The Recession Has Still To Hit the Public Sector!
Posted by Brian Kelly on 27 July 2009
Last week began with the gloomy headline in the Sunday Times Whitehall sharpens the knife for university cuts. The article began:
WHITEHALL is drawing up plans for deep cuts in the higher education budget that in the worst case would slash a fifth from university finances, funding officials have disclosed.
and went on to point out that:
If implemented, they [the cuts] would lead to the widespread closure of university departments and could cause some institutions to shut altogether.
A few days later the times then described how “Arnold Schwarzenegger [is] in last-minute deal to save broke California“. But this isn’t Arnold playing a heroic role as:
“The higher education system, including the University of California, will be hit by nearly $3 billion in cuts“
It seems that public sector organisations are facing the brunt of such cuts. Indeed the Time praises Arnold Schwarzenegger: “His greatest victory was standing firm and warding off tax increases“.
I’ve heard financial commentators suggest that the recession hit the private sector first, whilst public sector organisations were initially protected by 3 year funding agreements. But as the private sector slims down and closes unprofitable areas of their activities they will be in a better position to respond to the economic recovery, whilst public sector organisations begin to experience their financial difficulties. Indeed in a blog post entitled “Universities and financial crisis” the elearningspace blog reports that:
“The Bank of Canada has declared that the recession is over. While the numerical indicators (small growth predicted) may support this assertion, reality will tell a different story for many people and institutions. Universities, for example, are only now beginning to feel the impact. University of California is starting with deep cuts. Canadian universities are facing cuts as well. Few universities, however, face the difficulties of Harvard. Hard Times at Harvard provides a rather depressing glimpse into university systems that have lost focus and direction.“
Whilst I appreciate that the Times may be accused of using a tabloid headline and language in its article, I do think we need to reflect on the implications of significant cutbacks in the education sector. Especially in light of the Conservative’s recent success in the by-election and the headline on the front page of Saturday’s Guardian “I’ll be nation’s hate figure, says top Tory Philip Hammond” in which the shadow Treasury chief secretary, “anticipat[ed] an era of deep short-term cuts in public spending“.
We can’t say that JISC has failed to provide support for such a gloomy future: they did, after all, commission work on Scenario Planning which was was originated by the JISC’s Users and Innovation programme, and further developed by JISC infoNet in partnership with Netskills with the aim of “providing a sustainable online resource as well as a range of workshops for the sector“.
My scenario, based on these recent reports: “The higher education sector has to deal with severe cuts in its funding, at a time when the weaker Web 2.0 companies have gone against the wall, leaving the stronger companies well-placed to deliver services on a global scale”. How should we plan to respond to this increasingly likely-looking scenario?