Faculty of Economics and Business headed for dramatic budget shortfall
Next month, the UvA’s draft 2024 budget will be adopted. What is striking is that in the preliminary calculations, the so-called Framework Letter, the Faculty of Economics and Business (FEB), after years of prosperity, is suddenly deep in the red, to the tune of four million euros. Cuts are looming.
The large deficits are reminiscent of the FEB’s dramatic financial situation around 2010 when it was forced to undergo a major reorganization led by an interim dean, leading to dozens of compulsory redundancies and department closures. The situation now seems less serious than then, but even now the deficit cannot be eliminated overnight. The so-called long-term forecast shows a deficit of €4 million in 2024, decreasing to €2.6 million in 2027.
What exactly has happened in recent years to cause the once flourishing faculty to suddenly find itself in a financial quagmire? Where did this financial deficit come from? How should it be eliminated? Dean Roel Beetsma, who has only been there for a year and a half, does not want to say much about it or answer any questions. “You ask good questions, but they are all subject to discussion with my people. So I can't answer them, unfortunately.”
Dean change
Last year was an anniversary year for FEB. The faculty celebrated the 100th year of its founding. Following the centenary celebrations, a change of dean also took place. After a 10-year stint as dean, Han van Dissel retired. Van Dissel recalls leaving the faculty in excellent financial condition, with an estimated reserve of €3 million. Those reserves are “even greater,” according to professor of corporate finance Arnoud Boot, but apparently, that does not mean that the accounts are balanced, as is now apparent.
According to Boot, a number of things have gone wrong at the faculty in recent years, which he says remained under the radar but are now coming to light. “Financial reporting remained unclear, so problems were spotted too late, which led to mortgaging the future. In addition, support and management (OBP) staff have been stretched thin in many places. Another reason is that income from executive education (commercial training for senior managers from the business world, DW) has fallen sharply in recent years.”
According to him, the fact that financial issues were not noticed is partly due to the policies of the departed dean. Boot says: “All our five-year strategic plans were supposed to be based on quality, not quantity, but the reality was just the opposite. In practice, Van Dissel went for quantity every time. So more students, more programs, etc. In my view, this does not mean having to make choices, but it does erode the faculty. Quality is diluted, the number of support staff is growing, logistical problems and space issues arise that cost money, and in the long run, you are bound to lose out.”
Labor market
Boot does not use the words “reorganization” or “dismissal,” but something does need to be done and, according to him, it doesn't even need to be too complicated. “The labor market is so tight that support staff in the market sector can find another good job in no time.” He also believes more money should be attracted “from outside. We need to attract more Dutch Veni-Vidi-Vici grants and European ERC grants. If you monitor scientific integrity carefully, research funds can also be attracted from companies, enabling us to continue to compete internationally.”
The quality of research must be maintained, warns Boot. “The massive number of students at FEB requires more lecturers, precisely to keep the more costly tenure tracks for researchers following an academic career path and need to do extensive research, otherwise we will erode the quality of research.”
Culture change
According to Boot, there also needs to be a faculty culture shift. “People need to be held more rigorously accountable for their performance. That has not been the case and the Executive Board is also to blame. It had a hard enough time with its own position in the past 10 years and thus did not keep a sufficiently sharp eye on faculty. For example, it is not wise to keep deans in office for 10 years. Certain undesirable behaviors then become entrenched.”
The draft UvA budget will be adopted in early October. The intention then is that identified deficits from the Framework Letter, as described above, will have been eliminated.
