Wednesday 27 May 2020
All staff email
Financial challenges and voluntary ways to reduce our employment costs
I hope you were able to find some time to relax over the bank holiday weekend.
I am writing today in follow-up to the email I wrote a couple of weeks ago about the financial challenges we, like all universities in the UK, face.
As you may recall, our modelling suggests we could face a significant shortfall of income because of Covid-19, even after taking into account the cost-reduction measures we have already made: paring back our capital programme, stopping all but business-critical staff recruitment, and restricting all other non-essential spending.
The biggest driver of that shortfall is the impact we anticipate Covid-19 will have on student recruitment and, as a result, income from student fees. I am very grateful that colleagues across the University are doing all they can to maximise student recruitment in September and to limit the shortfall. We are also engaging with the UK Government to secure additional government funding.
However, we don’t think this will be enough to fill the gap. So we are now looking at additional measures to manage our staffing costs, which account for approximately 60% of our overall costs. I outline these measures below.
I know many of you will be concerned about what all this means both for you as a member of staff, but also for our commitment as a community of shared purpose to deliver public good from our work.
So let me reiterate the two guiding principles that will continue to frame the response to our financial challenges: protecting jobs wherever possible, and consideration of the wellbeing of our staff and students.
Our next steps
Some weeks ago, we stopped all but essential staff recruitment, meaning we are only recruiting to business critical roles. We have now also decided to approve the use of the Government’s Coronavirus Job Retention Scheme (furlough) for roles where staff are unable to perform work due to the COVID-19 crisis. The furlough scheme will enable us to claim back up to 80% of wage costs from the Government and we will be topping up the other 20% for any staff we furlough so they remain on the same pay. HR colleagues will be providing further guidance to affected staff, as there are strict criteria around the use of this scheme, which restrict it to a limited number of roles in university settings.
But we need to go further still. We will need to be in a position by December this year to assure our external auditors that we will be able to manage the consequences of our expected income shortfall. By acting now we may be able to limit more difficult measures, including redundancies, later in the year.
This is why we are introducing a number of voluntary programmes that we would like all staff to consider in the context of their individual preferences and personal circumstances.
Over the coming days we will be setting out more detail, which will include options such as voluntary severance (VS), voluntary early retirement (VER), voluntary reductions in working hours, voluntary reductions in salary, unpaid leave, and unpaid career breaks.
Staff are under no obligation to take up any of these measures, and we appreciate you will want more guidance about these options. Our HR colleagues will be sharing what taking up these measures would mean in practice soon.
Acting as one
I also want to tell you that, in light of the challenges we face, all members of the Executive Board have unanimously agreed to make a contribution by taking a voluntary salary reduction of up to 20%. This will commence from 1 August for 6 months initially, subject to review towards the end of that period. I will be taking a reduction of 20% of my salary. The aim in using the money saved is to embody the principles I mentioned above: to help save jobs where possible and to support wellbeing by enabling us to respond to student and staff hardship.
As you may be aware, national pay award negotiations, which are applicable to staff on grades 1-8 at York, are currently on hold. We await further news on these negotiations. But we are able to make changes now for staff at grade 9 and above who are not included in the national framework.
Following discussions at our Council and Executive Board, and with senior leaders across the University, we have agreed to put on hold pay review processes and pay increases for all staff at grade 9 and above. This includes putting on hold:
- Annual pay reviews for Heads of Department and all senior management at pay grades 9 and above
- Pay increases for professorial staff
We have also reviewed arrangements for our promotion cycles. We will conclude the current promotion cycle (i.e. where applications were made in 2019), with awards being made in the usual timeframe; however we will put the next round of promotion applications on hold..
These ‘on hold’ decisions on pay reviews and increases at grade 9 and above, and on the next promotions round, will be reviewed once we are clear on our student recruitment position in the autumn. The aim, again, is to put ourselves in a position to protect jobs where possible, and to be able to respond to ensure the wellbeing of our community in the difficult circumstances we face.
I know that many of you will be concerned and disappointed to hear of these decisions. I would like to assure you that these decisions have not been taken lightly. They have been discussed carefully and do not go as far as measures under way in some other universities. In addition, I am meeting regularly with our campus trades unions, and there are regular meetings between the unions and our HR team, to ensure that our plans are both effective and fair.
Over the coming days, we will be sharing more information, so colleagues can be more fully informed about what this means for them and how long these measures may remain in place. Thank you for your patience, once again, as we find the best ways to share these details with you.
There is no doubt that the situation arising from the pandemic will remain very challenging for some time to come. I know my message today may be difficult to hear at a moment when colleagues across the University are working so hard to ensure our teaching and our research continues to be carried out with an undiminished commitment to high quality. I have said many times that our success rests on the sense of shared purpose across the University community that is distinctive and special at York. Seeing that sense of shared purpose so effectively at work in these extraordinary circumstances is both impressive and humbling.
We are all working very hard to ensure that we generate as much revenue as we can in September. I feel strongly, though, that we need to pursue careful and considered measures to manage our costs at this time, so that we can at least limit any need to take more difficult decisions further down the line.
I am determined that we do what we can to protect jobs in our University, and that is why we are introducing these measures now. I am in no doubt that our ability to recover quickly and well from this crisis will be driven by our brilliant staff. I look forward to working with you in the coming months as we steer this outstanding university through these difficult times.
Professor Charlie Jeffery