Dear Colleagues, 

I wrote to you last year about the challenges facing the UK higher education sector and the immediate actions we implemented at Newcastle to address these. I am now able to share details of our longer-term plans, which aim to strengthen our position and support continued investment in our future as a leading global university. 

First, I want to acknowledge that we are in a stronger position than many other universities. Last year, we achieved record levels of research funding, and we continue to rank among the best universities in the UK for translating our outputs into real-world impact, improving lives locally and globally. Additionally, our healthy cash reserves and low borrowing provide a solid foundation for making considered choices about our future. 

We are making every effort to mitigate further loss in tuition income. However, as highlighted in the Chief Financial Officer, Nick Collins’ recent update in NU Connections (internal access only), the financial outlook for UK universities remains difficult. We do not expect our tuition fee income to return to previous levels in the near term and the prospect of additional government support is not favourable, though I continue to lobby ministers and officials in my capacity as Chair of the Russell Group. As you may have seen from news headlines, many universities across the country are taking actions to ensure their financial resilience. At Newcastle, tuition fee income cross-subsidises many of our activities, including research, and a sustained shortfall substantially affects our ability to deliver our previous plans. While our cash reserves provide some capacity to weather short-term deficits, we must act decisively to restore balance between costs and income for the long term. 

Our way forward

Following yesterday’s meeting of our governing body, University Council, we now have approval to proceed with a two-year transformation programme building on insights from the NU Shape strategic planning process. This will secure our financial sustainability while ensuring we can deliver on our vision of advancing knowledge, providing creative solutions, and addressing global challenges.  

Managing our expenditure 

Our initial priority is to shore up our financial sustainability. To achieve this, we have identified the need to make further annual cost-savings of at least £30m from the budget for the Newcastle campus beginning with the 2025/26 budget. 

We are aiming to achieve this in two ways: 

• Non-Pay Budgets: We are reducing annual non-pay budgets by £10m. These savings will be integrated into future budget planning, allowing us to replace the current strict spending restrictions with more standard approval processes. 

• Colleague Costs: We are aiming to reduce our annual pay budget by £20m, or 5%. The number of roles impacted will depend on the distribution across grades and staff categories, but we want to be upfront about the scale of these reductions. 

Voluntary severance 

We are aiming to achieve these savings by voluntary means, and we are launching a final opportunity for colleagues to apply for voluntary severance.  The scheme will be open to all Newcastle-based colleagues, and we are looking for an even spread between academic and professional roles across all functions, including teaching and research.  We will also support, where possible, voluntary requests from colleagues to reduce working hours or make flexible retirement plans.  

Wider change 

We understand that we cannot deliver the same outputs with less resource. A key part of the transformation programme will involve reviewing our structures and processes to ensure that they are fit for purpose and efficient, reducing unnecessary bureaucracy.  This work will be carried out in parallel with the cost-savings we are seeking to implement. 

Consultation 

It is important that we are honest that we cannot rule out the possibility of compulsory redundancies, but this would be as a last resort. In case this is needed, we are beginning a process of collective consultation with our trade unions. This process is a legal requirement, but it is also the right thing to do. All colleagues will have access to a consultation pack outlining the savings required and the proposed steps forward. We aim to work collaboratively with our union representatives to find opportunities to mitigate and reduce the impact of these proposals, where possible. 

Support and Next Steps 

We understand that these changes will be unsettling, and we are committed to transparency and openness throughout this process. We are putting in place a package of support to help colleagues navigate this challenging period and we will ensure that there are regular communications to keep you informed of progress. 

Our vision for the future 

I want to reassure you that protecting the student experience and ensuring we maintain academic excellence across our diverse disciplines will be at the forefront of our minds throughout this process, as both are vital for our future success.  

The steps we are announcing today, while challenging, are necessary to ensure we can continue to deliver world-class education and research for the benefit of the region and beyond for generations to come.  

Thank you for your continued dedication and support as we navigate this period of change together. 

Best wishes 

Chris 

Professor Chris Day CBE, DL, FRCP, FMedSci, FRSA
Vice-Chancellor and President, Newcastle University