1. ColegauCymru annual conference
Cutting costs –
improving efficiency
ColegauCymru annual conference
27 May 2010
Workshop

2. Finance Directors
Group
Meeting the challenge

3. What is the challenge ?

4. “Our budget next year will be the toughest ever faced
“Our budget next year will be the toughest ever faced. We are planning to make cuts of 3% in revenue and 10% in capital. It will be the same next year and the year after.”

5. What is the challenge Mid Year Forecast 2009/10 5% Total Income £426m
WAG Grant
£344m
£17m
Total expenditure
(excl Depn)
£402m
£20m
Capital
(excl grants)
£19m
£1m
Surplus
£2.6m

6. It’s not just funding cuts
Change
2009/10 – 2013/14
WAG Income
(£12m)
Pay awards
£38m
LGPS
£7m
Inflation
£11m
VAT
£4m
Net change
£72m
18% of 2009/10 expenditure

7. “something better change”

8. How would the private sector address this

9. How will FE approach these cuts

10. Cutting costs is easy…….
Saving
LRC
50%
£824k
Staff dev
75%
£742k
Marketing
£1.2m
Maintenance
£8.4m
Computers
Defer 1 yr
£3.8m
Non lecturing staff overtime ban
£1.3m
Total saving
£16.3m

11. The above account for 81% of non pay spend
What is there to cut …….
Non pay spend
Sector spend
Admin and central services
£19.2m
Premises – running costs
£17.2m
Teaching dept materials
£16.1m
Exam fees
£11.6m
Premises – maintenance
£11.2m
Franchise provision
Student transport
£8.4m
The above account for 81% of non pay spend

12. “Back office” functions …….
Staff costs
Sector spend
Finance
£5.3m IT
£4.7m HR
£3.2m
MIS
£3.9m
Total cost
£17.1m
PWC high end 15% saving over three years = £7.7m
(Less £1m – pay increments over period)

13. Is it all up to us ?
- WAG
- LEAs
- Schools
- Unions

14. Workshop topics
- “the BIG idea”
- “REAL” collaboration
- Income Generation
- Efficiency gains