The Erasmus University is heading towards a structural deficit of €13 million annually. Starting end of 2014, measures will be taken to prevent this deficit. Board member Bart Straatman, responsible for finances, sheds light on the interventions. “It is deflated, and we have to intervene now.”
text Wieneke Gunneweg photo Michelle Muus
The reason for the looming deficit?
“The reason is the declining number of students in the near future, that causes a structurally lower income, and the budget cuts by the national government. In total, the government income lowers structurally with €15 million. Additionally, there’s the issue that the university has to bring overhead cost down; they are significantly higher than the national average which the university agreed upon with the government in the performance agreements. In other words: this university has much more support staff than other universities, because we have since long been organised relatively decentrally.”
The university has recently spent much money on the new campus. Is that an additional cause of the deficit?
“We could afford it and the renovation has to continue as well. The choices have always been made responsibly. The university until recently used to have very low housing cost, but mainly because the buildings were very much neglected. The remaining planned renovations are really necessary, mostly to remain attractive as a university for new students. The installations of the University Library, for example, are really at their end, and replacing them just costs money. Other buildings need to be renovated as well. And new buildings are necessary as well in order to meet demand for small education rooms which is so large because of small-scale education and study spots. Simultaneously, we reduce the number of square meters in office space, and we can demolish a number of buildings in order to lower housing costs.”
On what will the €13 million be cut?
“It’s not only cuts; we also plan to earn an extra €2 million annually by getting additional research funding and master students. Mind that the university only retains 10 percent of every earned euro.”
That would leave €11 million.
“That consists of 6 million cuts on support and 5 million of cuts on the faculties, on research and education. In total, I expect around 110 FTE to disappear in support staff. The good news is that the university has a savings account so we don’t need to panic and we can implement the adjustments carefully. We try to do that as much via natural course and a vacancy stop. And we have room to afford a solid social policy for people who will lose their job after all; we can put a lot of energy in helping people transition from job to job.”
Where can you make cuts?
“Regarding the support staff BV2013 has taken care that we have the basis of our organisation in order, which leads to greater efficiency. These savings have been ascertained at the start of BV2013 – in 2010. With the implementation of SAP, for example, 12 FTE will be won in Human Resource & Finance. Among other things, fewer employees are needed because employees manage their days off and declarations by themselves. In total, by the end of 2015, the general support staff has to be reduced by 60 FTE to meet the performance agreements with the secretary.
In the research and education support staff this means a reduction of 50 FTE by the end of 2016. A number of faculties are preparing a plan for the reorganisation already. The precise direction will be made clear in the coming months. Around summer the decisions about that will be made. In the education administration for example, 18 FTE will be won due to the implementation of the Student Information System (SIS).”
Can you rule out forced layoffs?
“No, unfortunately, I cannot. Of the 800 FTE in support staff on the entire university, around 12 to 13 percent needs to disappear. Although there are organisations which need to lay off up to 30 percent of their personnel, I certainly don’t want to belittle this intervention. There is a significant effort at play here, one I know will hit people hard.
“In addition, I expect a significant amount of leaves by natural course in the coming years; so in removing positions we will look carefully at who will retire when. In practice the amount of forcibly laid off FTE will hopefully turn out to be as low as possible.”
When will employees start to notice interventions?
“The period in which we want to solve the deficit ends in 2017. Before summer. The budget cut interventions have to be clear and starting the second half of 2014, the first interventions will be in force.”