How college budgets are being wasted

Budget reductions are still high on the agendas of the college staff I meet and work with. The magnitude of cuts being imposed on colleges by funders is huge and it is a real worry to everyone.

Although most SMTs are still focusing on how to counter this by maximising income, an increasing number are now working with me on how to reduce their expenditure and, in particular, waste.

These SMTs are aware that, although savings have previously been made, a significant percentage of their budget is wasted each year and that considerable savings can be made. They also realise that this isn’t just a procurement issue; it is a mindset and business strategy issue.

How does mindset impact budgetary waste?

Rather than continue with the traditional model above, some providers have outsourced support work functions. Examples would be whole departments such as marketing, or functions within departments such as PR. This works by reducing the capital cost of the salaries, but there is a margin to be paid that constitutes the profit margin of the retained company.

However, this model follows a similar mindset to the previous system. On its own it isn’t enough when we face huge income reductions.

Change your mindset and ask yourself why a piece of work needs doing at all – is it being done because you have always done it (but never really used the results achieved in a meaningful way)? If the outcome of the work is required, what options are available to produce this outcome? Can you find significant cost savings by adopting a different methodology?

For example, in my own business I wanted to design an infographic. The cost quoted by a local designer was £150. I realised that, however many quotes I obtained, this is the sort of price I would have to pay to any good UK designer.

Thinking it through I was sure I needed this infographic, but lateral thinking made me realise that if I change the way I approached this I could cut costs by more than 90%.

The answer was to outsource the work to Lithuania where I obtained a quote of $25 (£15.11) for what turned out to be a highly professional result.

Potential mindset changes that save money

Of course my example saves just a few pounds and on its own will make little impact on a college budget – but it is scalable.

One college I’ve worked with saved more than 20% of their marketing budget by doing things differently. Double digit savings in other departments are also apparent. This was without a huge mindset change. Their challenge is now to move from conventional thinking to the mindset I advocate and save much larger sums.

Where else is money being wasted?

The biggest cost in any college is staffing. Outsource the right work and fixed costs like salaries can be saved. But this doesn’t necessarily mean we need to actually cut staff numbers.

I advocate using staff more effectively. For example, why require staff to monotonously teach the same basic modules each year? Why not free them from this and allow them to run more well-structured quality tutorials where learning is enhanced, the student learns and better results ensue?

Mindset or technology?

In a previous FE News article NCFE’s David Grailey quoted FELTAG on how learning technology can improve FE learners’ chances of reaching their potential. Ben Taplin from JISC also recently wrote about boosting attainment through gamification.

Technology is now available that will take away the drudgery of teaching the topics that tend to be taught, perhaps by rote, many times a year.

Where high quality materials are available to teach these topics, there is also the opportunity to sell the courses to industry. Some might argue that these courses are already available. My answer is that there are programmes but the quality is, in most cases, relatively poor. Few use high quality resources and most test learning by rather suspect multiple choice methods.

Compare this with the really high quality MOOCs being developed by FutureLearn, and other consortia, and the need for a mindset shift becomes apparent.

The other apparent mindset shift is that universities now see MOOCs as part of their recruitment strategy. They give away the MOOC as a “test drive” of the full product and promote recruitment by demonstrating quality.

Is saving money expensive?

Several colleges have commented that the cost of setting up the systems required to save money by mindset change can be prohibitive.

My answer to this is twofold. Firstly, start small and expand the process. And secondly, collaborate.

Outsourcing a few admin tasks such as data inputting, simple design projects, etc, is very easy to set up and test. The risk is low and the reward potential high.

As for the larger projects like MOOCs, think about shared services, joint ventures and using your existing collaborative networks to achieve the way forward.

And if you think this is all pie in the sky, then you don’t yet have the mindset for this, and it will fail for you. The first step is to think the unthinkable.

Marketing consultant Stefan Drew was previously director of marketing at two FHE colleges and now works with providers throughout the UK, Europe and the US – visit: www.ProviderMasterMind.com