Explanatory Letter to All Staff – The Missing Link

RUCU (representing grades 6 and above in collective consultation) is the recognised trade union that can come to agreement with the University in relation to the proposed cuts. We are concerned there have been serious breaches of process within RUCU, that undermine democracy because they present members with misleading, incorrect and incomplete information on which to base democratic decisions. We present some such recent breaches, in good faith in the expectation that their exposure will allow the serious democratic deficit to be rectified

Dear RUCU members,

We are in the midst of a complex consultation that will have a momentous impact on our University, and on us as staff and students.

At the same time as posing as ‘reasonable’ and ‘responsible’, University of Reading management have adopted an unprecedentedly aggressive, and so far unrivalled, approach, including public threats of potential redundancies at a time when staff are working hard on developing new programmes and teaching strategies to deal with the current situation. The s188 consultation letter included proposals for consultation on dismissal by reason of redundancy of all 4583 staff and re-employment on new contracts, on reduced terms and conditions.  For more details on the circumstances surrounding the current negotiations see Background to current negotiations (below).

The University management’s case for cuts is based on a model in which, for the next three years, not only do 50% of new international students fail to turn up, but also 50% of continuing international students do not continue. There is no modelling of deferring students. The pre-Covid predictions for recruitment of new international students are vastly inflated compared to previous years’ actual numbers with no explanation. These and similar issues for home students mean predicted losses are being overestimated by around £50 million. For more details on alternative calculations of losses see Calculation of losses (below) and full details in the Appendix (below).

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An alternative negotiation Strategy

The paper provided to members (from the Regional Officer) dated 16/07/20 proposes a “Jobs First” approach to the negotiations. Given the serious concerns about the University’s modelling and the fact that actual student numbers will be available soon, this is premature and creates risks that changes to pay, terms and conditions will be negotiated and accepted on false premises.

Instead we propose a “Defend All Jobs, No Detriment!” position in line with UCU’s ‘Fund the Future’ guidance (see Appendix 2) which allows us to push back on the University position more effectively while still continuing negotiation to explore viable options, for example:

a. the possibility of bridge loans and other facilities such as restructuring the University’s loans and short-term credit facilities;

b. structuring any help given by staff as a loan, repayable after the current liquidity crisis, under terms of improved staff control over governance that caused the liquidity crisis. Note: these changes are not the result of Covid-19 alone; indeed the University has admitted that it is trying to address ongoing structural issues with University finances;

c. funds made available from BEIS and UKRI.

Background to current negotiations

1. The consultation (s188) letter starkly states that: 

a. “…it is proposed to make temporary changes to contracts of employment in respect of all employees of the University located in the United Kingdom (and predominantly based at our campuses in Reading and Henley-on-Thames).

2. These changes may include a pay freeze (for up to 3 years), a temporary reduction in the hours of employment for all staff, for example by adopting a four-day work week, or some combination of these and other alternative options to be discussed with you.

3. If appropriate changes cannot be agreed via consultation, the University may make these changes to contracts by giving contractual notice to bring employment on the current terms and conditions to an end, but offering continued employment on new contracts which contain the temporary changes to terms and conditions.”

4. The threat is to pay, progression, equality, and importantly pensions and retirement security.

5. It is important to note here that this kind of vicious threat is unprecedented in our sector[1]. UoR is consequently a standard-bearer in the poorest and most aggressive of employment practices, and any attempts we make to resist these changes are of national importance for our union.

6. It is also worth noting that no compulsory redundancies can take place until the separate s188 consultation on that matter has been completed. That consultation (the concept is itself undermined by management as relayed in point 3 above) only commences in Oct 2020 and will likely last a further 45 days before actions can be taken.  

7. Finally, it is worth noting that we are all currently hampered by a lack of reliable data on actual numbers of both new and returning student. Current figures of student enrolment show that the student uptake is very healthy. By October 2020, we will have a clearer picture of this, although the uncertainty associated with the pandemic remains.

8. The immediate threat is to pay, terms and conditions. The Vice-Chancellor has communicated his version of the need for changes widely in several public meetings with staff, and has been at pains to emphasise that these cuts and any redundancies are not his preferred option, but that Council, UEB and he have no other alternative to address the £106m deficit. While the effect of the Covid-19 pandemic is the ostensible reason for the cuts cited in the s188 letter, the Vice-Chancellor in public talks and in consultation meetings with the union has noted the more structural financial issues the University has accumulated over the years. These are presented as historical issues, that would have been dealt with differently by the current VC.

9. Agreeing to proposals for pay freezes and pay cuts will lead to UoR leaving National Pay Bargaining (JNCHES), which also would include leaving the UCU’s ‘Four Fights’ negotiations (which includes USS pensions, workload, Equality and Pay) which also are held through JNCHES. UoR would not necessarily leave JNCHES if a pay freeze is agreed in National Pay Bargaining also or if the UoR implements cuts to working hours (i.e. a four day week or a nine day fortnight) instead of pay cuts and pay freeze as such. If JNCHES were to be exited, it is not clear how or when it could be rejoined.

Calculation of losses

  1. The University has cloaked the consultation process in a veneer of transparency and reason. It has encouraged staff to accept the proposed cuts to pay, terms and conditions in order to protect the University and stave off compulsory redundancies on the grounds that there is no other viable alternative given the University’s financial position.
  1. However, during the consultation process, it has come to light that the original documentation provided by the University, is both flawed and intentionally misleading. Analysis prepared by Deepa (see the Appendix) and made available on 7th July 2020 sets out how the University has overestimated losses from student income by approximately £50m. What is worrying is that the difference of £50m does not arise from a difference in the breadth of assumptions.
  1. The Appendix outlines how :

“Firstly, the University’s calculations are inconsistent with their own assumptions about future student numbers, making their expected losses appear much greater than they are likely to be, by approximately £25 million.

Secondly, their own assumptions seem extreme, because they assume a 50% decline in 2021-22, and 2022-23 for international UG students for example. This overstates their losses by as much as an additional £25 million.

Taken together, the University estimate of losses is as much as £50 million greater than corrected and more realistic estimates suggest. Making these corrections to ensure the University’s stated assumptions match the modelling and that these assumptions are also realistic, means that the losses would not be £106 million[2], as predicted by the University. They would be closer to £56 million.”

  1. This undermines the consultation process at its very foundation. These matters are non-trivial and the University’s case for cuts has been premised on misleading numbers that were wrongly approved by UEB and Council.
  1. Reliable and meaningful modelling is only helpful in planning for the future when it is based on sound data and design, reasonable assumptions, use of the right mathematical and statistical techniques, correct interpretation of results and so on. Instead we see the use of incorrect input data, coupled with wildly speculative assumptions, that provides results that are pre-destined to justify the University’s pathway of cuts.
  1. Such non-trivial and indeed highly serious factual misstatements must not be brushed under the carpet, as they provide a concrete indication of managerial bias towards a magical deficit number of £106 million. Such conduct calls into question the meaningfulness of the entire consultation process. 
  1. Further to the challenge provided by Deepa’s letter, and responding to a prior request by Council to do a “light-touch review” of the modelling in the light of new data, the Vice-Chancellor has issued a second document. This second document is more internally consistent, but the modelling still does not correct the range of issues identified. Having corrected what is deemed a minor update to numbers of £18m, it then introduces other large amounts (for example a further 10 million on speculative estimates pensions contributions increases from Apr 2021), that allow the University to take the figure back to a total of £104m.
  1. The issues detailed above, are only the tip of the iceberg.  We believe that there are serious concerns in relation to the vast inflation in planned student numbers in 2020-21, that magnify losses, because they show a scale of losses that is not based in fact. The planned intake in UG international students for example has been increased by 200% over last year’s numbers. Increasing planned student numbers aggressively – say hypothetically by a million new students, would naturally show a loss when only half a million turn up.
  1. The University’s case for cuts is both un-evidenced and hugely premature, given there is much uncertainty about actual student numbers. The strategy being pushed by the University, which encourages us to take cuts to our pay, terms and conditions, in order to save the University and our colleagues’ jobs, must be recognised for what it is, and must be strongly resisted.

APPENDIX

(Document dated 07/07/20)

Paper (part 1) prepared in an individual capacity by Deepa Govindarajan Driver, ReadingUCU

Having examined how the modelling assumptions are being carried through the financial modelling of losses in the University’s paper to Senate, UCU, and Council, I would like to bring to the attention of the consultation group (including representatives from UEB, Senate, Council, Staff Forum and UCU) serious and material concerns.

My analysis – which has been shared with the RUCU branch committee, who share these concerns – suggests that there are issues in relation to the modelling that has been presented by UEB to Senate and approved by Council. These issues mean that the University’s current presentation of expected losses provides a misleading picture such that it grossly overestimates (nearly doubles) the losses.

I offer this contribution to the University and to the Consultation group in good faith, as a concerned UCU member of the Consultation group and look forward to an urgent, written response from the University to clarify their modelling. A further document will also be made available to the Consultation group and will take account of further concerns and queries UCU may have.

Key points

●  There are two main issues that I find with regard to the modelling that underpins UEB’s proposal and Council’s decision to kick off a s188 consultation process regarding wide-ranging cuts to staff numbers and freezes to pay, terms and conditions

  • Firstly, the University’s calculations are inconsistent with their own assumptions about future student numbers, making their expected losses appear much greater than they are likely to be, by approximately £25 million.
  • Secondly, their own assumptions seem extreme, because they assume a 50% decline in 2021-22, and 2022-23 for international UG students for example. This overstates their losses by as much as an additional £25 million.

●  Taken together, the University estimate of losses is as much as £50 million greater than corrected and more realistic estimates suggest. Making these corrections to ensure the University’s stated assumptions match the modelling and that these assumptions are also realistic, means that the losses would not be £106 million[3], as predicted by the University. They would be closer to £56 million.

●  The discovery of these serious and material overestimations of losses, in my view, reinforces the UCU argument that the solution to the current financial problems faced by the University should be based around cash-flow ideas and the rearrangement of working capital, rather than job cuts or pay / terms and conditions decreases.

●  That such an error had not already been corrected and that such a model was reviewed by UEB, presented to Senate and approved by Council, using erroneous modelling on a matter of such seriousness, to me, raises questions regarding the governance and oversight around the modelling.

●  It also rings alarm bells about the reliability of any models provided by the University in good faith negotiations. An error of this magnitude, if not corrected, would significantly alter the focus of discussions and would, if relied upon, have resulted in the loss of several hundred jobs, reductions in terms and conditions, and corresponding lifelong impacts on staff, students, University and the community, without due cause.

●  An error of this magnitude also suggests to me that the governance of the University requires critical scrutiny and repair to prevent recurrence.

A worked example explaining issues with assumptions in calculating fee losses from reductions in international UG Students (area of largest overstatement)

●  The University has declared the following assumptions for the decrease in international UG and PGR students:

 2020-212021-222022-23
First year students-50%0%0%
Second year students-50%-50%0%
Third year students-50%-50%-50%

●  However, the University’s calculations appear to ignore the University’s own assumptions.

●  The calculations produced for Senate in the paper cited above, are based on assuming that the reductions in international UG student numbers of 50% are the same for each cohort in 2020-21, 2021-22 and 2022-23. This means that the University’s assumptions in practice (as opposed to their description of the assumptions) is:

 2020-212021-222022-23
First year students-50%-50%-50%
Second year students-50%-50%-50%
Third year students-50%-50%-50%

●  This can be seen through a fee loss figure for UG international of circa £17.069 million in 2021-22 and £17.496 million in 2022-23 in the papers provided to Senate and Council.

●  These figures should be much lower as such an adverse scenario (that actually modelled rather than that described), seems highly unlikely. It seems almost certain that reductions in future years will be much less, perhaps even zero. The London Economics analysis for UCU for example pointed out that expected decreases in numbers of overseas students are mostly temporary as students would like to defer their study in the UK, not cancel it entirely.

●  It may well be that a more realistic prediction for the next 3 years could actually be closer to the following table, with second and third year students carrying on as normal.

 2020-212021-222022-23
First year students-50%0%0%
Second year students0%-50%0%
Third year students0%0%-50%

●  Similar errors also apply to the calculations for domestic students and post graduate research students.

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Assumptions re: fees and numbers:

●  Assuming £9250/- per year fees for home/EU UG students, assuming £18000/- per year for all overseas students (UG, PGT and PGR), assuming £8250/- PGT home/EU and assuming £4500/- for PGR. These assumptions were verified using the table headed Total Headcount (same paper) for 2020-21 and multiplying them took me to £93mn and thereafter with other costs to £106mn

Dr Deepa Govindarajan Driver, Reading UCU


[1] University of Liverpool in a previous year, tried to pose a similar threat for all professional and administrative staff (not the entirety of the University), and were rightly forced by union action to withdraw their plans.

[2] The University’s own estimate of student fee losses is £93 million. They also estimate an additional £13 million loss in non-fee revenues. Together these losses total £106 million

[3] The University’s own estimate of student fee losses is £93 million. They also estimate an additional £13 million loss in non-fee revenues. Together these losses total £106 million