What do we mean by 'value for money' in HE

Posted by Mat Kirby on April 23, 2019

The theme for the recent BUFDG Annual Conference (a conference held by the British Universities Finance Directors Group), was "Beyond Money". Going beyond the financial balancing act that comes with running a university, to focus more on the different aspects of 'value', albeit from the perspective of a Finance Director of a higher education institution.

Tribal's financial benchmarking colleagues were amongst the conference delegation, here's what they found valuable when thinking about value for money…

Small is mighty when it comes to value

One of the key takeaways from the event was that those who ignore the smaller details do so at their peril.  In his workshop about value, Simon Perks, Director of Sockmonkey Consulting, explained that it's the little things that make a big impact on a student's experience. Quality teaching and learning is a given, but charging students £20 for a graduation gown, asking them to pay for trips or charging them £5 for an overdue library book, often leaves students with a feeling of being ripped off, and the value begins to diminish. 

Value is in the eye of the valuer

Value for money is different to every stakeholder in the institution. Staff, students, and the local community will all have a different perception of what this means for them and probably a misconceived perception of what this means to others. Universities need to create a careful balance, where their operating position reflects an overlapping perception of value. But that is a challenge.

Noel Tagoe, Executive Vice President of Management Accounting, Research and Curricula at the Association of International Certified Professional Accountants, talked about value for money with a football analogy. As keen football fans, Tribal’s benchmarking colleagues reflected on this from the angle of perspective. A team's Board wants value for money from its next signing, perhaps a low cost, high performer or a well-known star that may be expensive, but will bring in the fans; the manager's objective is to win each game with no injury; and the football fan, as a customer of the game, wants to win but also wants a great experience within the 90 minute match. The point being, that every game of football is seen from differing perspectives, so how can the value be determined by only one set of measures and deemed value for money or not? Universities need to work on improving the perception of value for money to all their stakeholders, at the same time.

"A team's Board wants value for money from its next signing, perhaps a low cost, high performer or a well-known star that may be expensive, but will bring in the fans"

But what is the value of an education? How do you define it and encourage the politics and ecosystems around value? Before you can start to measure these things you need to define what you're trying to measure. Value has to be at the heart of all business models.

Tribal's i-graduate student barometer analysis asks the right questions to students, helping universities to understand what their students are telling them. Tribal's financial benchmarking analysis looks at a university’s cost base; and the PSQS (professional services quality survey) considers the staff's opinion on the effectiveness of the services the university is providing. Overlapping the student, staff, and financial data sets, provides a picture that encompasses the multiple and varying views of the different stakeholders and identifies areas universities may want to focus on, for example high cost, low satisfaction areas would be an urgent priority to look at. Incidentally, Tribal's benchmarking analysis shows the cost of graduation in its benchmarking figures. We measure things like library fines and the cost of trips and know that some universities are stopping this now as they have the technical capabilities to track better, communicate more and manage more efficiently.

Power hour

In the event's 'Power Hour' (think speed-date style quick meetings), our staff spoke to nine different universities, all wanting to talk benchmarking.  For many, understanding their financial data is high up on their radar because of the value for money agenda. You can find out more about Tribal's benchmarking, here.

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Less income, higher costs - without affecting value?

Katie Normington, from Royal Holloway, University of London, spoke about the proposed new student fees of £7,500 (rather than the current £9,250 income generated per year for an undergraduate student). The proposal, due to be released from the AUGAR report, suggests the Government may reduce the fees to £7,500 as a way of offering a more equal balance between academic study and technical education, ensuring there is genuine choice for young people and giving employers access to a highly skilled workforce.

The report also aims to look at value for money: looking at how students and graduates contribute to the cost of their studies, to ensure funding arrangements across post-18 education in the future are transparent and do not stop people from accessing higher education or training.

Universities have also just been hit hard with pension contribution increases, (bills as high as £2.5million at one University), this is a figure coming straight off the bottom line and that's before the proposed cut of student fees. A reduction in income and an increase in cost, never sounds great. But universities are resilient, they’ve always come through tough times in the past, and are likely to now. Tribal has worked with over 50% of universities in the UK, the fact they continually look to improve, grow and inspire our great nation is something to remain proud of. Now, as they have before, universities are going to need to look at their cost base and true value for money both in terms of perception and in restriction of expenditure, if they are to overcome the tough times that potentially lie ahead.

"Tribal has worked with over 50% of universities in the UK, the fact they continually look to improve, grow and inspire our great nation is something to remain proud of."

Investing in hearts and minds

So, the BUFDG conference was all about what matters to HE Finance Directors, but, for a moment, let's look at more than money - investing in hearts and minds.

Adrian Johnstone, a Professor at Royal Holloway, University of London, talked about developing IT structures and information flows, AI, the importance of research and how it can impact teaching. He spoke passionately about wanting to inspire the student of today very early on in their academic life, to guide them, help nurture them and develop their 'beginners mind'. If students are at the heart of learning, the value of education is more than monetary.

The guest speaker at the conference gala dinner Bobby Seagull, a former contestant on University Challenge, TV star and maths school teacher, regaled the delegates with his life story and how he got to be so bright. He wanted to challenge the perception that you're either born with a 'maths brain' or not. He told delegates of his current research project at the University of Oxford and how he was looking into the science of the way we learn. His method is to inspire students through empowerment, and he alluded to his spell in the limelight as a platform for inspiring kids to get involved in maths.

Adding value today

If you take five key points from this, it’s these:

  1. Understand value from different perspectives.
  2. Make decisions around value on fact, not perception.
  3. Analyse your resources and optimise them!
  4. Prepare for the potentially tough times ahead
  5. Always remember your students are your consumer - treasure them, measure them.

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