Universities (Hansard, 15 February 1982)

§ Sir Keith Joseph [pursuant to the answer, 8 February 1982, c. 294]

I wrote the following letter:

12 February 1982

"Dear Mr. Sapper, Thank you for your letter of 28 January about our expenditure plans for the universities. The Government's expenditure plans will result in significant savings on the universities—of the order of £150m a year, every year from 1984–85 onwards. On the basis of your own figures we shall be spending about£100m on academic redundancies, and a smaller sum on non-academic redundancies and other restructuring costs as the once-for-all cost of this very significant annual level of saving. From the point of view of public expenditure that is a very respectable balance. But the calculations enclosed with your letter suggest that if the period of transition were extended from three years to five the same long-term savings could be achieved without redundancies and with no increase in public expenditure over the five year period by allowing more time for natural wastage to bring about the necessary reductions in the number of posts. Your calculations, however, assume that virtually all natural wastage can contribute to the necessary saving—ie that all posts that fall vacant can be frozen—or that any necessary replacement can be achieved by redeployment. But a significant proportion of posts that fall vacant will be in key areas that have to be filled. Your proposal for a national redeployment scheme is not likely to help because staff are least likely to be available for redeployment in areas where natural wastage is greatest. Your proposals would therefore have the effect of ruling out any possibility of a planned restructuring exercise in individual universities. The university system for the rest of the decade and beyond would simply be the random consequence of individual retirements and resignations. I cannot regard this as an acceptable alternative to what is currently proposed, where, as you know, we have given the UGC discretion to allow individual universities more time to reach their lower level of funding where this seems sensible in the light of their particular circumstances and academic plans. Your calculations are, in any case, concerned solely with savings in academic salaries. But universities are being required to make significantly savings in non-academic salaries and other costs and a proportion of these savings will depend upon the reduction in academic posts. If, as you propose, staff are reduced in a totally random fashion it will not be possible for these savings to be achieved. The UGC's estimate of the total number of posts to be lost is what it is only because a relatively high level of savings in associated costs is also assumed. This means that the costs of keeping staff on in order to avoid redundancies is also greater than you have assumed because more than salaries alone is involved. Once account is taken of this the already fine balance of your calculations comes down against the argument which you advance. But it is not my present purpose to bandy figures with you. All such calculations are inevitably based on essentially unverifiable assumptions, and endless permutations are possible. My central point is that the choice you are offering is between a random, uncontrolled reduction in university staff over a longer period from the effects of which it would take many years to recover and a reorganisation over a shorter period which, 57W although faster and tougher than universities would like, it is still within their power to structure and control. That being so, I am afraid that I do not think any useful purpose would be served by the meeting you propose. Finally, I should tell you that in response to a Question recently tabled by Mrs. Renee Should tell you that in response to a Question recently tabled by Mrs. Renee Short in the light of press reports of your letter to me, I shall be arranging for my reply to be published in the Official Report of the House of Commons.