Friday, 3 December 2010

You'll like this... not a lot!*

Cheer up chum. It could be worse... couldn't it?
Can't afford this

With reference to the minutes of the UoS Council meeting held on 8th July 2010, according to Watkinson the Executive Director of HR, the UoS can no longer be as 'generous' with their voluntary severance scheme:

'The Executive Director of Human Resources provided a brief oral report on the University’s current Voluntary Severance Scheme. He advised that the current Scheme, which had existed for several years, was no longer sustainable. The average payment at the University in 2008/9 was £38,000 or 90% of salary which contrasted with a recent, national CBI survey which found average payments of £12,000 or 50% of salary; the University’s scheme was amongst the most generous of those provided by other north-west universities. Council noted that annual voluntary severance payments (including early release of pension) amounted to £9.7 million in 2008/9.'

In light of this, University

'Council resolved that the current Voluntary Severance Scheme be discontinued and agreed that University management should enter into a period of consultation with the trade unions about an alternative, affordable severance scheme.'

This got the grey matter working overtime. Clearly the word 'consultation' is distinct from the word 'negotiation'. And what sort of 'consultation' can be conducted on the basis that University Council has already decided to scrap the existing scheme for something a whole lot cheaper (cheaper for the University, costly of course for those taking voluntary severance).

Try comparing apples and apples
Up the apples, down the pears

Moreover the above analysis compares apples with pears (average academic salary of £42,000 compared to average salary somewhere in the region of £24,000). It is assumed that the above figures would include many of the costs of voluntary severance under Project Headroom. On the surface, 90% of salary does appear 'generous'. However, this conceals the question of the long service and age demographic of many of those who accepted voluntary severance under PH. It is suggested that this is the major contributory factor in raising the overall level of payments during 2008/09 to £9.7million.

As the students are actively resisting the massive cuts in student funding and increasing fees which mean a huge cut in future earnings, this massive cut must be resisted by the campus unions at all costs. Why? Changes such as this are usually an auger for job losses. If not, why change terms and conditions of service? However, there is another very good reason why this should be stopped in its tracks.

Can afford this

Just immediately below this little gem, another piece of Council minutary almost leapt of the page. It concerns the progress of the IT Transformation Programme. It's well worth a large quote. It goes something like this:

'The Chief Information Officer introduced a progress and finance report on the IT Transformation Programme, which was attached as an appendix to the Vice-Chancellor’s Management Report. The report requested a further £2.5 million to complete the Transformation Programme; this request had been approved by the ICT Project Board and Strategic Leadership Team and had been built into the Annual Budget to be presented to Council later in the meeting. The estimated third party hardware cost of the programme was still subject to negotiation, although a prudent estimate was £6.5 million; this would bring the overall cost of the project to £9.3 million, an overspend of £2.7 million on the original estimated cost of £6.6 million. £2 million of this sum was a result of items not originally specified by KPMG in their cost calculations. After a tendering process, Unisys had been selected as the partner to work with the University to deliver the required solution.

It's an enigma

Members questioned the extent to which the overspend against the original cost estimate could have been predicted and whether best value had been obtained from the use of KPMG as consultants. The Lead Member for IT reminded members that, when Council had approved the implementation of the IT Transformation Programme, the potential requirement for some additional expenditure had been appreciated. Both the Chief Information Officer and the Lead Member for IT confirmed that it would have been difficult for KPMG to factor in the required additional expenditure into the original estimate; this was largely a result of an underestimate of the extent of institutional maturity and capability (both in terms of human and physical resources). As an example, the KPMG solution of outsourcing data centres had not been feasible given the current state of development and would have resulted in significantly increased revenue costs. University management expressed confidence that, barring anything currently unforeseen, the additional £2.5 million would be sufficient to see the project through to a conclusion. The reduction in operation and maintenance costs after the completion of the project was emphasised; the hardware was provided on a 3-5 year renewal basis and had 5 years storage growth built in.

The Deputy Vice-Chancellor and Registrar and Secretary advised that, as Chair of the Project Board, he would be commissioning a post project review and this would include a review of the use of consultants.

The Vice-Chancellor informed Council that the completion of the programme would provide a stable platform for flexible future delivery (taking into account the particular needs of Salford, given that the majority of students commuted to the University and were not residential) and any further requests for strategic IT spend would be included in annual budget submissions for Council approval.

Council resolved to approve the additional £2.5 million capital expenditure recommended in the report.'

Nothing of real concern here apart from a £2.7 million pound 'overspend' which is a hellofalotofmoney. Any guesses as to whose head will be on the chopping block for this little 'overspend'? If you'd like to send your answers you can do so by clicking here.

Might this not also provide an answer to the question as to why there's little money left in the coffers for the 'generous' Voluntary Severance scheme?

*Courtesy of Paul Daniels the magician

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