The University of Twente's University Council (UC) is discussing the draft budget for 2024 with the Executive Board today. The UC has the right of consent on the main points of the budget. We want to update you on the outlines of the budget and the follow-up process.
In recent months, the Executive Board and the faculties, service departments and institutes have worked on the UT budget for 2024, with an outlook till 2028. This was no easy task, given the financial developments, both internal and external. The situation calls for making tough choices in what we want to build on and what we are going to give less or no priority to.
The financial discussion is a subject of discussion within our community, which is understandable as it may affect them. Sometimes, measures will have to be taken that may be painful but necessary in the current situation. We understand very well that the current situation may bring uncertainty, and know that for some, other developments also play a role in their feelings, such as the national elections. We published a statement about this matter last week. If you have any concerns, do discuss them in your team, with your supervisor, or with your unit's HR department.
Financial framework
We have previously published a news item about the current situation. The increased costs due to inflation make it more difficult, even with a constant budget, to continue to achieve the same. Following the decreased intake of students in the current year, we will revise the forecast for intake in the coming years. This also has financial implications.
At the same time, there are several uncertain factors for the near future: think of the debate on the internationalisation of higher education, but also last week's national elections and subsequent government plans that may affect university funding. These factors make a conservative course necessary to maintain a sustainable and financially healthy organisation.
The total budget of the University of Twente in 2024 is €513 million. Most of this, over sixty per cent, comes from the central government. This is the so-called 'first flow of funds' and consists primarily of direct funding for education and research.
Towards a positive result
In 2022, UT spent and invested more than it received in funding. This was a conscious choice, as a number of investments were necessary with a view to the future. We also budgeted for a deficit in 2023, where we now see that the operational result may not be as good as budgeted and expected. This makes adjustments necessary.
We aim for a positive result in the coming years, but will not achieve this in one year. The budget for 2024 still aims for a negative result of (at most) two per cent of the first flow of funds. In 2025, that deficit may be a maximum of one per cent. And in 2026, we want income and expenditure to be fully balanced. After that, we will have to realise positive results again to replenish equity to the level required for a financially healthy and resilient organisation.
We have already set the course towards a long-term positive result this year. We are doing this initially with measures and choices that will have an effect in the short term. These have already been jointly drawn up earlier with and by the units. We are also working together on ideas and adjustments, which should have an effect in 2025 and beyond.
Setting priorities
We make policy choices for the coming years around three priorities:
Measures being taken
The financial issue calls for short-term choices and measures. In doing so, we are building on the choices we have already made for this year.
Staff costs are UT's most significant expenditure: about 70 per cent of expenditure is on staff. This also means that if savings opportunities need to be found, we need to look at staff costs. The method of stringent consideration when filling vacancies and extending contracts, which we communicated earlier, will continue to be in place in 2024.
The number of staff will decrease slightly in the coming years, with an explicit focus on a good balance between academic and support staff, appropriate to the student intake and funding we receive.
We recently drew up the Annual Long-Term Strategic Housing Plan (LTSH) and shared it with the University Council. Investments in this have been reduced substantially. The focus is on investing in existing teaching and research facilities and making them more sustainable. You can read more about the choices we are proposing in the recent news item about this.
In the coming period, we will remain critical of the expenditures we make, and we ask everyone to think along with us. For instance, whether hiring is necessary for a task or project, or when choosing the most efficient and effective solution. We do this at the level of the entire UT, but it should also be done in the various units and departments.
What will you notice?
UT's financial situation affects our daily work. Sometimes UT-wide, for example, in service levels for specific services. But choices can also have an effect at the level of specific service departments, faculties or scientific institutes. Where necessary, they will inform you further about the choices and consequences. Some plans still need further elaboration and will take shape in the coming weeks and months.
We understand very well that the changes may bring uncertainty. It is important to discuss concerns, either in your team, with your manager, or with your unit's HR department.
Joint challenge and new ideas for a healthy financial perspective
In recent months, many people within the organisation have been working hard on a healthy financial perspective for 2024 and beyond. Departments and faculties have worked closely together to share the pain of the choices to be made in an appropriate way. The fact that the various units collaborated on this and achieved results gives a lot of confidence for the follow-up process.
Besides direct choices for the coming budget, many good and inspiring ideas have been put forward that can help us further make the right choices in the coming years, both from a substantive and financial point of view. We will further develop and implement these ideas, together with many stakeholders within the organisation. You will be kept informed about this through various channels.
Follow-up process for adopting the budget
Today's University Council discussion is an (internal) committee meeting. This meeting takes place in preparation for the UC's plenary meeting with the Executive Board on 13 December.
Besides the consent of the UC, approval of the Supervisory Board (RvT) is also required. The RvT discusses the budget on 21 December. After approval by the RvT, the budget can finally be adopted by the Executive Board.
