Cardiff University reopens its voluntary severance scheme due to facing a £30 million deficit

Cardiff University has reopened its voluntary severance scheme (VSS) due to facing a £30 million deficit.

The VSS was first introduced at Cardiff University back in 2013 and again during COVID-19. The university, like many others in Wales and the rest of the UK, has been hit by the decline in the number of high-paying postgraduate students.

Even with the £250 increase in domestic students’ annual tuition fees since September, Welsh universities continue to face a projected deficit. This has led to Cardiff reopening the scheme in response to the £30 million black hole which vice-chancellor Professor Wendy Larner announced last month.

A Cardiff University spokesperson said: “The University’s vice-chancellor confirmed in all staff meetings this week that our existing voluntary severance scheme (VSS) [which closed in September] will be reopened to staff in November.

“This is not a new scheme. It forms part of a package of on-going measures designed to reduce the University’s deficit.”

Cardiff employs around 3,000 staff members and has an estimated 32,000 students, however, with voluntary schemes, there is a risk of losing valuable staff members, with strong research and academic backgrounds.

In an update to staff, Professor Larner said: “Despite a small but welcome increase in tuition fees in Wales, very little has changed over the last 12 months. Public finances remain tight, and other spending areas, understandably, remain a higher priority for our politicians.

“Cardiff is one of many universities adopting measures to mitigate financial pressures. We are facing a £30m operating deficit for the 2023/24 financial year.”

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The vice-chancellor added: “Had we not taken action mid-year, that deficit would have been far worse. While we are not in immediate financial difficulty – our reserves will cushion us in the short term -we cannot continue to use these reserves to cover operating costs. In short, we need to return to the point where our costs are lower than our income, and we are trying to do so within a broken funding system.”

In addition to saving costs, Wales Online reported there is “speculation” that Welsh universities are exploring the potential of shared services. However, they would need to secure charitable status which could offset any possible financial gains.

According to The Times, some universities have even lowered grade boundary requirements to encourage students to enrol as a result of the “cash crisis”.

Wales Online also said that Cardiff is attempting to rationalise its large property estate, which includes closing certain offices and combining teams in other facilities, while also looking to sell some properties.