Why Size and Shape is important

Read about what we need to do and, therefore, why this work matters.

In 2018, when we launched our strategy Sussex 2025 to become a better university for a better world, the world was a very different place.

A lot has changed since then. We are operating in a more volatile and competitive environment than in decades – and it’s unlikely to change soon. Student fees have been frozen and may soon reduce, plus pensions and pay costs are rising. Since the pandemic the demand from international students has fallen.

So, we need to be in the best position possible to make sure we can thrive in a significantly changing environment.

We need to focus on Sussex 2025 and achieve our vision - we need it more than ever before.

Making Sussex 2025 a reality

First, and most importantly, the Size and Shape programme will help us to achieve our Sussex 2025 strategy. This remains our guiding vision for the next four years. It will help us to once again become a top-25 university that is internationally minded and a beacon for sustainability.

To achieve the Sussex 2025 vision, we need to deliver:

an exceptional student experience and student outcomes.
research excellence and impact in a number of specific areas.
an excellent Estates and IT infrastructure that enables success.

By doing this we will:

improve our NSS scores
move up the University league tables
be more competitive in the UK and internationally
increase our research funding

Our academic vision

To enable us to deliver these ambitions, we’ve developed an academic vision. This sets out the key principles we must follow if we are to reach our goals.

In its purest form, our academic vision is about two things: investing in excellence and addressing cross-subsidy.

Investing in excellence

At the heart of our academic vision is a commitment to investing in excellence. This means refocusing investment and efforts on areas where we are already, or have the capacity to become, externally recognised for the excellence of our research, scholarship and education.

Excellence is not just generating income but achieving high levels of student satisfaction, employability and research impact. We need to invest in our physical and digital environment to allow the space for this excellence to happen.

Investing in these areas will mean we can improve our NSS scores, move up the university league tables, be more competitive in the UK and internationally and increase our research funding.

Addressing cross subsidy

To invest in excellence, we must revisit our appetite for cross subsidy. Traditionally, we have invested when areas have grown but have not reduced in turn our investment in areas that have contracted.

This limits the resource available to invest in areas where we excel or have the potential to do so.

Cross subsidy is important across academic disciplines, but its future must be framed around investing in successful academic areas that require some level of support to continue their excellence.

Understanding cross subsidy

As the main source of income for the University, Schools need to bring in more money than they spend in order that the University as a whole can generate funds for reinvestment.

Other than borrowing, this is the only way that the University can invest in people and infrastructure, as well as providing a vital buffer against adverse events.

In an ideal world, each School would be able to set aside similar sums. In practice, some Schools, with mainly classroom-based teaching and high proportions of international fee-paying students, have been able to produce a higher level of return.

Conversely, other Schools tend to have high infrastructure costs, research which does not return its full economic costs, and lower proportions of international fee-paying students.

This means, across the University, some Schools benefit from the financial performance of other Schools. This is called cross-subsidy.

The University is not opposed in principle to cross subsidy. If cross subsidy was too low or did not occur at all, we would not be able to fund some vital, yet expensive, education and research. It is important however that, where lower returns are produced, those Schools are producing teaching and research that is truly excellent.

Likewise, it is important that we can reward expanding and successful areas. If levels of cross subsidy are too high, this makes it hard for excellent and promising areas to thrive and be the best they can.

This is a balancing act that Size and Shape is trying to address.

Making prudent financial decisions

Without money to invest, it will be impossible to achieve our academic vision and Sussex 2025. Finance is the fuel that allows us to reach our destination - it is not itself the destination.

Around two thirds of our income is from teaching and nearly all of this is from student fees. We spend the vast majority of this and our other income on the University’s core activities. Like any well-run non-profit organisation, we aim to set aside a small amount of our income each year to reinvest in our physical and digital environment so that we can continue to be an attractive place to study and work.

In accounting terms, these are referred to as surpluses but they could be more accurately thought about as funds for reinvestment.

The need to generate funds for reinvestment is seen by some as an obstruction, something that gets in the way of our core academic mission. Actually, funds for reinvestment enable all University activities to take place. They enable us to move in new directions, bring on board the technologies we need, invest in existing and emerging areas of excellence, reward staff, improve our campus, absorb shocks, pursue opportunities and attract funding.

Whilst we have cash balances, these have been raised from lenders and generated from our past activity in order to carry out the capital and infrastructure investments which are so important to maintaining and developing our infrastructure so that we remain an attractive destination for staff and students. Council has reflected the financial pressures on the University by reducing expectations about the level of funds for reinvestment over the next few years. These represent a minimum level of performance which is required to make sure we can make essential upgrades.

When we were targeting larger funds for reinvestment, we were doing so to enable us to make much-needed upgrades to our physical and digital environment worth £300m (down from an original wish list of £1bn). However, due to the fact that we are now targeting smaller funds for reinvestment, our new target will mean we need to reduce the planned upgrades by £80m – and the University community will need to agree the way forward.

This is sustainable only in the short-term. Continued under-investment will see us fall further behind and enter a downward spiral of waning student satisfaction, lower league table positions, declining applications and, ultimately, a smaller University with even less money to invest.

We urgently need to reverse this trend - not instead of pursuing our academic vision, but because of it.

If we don’t act now our position will weaken:

We will fall further down the rankings
Our student satisfaction levels will get worse
Our Estates and IT will deteriorate further
We will lose research funding
We will become a less attractive place to work and study
We will become a smaller University

The Size and Shape programme will enable us to move away from avoiding these threats and towards pursuing opportunities.