Can St Andrews Survive: The Coming Funding Crisis and How to Solve It

We are at war. So says the Prime Minister and the news and my neighbours over the fence. Indeed, all the markings of war are before us: an evil enemy, a (self-styled) ‘wartime government’ and, incredibly, a heroic national effort. Community has been cultivated and national spirit nurtured as we, a fractured people, come together in what is a remarkable armistice. We paradoxically unite in our isolation, in the hope that tomorrow will come quicker and today will be less painful for our so doing.

Concurrently, our University faces its own war, not against an interminable virus but a balance sheet at breaking point. It is a war of vicious attrition; it is a war we are losing. Before long we must understand, like our country before us, that unity is survival. Our recently-announced funding gap gave us twenty-five million reasons to be worried. The hands of the doomsday clock have shifted: here’s why we’re even closer to midnight than we think.

Firstly, we are facing the increasing likelihood of an online Martinmas semester. With the cancellation of face-to-face teaching at Cambridge for the whole of 2020/21, this seems all but inevitable now. Alongside this, one can only expect a drop in international student numbers. “It’s very difficult to see how international students will be able to return in any numbers at all” said the chief executive of Fife Chamber of Commerce.

Using data from the British Council, consultancy firm London Economics estimate a 47 percent deferral rate for incoming EU and non-EU students. A figure anywhere near that would hit St Andrews particularly hard: more than half our £126m income last year came from non-EU tuition fees alone. Oxbridge have trust funds and alumni they can milk for cash. We do not.

Yet this particular financial picture, you may be thinking, is purely speculative. So let’s look at the current situation: as things stand, we’re £5.3 million in the red. That’s not an estimate or an adjustment or a number pulled from thin air but the official, pre-COVID figure from the University’s most recent financial statements. In next year’s accounts, that figure will be larger. For starters, add to that £5.3m the confirmed £25m funding gap already announced. £30m off the block, just like that. The iceberg is right in front of us, and we are headed straight for it. We need to, like a St Andrean Arts student, change course. Fast. And unlike a St Andre-an Arts student, we need money – lots of it. Soon.

Encouragingly, the Scottish Government has been considering a stimulus package for uni-versities. This is welcome news, of course. Yet amidst all our fiscal uncertainty, I can be sure only that any such package won’t be more than a band-aid on a broken leg. Better yet, it may not materialise at all: Universities UK (UUK) recently had a £2bn English university bailout plea rejected by the British Government. The reasoning is simple: everyone is hard-pressed, but not everyone can be bailed out. Universities are, justifiably, near the back of a very long queue. Perhaps if one of our Universities is to make a COVID-related breakthrough there may be more political capital for a bailout. Until then, universities must find other ways to stay afloat.

The good news, for us, is this: the University of St Andrews has more than £300m in net assets. The bad news is that the vast, vast majority lies in illiquid non-current assets: in particular, land and buildings.

Our Principal thus finds herself facing a Herculean task. For good or for bad, this is a propitious moment not just for the University she leads but for herself, personally. The way that Professor Mapstone steers us through this crisis will undoubtedly shape the legacy she leaves behind when her current contract expires in 2026.

Conventionally, there are three ways in which we could raise money: selling, borrowing, and debt issuance. On the former, our Principal could use this crisis to shake off some of our oldest, dearest buildings from the balance sheet and in the process raise some serious cash (those assets were valued at more than £330m last financial year). This, however, would be a travesty. Our buildings aren’t just the backbone of our balance sheet: they are our history and our culture, our lecture theatres and our libraries.

Notwithstanding the fact that we use most of them, our University buildings were valued in materially different circumstances: the economic climate was oh-so cheerier than the one in which we’re currently hardening like overbaked banana bread. Given the extent of the coming recession, our buildings could potentially be sold at bargain prices. That is out of the question: to flog pieces of our history off to usurious property developers and golf-mad millionaires is unforgivable.

Borrowing and debt issuance may not be much better: the University currently has just £3.8m in net current assets and a debt-to-asset ratio of 0.50. This means that for every pound of assets we hold, we owe 50 pence to someone, which is about normal. Yet going much beyond this level would be the equivalent of having a poor credit score: borrowing would be more expensive, somewhat defeating the purpose of borrowing in the first place, unless as a last resort.

As of late, I have seen the emergence of a puzzling financial phenomenon: the voluntary reduction of senior staff pay. Amidst the muddy waters of our finances, I shall be crystal clear on this: our higher-ups can keep their loose change. When such a large deficit hangs over our heads – darker and more threatening than any St Andrean raincloud—such acts amount not even to a penny in the church collection. In theory, these acts are a show of solidarity with furloughed workers. In reality, recent strike action fell on deaf ears. It is culturally ignorant and financially infecund. Our staff know their worth.

No: with conventional options exhausted and small gestures ineffectual, this crisis forces us instead to carve out a path where there is none. We have been given a rare, opportune mandate to push for more radical, fundamental, enduring change – inchange enough to weather not just this storm, but any and all post-COVID crises that may wash upon our shores. It is imperative that we strike now, and forge from these white-hot fires of crisis a stronger, more resilient University – not alone, but together.

What I envision is a cross-Tay partnership of equals: a union of St Andrews, Dundee, and Abertay in a federalised University; fiscally sound and academically ambitious. With their strength in vocations, our neighbours offer much-needed variety to our degree offerings: Dundee produces nurses, dentists, lawyers; Abertay game designers, engineers, food scientists. Dundee also has a magnificent drug discovery unit, and one of the top art and design colleges in the country. In short, our neighbours epitomise a modern relevance, set in perfect opposition to our ancient reverence.

What’s more, these universities reside in a wonderfully vibrant city: the UK’s first and only UNESCO City of Design, and home of Scotland’s inaugural V&A museum. Dundee is a modern success story of innovation and reinvention—just the place in which our world-leading University should hope to have a stake. If none of this excites you, think about the possibility of rail travel making a triumphal return to our sleepy town. Perhaps then you’ll be… all aboard!

For any such merger to be successful it must be quick, cost-effective, and mutually advantageous. On the latter point, St Andrew’s finds one of its greatest strengths in subject flexibility—as an economist who had an ever-so-brief, oh-so-fitful fling with comparative literature, I speak from experience. However, say you are a St Andrean computer scientist with a penchant for politics, or a geographer who goes gangbusters for game design. At present, you can pursue these passions in your spare time; maybe take an online class or two, join the student society, or go on a couple of Reddit threads.

Yet imagine you had it better. Imagine you’ve just got out of your 10am Divinity lecture in St Mary’s: you hop on the train at St Andrews, and by 11am you are sitting in your food science lab in Dundee (someone’s got to make zero-calorie eucharist… at which point I’ll reconsider my Catholicism!) The same logic applies for our neighbours. This costless expansion is perhaps the merger’s greatest benefit but the possibilities are limitless. We mustn’t allow a hubristic snobbishness or impotent lack of ambition stop us from realising this potential.

For those of you who may retort at the suggestion, may I remind you that Dundee was originally a St Andrews college? What caused our initial separation was the Robbins Report of 1963. The report advocated the expansion of all universities such that “all who are qualified to pursue full time education should have opportunity to do so.” The report recommended an immediate increase in supply of university places in order to meet the ever-growing demand. (N)ever the champion of diversity and inclusion, St Andrews’ policy of non-duplication of courses stood stubbornly opposed to Robbins’ recommendations. That, then, was the regrettable end of our first union: Dundee broke off to expand its course offerings, free from the pernicious paternalism of its founder.

Today, as then, St Andrews’ obtuseness presents the biggest obstacle to our rejoining. The snobbish elitism of our home institution makes me wonder if we could palate a partnership of equals with our neighbours. After all, Dundee is 31st in the UK and Abertay a very distant 103rd: one hundred places down from our own. Yet to focus myopically on league tables would be foolish – and perhaps fatalistic.

We are, after all, fiscally at sea and in urgent need of a life raft. Academic and cultural benefits aside, under the aegis of a consolidated entity we would have the necessary strength for ambitious, large-scale borrowing. By taking advantage of economies of scale, we could borrow enough not just to solve today’s problems, but to realise tomorrow’s possibilities – at a rate of interest sufficiently low to make this option not just possible but indeed favourable to our current options.

Amidst the international crisis, and in this St Andrean one too, I have been reminded of the musings of Margaret Mead. When asked what the first sign of civilisation was, the anthropologist spoke not of the vanity of dusty old pots or crude cave drawings, but ‘a healed femur.’ Then, as now, it is in this irrational symbiosis of unity and survivalism that we transcend animalism and become, for want of a better word, human. Then, as now, we must realise that this unity is survivalism—that our strength is in our numbers. It is in this spirit that I envision the potential of federalisation: of strength not just in the inky digits of a bigger balance sheet, but in the vibrant and variegated expansion of our academic family.

A federalised university is a big ask. There are issues abound, not least the willingness of key stakeholders. But we wouldn’t be the first, or the largest, institution to do it. University College London operates with 17 member institutions and a combined student body of over 220,000. If you haven’t heard of it, you have at least heard of its members: London School of Economics and University College London are just two of these; both ranked in the Complete University Guide’s top 10. There needn’t, therefore, be a trade-off between success and isolation. Our colleagues would not pull us down but lift us up – it is, as the phrase goes, teamwork which makes the dream work.

Perhaps this is all just wishful thinking on my part. I am a romantic at heart and, like cupid, I aim my bow gleefully at this partnership (it is perhaps a sign of the times that there are three in this marriage!). Yet to see it so simply would be to neglect the true stickiness of our situation. Needs must when the devil drives and we are undoubtedly at a crunch point. One way or the other, a huge, gear-changing decision must be taken.

Federalisation will not be the path of least resistance. The most ambitious ideas rarely are. Yet with federalisation, Professor Mapstone must realise the golden opportunity she has to reinvent our six-centuries-old institution; to take make from our fiscal deficit not just financial wealth, but an intellectual surplus in which we can all be enriched. ‘St Andrews is world-leading’ she says, to which I now retort: prove it! Ever to excel should not just be a motto but an intellectual call to arms. We must realise, before it is too late, that to excel is to be exceptional; that to be exceptional is to go where others will not.

If instead we do end up flogging off yesterday to save tomorrow, may I suggest we begin with the Principal’s residence? With her pay cut, Professor Mapstone proved she’s in for a penny. She may as well be in for a pound.