University finances still surrounded by major uncertainties

UU has agreed with the UU Council to cut 35.1 million euros from its budget in the new calendar year. The cuts could rise to 70 or 80 million euros by 2029. This prediction, like the 2025 budget, is surrounded by great uncertainties.

What is certain is that many things will become more expensive in 2025, causing certain fixed costs to rise. Inflation is estimated at 3 to 4 per cent, but the university administration believes it could be as high as 10 per cent in some sectors. In addition, all university employees will get a 1 per cent salary increase as of January which is not compensated for all salaries by the government.

UU also expects less revenue from the government next year because the number of first-year students is likely to fall. Funding from the government is based partly on the number of students a university has. In addition, the university will suffer from the austerity measures announced by the new cabinet. They initially amounted to 1 billion euros but have now been reduced. The House of Representatives has now agreed to the budget for education, but the Senate will only vote on the education budget after the Christmas break. The UU budget does not take the change into account as the news came after the UU budget had already been drafted and the UU Council had discussed it. Any consequences have yet to be studied.

Thus, the situation could still be slightly better in 2025. Should that be the case, the faculties and departments will each get their share of it, vice-president Margot van der Starre promised during the meeting with the University Council on December 9. But there could also be setbacks ahead. For instance, the budget does not take into account the consequences of a possible introduction of a fine for graduating late and the consequences of introducing the Internationalisation in Balance Act. The fine seems to be off the table, but it is unclear what this means for universities because the ministry had already factored in the cutbacks to be achieved with this fine. The reduction of English-taught programmes and, consequently, the intake of international students is also yet to be voted on. This law could affect the intake of students as a whole and thus UU's income, among other things.

Number of jobs already in decline
The budget cuts will have major consequences for all faculties and services. Most faculties are making significant cuts to their reserves. The entire university has now introduced a selective vacancy freeze. After growing in 2023, the number of full-time jobs has dropped by one per cent this year and this figure will rise to 4 per cent by the end of 2027. 378 full-time jobs on permanent contracts are expected to disappear.

The administrative office is the one expected to get hit the most. Due to the nature of the service, it is not allowed to have reserves and must save 14.7 million. The Faculty of Humanities comes second. There is also less money available for real estate because a maximum of 15 per cent of turnover may be spent on that each year. Therefore, if turnover falls, so does the amount that can be spent on real estate plans.

Council members diverge
The University Council met on Monday, December 9, to discuss the budget. Therefore, before the cabinet had compromised with a majority in the House of Representatives. Members appeared divided. Staff member and economist Frank van der Salm agrees with it. He finds the budget "solid and sound". He considers most faculties "financially solid" and trusts the university administration's word that Humanities will be supported if forced layoffs prove necessary. He also acknowledges that painful choices have already been made across the university: in UU's Q3 report, he identifies a sharp drop in temporary staff. However, he has his doubts concerning the decision to do away with honours education at the bachelor's level, as it is "only budgeted for 1.3 million."

Van der Salm finds it strange that the UU Council is being asked for assent on December 9, while the Service Council has yet to issue an opinion on the budget for the administrative office and the expectation that the 14.7 million cut will increase in the years after 2025. He thinks this is a lot, but wonders if there is not more to be gained from the administrative office after all.

Staff member Gerhard Blab does not agree with the budget and votes against it. He has a problem with the fact that the budget is not based on the framework letter made in the spring. The framework letter provides insight into the expected income from the state for the new year and the following two years, and forms the basis for the budgets of the various faculties and departments. After the framework letter was made, the cabinet's budget for education was shuffled. Things only seemed final in September, when the budget was officially announced. So, according to university rules, the board would have had to adjust the framework letter.

Secondly, Blab thinks the cut imposed for 2025 is too large and feels that spending has been cut too quickly and without a vision. He understands that the university board wants to anticipate the cabinet's austerity measures but sees no reason to do so this sharply at this point, especially since The Hague is not yet out of the woods either. "This has already caused a lot of unrest and structural damage." By which he refers, among other things, to the selective vacancy freeze that has already increased the workload. He fears that hasty decisions have been taken when the damage could have been limited before 2025. Next year, austerity measures could have been considered in peace.

From outline agreement to coalition agreement to Budget Memorandum
The university administration says it could not and did not want to act differently. The framework letter was based on the outline agreement and all universities have been lobbying to ease the pain. "We tried to keep the sector plans and the starter and incentive grants. We informed the council verbally about the changes because we did not know how else we should have done it," says Van der Starre. The components submitted their budgets before Budget Day, the day when the government's budget was officially announced. Then came the negotiations with the opposition parties, which led to more changes.

Rector Henk Kummeling responded to Van der Salm's comment about scrapping honours education at the faculty level. "We can do away with honours programmes by adjusting the education model." Further cuts to the administrative office are not wise, according to the rector. "We would be taking money away from services that affect teaching and research. We want to sit with the faculties and investigate which services we want to keep in the air, for example when it comes to student counselling. We have to be careful with the idea that there are more savings to be made in the administrative office."

UU likely to have money left over this year
Chair Anton Pijpers wonders where Gerhard Blab heard that faculties think the budget cuts were too many and too fast. Blab says he can draw that conclusion when he sees how faculties and departments are doing financially after the third quarter, the so-called Q3 report. "I see that faculties have spent much less than they had budgeted last year. We also see that vacancies are not being filled. Faculties have shot into crisis mode. The problem is how the mission of the college is perceived on the work floor."

The Q3 report states that the so-called operating result was expected to be 4.7 million, but the realised amount came to 26.6 million. Van der Salm also sees the windfall. "But that does not diminish the need for cuts." UU President Anton Pijpers says that if any money remains at the end of the year, it will go to the reserves of the faculties that spend less than budgeted.

Unnecessary damage
 Staff member Gert Folkers, from the Faculty of Science, objects to the procedure. He also finds it disturbing that the "advisory role of the U-raad has not been fully utilised" and has not been asked to help think about how the university can make savings. "A different decision could have been taken,’ he says. The millions that cannot be paid from reserves and require cuts could have been paid from the risk margin and the money left over this year, he added. The risk margin is a pot from which calamities can be paid during a calendar year. Five million euros are there every year - also in 2025. 'If we had done that, we would have been able to think calmly about the budget cuts. The pressure that the Executive Board is putting on the faculties trickles down to the departments and they then start firing staff. In my opinion, this should not have happened.’ Staff member Erna van Wilsem concurs with Folkers. ‘Damage has already been done. When I see that Q3 is positive, I can't help but think this could have been prevented and that worries me." Folkers did not agree, Wilsem did after doubts.

Van der Starre says all faculties could have indicated in November that they would not succeed. ‘But they didn't give us that impression. It was doable. The faculties can get on reasonably well. Only real estate, UBD and Humanities have problems.’ Anton Pijpers thinks there is no reason to panic.  ‘They were allowed to draw on reserves and they have done so." Student member Saban Caliskan supports staff members talking about scaremongering. According to him, many UU staff see the austerity order as a threat of dismissal.

Pruning with policy 
According to Van der Starre, the conversation remains on how exactly the cuts will be framed. In particular, the board wants to prune things that do not affect the quality of teaching and research. However, she says they will have to say no to certain things. ‘Should we continue all programmes and projects?" When it comes to support, for example, manpower and licences can be saved if the number of IT applications that do the same thing is reduced. ‘How much memory storage do we need?’ The cost of memory storage grows every year. They are also considering hiring fewer freelancers or offering freelancers a job.

The council will be consulted again in the spring about which construction projects to prioritise. "We won't stop the works for the Kruyt building, veterinary medicine and Van Unnik. However, we could slow down the pace and look at investments." Anton Pijpers says short-term ideas will be discussed in February and Henk Kummeling added that this could include a brainstorming session with the council. 

The council voted after a short adjournment during which the council members discussed the 2025 budget with each other. 16 members agreed, and seven did not.
 
Editor's Note: Three days after this UU Council meeting, the Supervisory Board also approved the 2025 budget.