The UK higher education (HE) sector is experiencing a high level of turbulence arising from the introduction of the variable fee regime and the removal of student number controls for full-time HEU (Home/EU) undergraduates, increased competition for overseas students in an unsupportive domestic policy context, and greater government intervention in the name of marketisation and competition –which can be viewed as part of the worldwide ‘financialisation’ of universities (Parker, 2013). In such an environment, the accuracy of budgeting and financial forecasting might be expected to take on increased significance. The purpose of this study was to identify and understand the contingent factors that influence the accuracy of budgeting and forecasting in UK universities and the characteristics of financial scenario modelling in the sector. A mixed methods approach was adopted, with data collected through a comprehensive questionnaire survey of UK HE institutions and supplemented by interviews. The results reveal a degree of inertia in spite of the more dynamic and competitive external environment; traditional methods of budgeting and forecasting have been maintained and more sophisticated approaches are little in evidence. Overall, there appears to be general satisfaction with the level of budgeting accuracy, with the most significant factors affecting this found to be: the perceived accuracy of student number estimating and forecasting (where a problematic relationship with the student number planning function is evident); the difficulties caused by allowing unspent budgets to be carried forward; and the time taken to prepare budgets. Where there is a demand for greater budgeting accuracy, this seems more likely to emanate from lending banks than from senior management or governing bodies. Scenario models incorporate common drivers, but preference is shown for a simple approach – sometimes less than appears to be required by the current funding body, HEFCE. A possible explanation for the overall findings lies in the manner in which the new fees regime has played out and the growth in overseas student numbers, which have led to a period of relative financial strength for many universities, in spite of the limited availability of capital grants during a period of austerity. Thus the focus of any ‘financialisation’ has tended to be on income rather than cost control – though how long this will continue is debateable, particularly in the case of universities with a relatively weak market position. This research contributes to the limited literature on management accounting in universities, particularly in the changing UK environment, and provides additional insights to Parker’s description of financialisation. In focusing on budgeting accuracy, it also highlights an issue that, though implicit, is rarely discussed in the management accounting literature.
Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:762059 |
Date | January 2018 |
Creators | Cropper, Paul |
Contributors | Cowton, Chris |
Publisher | University of Huddersfield |
Source Sets | Ethos UK |
Detected Language | English |
Type | Electronic Thesis or Dissertation |
Source | http://eprints.hud.ac.uk/id/eprint/34792/ |
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