Is the UT going bankrupt?
Immediately a reassuring answer: that chance is very, very small. Let's take a look at the financial figures from the most recent annual report. The UT ended 2023 with a deficit of almost 11 million euros, out of a total budget of around 500 million euros. Such a deficit must be compensated with the so-called reserves of a university. Of the almost 165 million euros that the UT started 2023 with, 154 million euros remained.
A quick calculation and at this rate, the UT can draw on its reserves for another fourteen years before all those 'savings' are used up. In addition, the university still has enough money in its wallet: a sloppy 113 million euros. In short, the UT has some very ‘deep pockets’.
Nothing to worry about then, right?
Well, it's not that the UT's financial situation looks particularly bright in the coming years. More on that later. And of course, it is not wise to recklessly exhaust all your cash and savings, under the heading 'it will probably work out fine'. Every student knows that, every university administrator knows that.
Apart from that – and now the story is getting more technical: the UT has to stay within certain financial bandwidths according to the Ministry of Education, the major financial backer of every university . If an educational institution threatens to become (too) unhealthy financially, the Education Inspectorate can intervene. A university can then come under supervision – even directly by the minister. That is what’s at stake.
As if you as a person would end up in debt restructuring, so to speak.
Why are we in a financial crisis?
The UT is bracing itself for tough times and is therefore making significant cutbacks. A lower intake, austerity plans of the new cabinet and the deterrent effect of, for example, the long-term study fine and the new law on internationalisation are taken into account. It's a negative spiral that the UT doesn't think it can get out of easily. In the worst-case scenario, more than five hundred (!) jobs will disappear at the UT in the coming years.
How did the UT end up in this crisis?
For now, we'll keep it very brief: too little income and too many expenses. If you do that for years on end, you will automatically end up in a crisis. The first signs could already be seen in 2022; the UT was struggling with a lower student intake than expected and with increased energy costs as a result of the war in Ukraine. A similar pattern was seen last year, mainly due to – again – a disappointing influx and increased costs. The UT was especially unprepared for the increased wage costs due to a new collective labour agreement (+9 percent)... If you consider that wage costs account for about 70 percent of a university's total expenses, well, that’s just basic mathematics.
Are people going to be fired?
Much is still unclear about this. The news of those possible five hundred jobs that are at risk dates back to just before the summer holidays. That was the moment that the Executive Board announced a formal 'organisational change'. In October, there should be more clarity about the personnel plans for each faculty or department. In the meantime, the UT wants to hire a 'programme manager organisational changes'.
It is however likely that people will be fired. Since the UT has to save tens of millions of euros annually, it is to be expected that there will have to be a reorganization somewhere. Where and how, that is the question.
Is the UT allowed to just fire people?
No, definitely not. This is due to an important difference: not all reorganisations are the same. The UT distinguishes between an organisational change (no reorganisation or redundancies, but people performing other activities) and a reorganisation. The latter therefore does have 'far-reaching legal consequences', in other words: layoffs. But as an employer, the UT must adhere to certain 'rules of the game', both its own and those in the collective labour agreement.
Can the UT still hire new people?
The short answer: yes. If you take a look at utwentecareers.nl, you will see that there are still dozens of vacancies. A general hiring stop is the rule, but the UT also makes exceptions. For example, for PhD positions, if a scientist has been awarded a research grant. But there are also exceptions for, for example, 'essential business operations' or positions that are difficult to fill due to a tight labour market. Ultimately, the Executive Board or a Faculty Board decides.
What is the UT doing to get out of this crisis?
'Towards financial resilience' is the headline of the UT page where all information about the current financial problems is collected. On that page there are also twenty measures to make the UT more financially 'resilient'. These range from increasing the student intake and bringing in more research funding, to making UT education more profitable and 'finding a healthier balance between support and academic staff' – read: fewer support staff.
What can I do to help?
No more ordering meeting lunches, for starters. Jokes aside, such a measure has hardly any effect from a financial point of view. Think of it as gesture politics. After all, it was not for nothing that the plea of Executive Board President Vinod Subramaniam was to solve these problems together. And someone will only try to solve a problem when they see the necessity.
For the time being, the UT has not been the most decisive university in this area, because this year we are once again heading towards a deficit. Still, there is something to be said for Subramaniam's call: every little bit – big or small – will help. In other words: ‘pinch your pennies’ and – where possible – bring in more income.
Do you have (more) pressing questions about UT's finances? We’d be happy to explain more in a follow-up to this 'Financial crisis, what's the deal again?'. Submit your question(s) via [email protected], or send us a message via social media!
