrecht have received a total of 5 million euros through specific distribution guidelines in order to reduce the workload and be able to employ more people on a permanent basis. 10 million euros will be available every subsequent year and another 5 million in 2027, which is the final year.

The Executive Board decided to allocate the money at the end of 2021, when it became clear that several million euros would be left in the budget that year. Now, the faculties have submitted their plans and are recruiting more people. “Unfortunately, in some fields, the shortage in the labour market is causing problems. We can’t offer more than what has been agreed upon in the collective labour agreement. The business sector usually offers better pay. Some programmes really suffer as a result of this competition. Therefore, scarcity is becoming a problem. We have to think about how we can remain attractive.”

More general reports will suffice
Since her appointment, the vice-President has been somewhat surprised by the university’s financial planning. At the university level, there is the budget for the new year, the annual accounts for the previous year and the financial framework letter that maps out a few years ahead and upon which the faculties and services must base their budgets. The order of the various financial documents does not always make sense, Van der Starre complained once in a meeting with the University Council.

And then there are the quarterly reports, which provide an account of the expenditure in a given quarter. “In May, I get to see what has been spent in the first quarter, and it’s only in August that I have an overview of the expenses of the first half-year. Should it then turn out that there is money left over, then there is very little time left to adjust this before the end of the year.” For example, when it comes to the recruitment of staff, the university counts about six months from vacancy to appointment. “So, the organisation is often lagging behind, which is something I’d like to see change.”

She would like the financial reports to reach her more quickly. “Now, every expense and every incoming sum has to be reported, down to the last euro cent. Perhaps that’s not necessary on a quarterly basis. Now we look at euros but you can also look at other parameters, such as full-time employees. Less detailed reports would allow us to respond more quickly.” A somewhat more general overview would also suffice at the faculty level. “Because they face the same problem, namely that it becomes difficult to make adjustments when the end of the year is already in sight.”

Strengthening ties with directors
One thing she has already changed is the consultation with the faculty directors. “Of course, there were consultations between the Executive Board and individual faculty boards, but none of those consultations included all the directors together as well as the board. That was something the Executive Board felt was lacking, so we've changed it. This way, we can also find out more quickly how the workplace reacts to our plans and we will become aware of the questions that exist within the faculties. Take the introduction of hybrid education, for example: it’s a great plan, but in practice, people run into problems that slow down the pace. Thanks to such consultations, we can quickly find out what’s going on where and we can adjust the plans accordingly, which turns us into a more decisive organisation.”

These consultations are part of the changing administrative structure the Executive Board intends to implement. “The current focus is on the University Corporate Offices, but it goes beyond that. The consultation structures between us and the faculties are also changing. The aim of all this is to be more decisive, improve our prioritising skills and reduce the workload.”

What about the government?
Finally, van der Starre has two wishes that only the government can fulfil. Firstly, she hopes that the government will bring more tranquillity to the financing of the public sector so that institutions will be able to plan further ahead. Before Van der Starre came to the university, she worked for years as a manager in the healthcare sector, where she had to deal with the same vicissitudes. “I don’t think you can treat these sectors like that. The financing for both healthcare and education comes in waves, which makes people cautious about spending money. On top of that, when a lot of money comes in all of a sudden, it usually has to be spent within a certain period of time, which is simply impossible sometimes. This leads to criticism.”

Her second wish is for the government to have more confidence in the sector when it comes to the way the university spends its money. “That would save us money immediately because now we have to set up an entire control system for each additional amount we receive to show that we’re spending the money on the intended target. Fortunately, ever since the last elections, we’ve had a minister who understands very well how academic education and research work. I hope he’ll be given the political space to offer us peace and confidence because that will benefit the entire country.