How we have provided Value for Money to Students
The question of what is ‘Value for Money’ in the context of higher education is open to interpretation. For many years demonstrating value for money was associated with universities demonstrating how they managed public funds through efficient and effective financial strategies.
The introduction of £9,000 fees following the 2012 Browne Review fundamentally changed the relationship between the student and their institution. The question of value from a student perspective shifted to what value students derived from their investment in higher education. Students increasingly want to know where their money is going, the quality of the product they will receive and what they should expect in return.
With the introduction of higher tuition fees there has also been an increasing expectation that universities address the value of HE to taxpayers who subsidise the student loan system and, through the OfS Teaching Grants, make direct contributions to some institutions. The Government expects that only about 25% of current full-time undergraduates will repay their loans in full.
Section 69 of HERA (Higher Education and Research Act 2017) gave the OfS a duty to have regard to the need to promote value for money in the provision of higher education by English higher education providers. This enables the OfS to conduct efficiency and effectiveness studies in the management or operations of a registered provider.
AECC continues to grow with total income in 2022-23 increasing by 19.4% over the previous year, from £12.4m to £14.8m. This means that we have now grown in excess of 60% during the 4 years since 2018-19, despite the considerable disruption caused as a result of the Covid pandemic during that period.
The operating surplus for the 2022-23 year was lower than in the last two years at £811k, but still means that we were able to fund our annual capital expenditure investments from this year’s activities, enabling us to retain a healthy cash balance, which at the end of July 2023 was £7.25m, only £45k down on the same time last year. This healthy cash position, together with a lack of borrowings, means that we are in a good position to continue with our ambitious plans to invest in the organisation going forward.
This healthy growth in the year was primarily due to the ongoing strategy to diversify from our core Chiropractic activity. The Integrated Rehabilitation Centre was opened in November 2022 and income from this new facility has grown steadily over the year, and is anticipated to continue to increase over the next few years as we introduce new clinical services.
We also launched 4 new MSc pre-registration courses in allied health disciplines in January 2023. Recruitment for this first year has been modest, with the exception of Speech & Language Therapy, which recruited better than anticipated. However, as these are two-year full-time courses, there will be a second cohort starting in January 2024, and currently indications are that recruitment will exceed the January 2023 intake. This increase in student numbers will mean that we can spread the cost of running the course more effectively giving better value for money.
We also expanded our Continued Professional Development provision during the year and are now able to offer PG Cert courses in First Contact Practice and Health Sciences Education and, following our successful application to be admitted onto the Register of Apprentice Training Providers, have started an MSc in Advanced Clinical Practice as a degree apprenticeship. We have also continued to develop our ties with NHS Trusts in the region and are offering bespoke health related courses geared to the workforce development needs of their staff.
We have also accelerated our investment in research activities, which has been boosted by £200k of Knowledge Exchange Funding during the 2022-23 year from UK Research and Innovation, and will continue with Higher Education Innovation Fund support of £273k for the coming year. This has enabled us to appoint a full time Head of Research and a Research and Knowledge Exchange Manager to help accelerate the development of research and KE activity, including increases in research student numbers and grant income aligned to our Strategic Plan and in support of future HE-BCI, REF and KEF returns.
AECC has also benefited from higher UK interest rates during the last 12 months with interest received increasing 11-fold from the previous year.
Staffing numbers and costs have continued to increase over the period in line with our increased activity. During the year we made a pay award of 3.5% to all staff, plus an additional amount of £500 per full time employee for all lower paid staff. In addition, all staff received a one-off “cost of living” payment of £600 as a contribution towards the impact of inflation, which was particularly high over the winter period. As a consequence of this, plus the investment made in additional key posts, the amount of income spent on staffing has increased from 57.6% to 60.9%.
In line with virtually all organisations AECC was hit by a large increase in the price of energy, with costs for gas and electricity increasing by almost two thirds from the previous year to £467k. This, together with other pressures as a result of the growth of the organisation and high levels of UK inflation meant that non-staffing expenditure increased by nearly 30% to £4.245m.
Figures 1 and 2 below provide a pie-chart illustration of AECC Income and AECC Expenditure for respectively for the year 2022/23.
AECC invested nearly £1.6m in capital improvements during the 2022-23 academic year, virtually all of which was funded from operational activities during the year. Of that £546k was for the completion of the construction and fitting out of the Integrated Rehabilitation Centre, £254k on a new ultrasound system, for use both clinically and as an educational resource, £138k on Teaching equipment and £634k on improvements to the premises and IT infrastructure of the University.