A GLASGOW Caledonian University committee has revealed that the income for its troubled New York campus project is “very disappointing” and warned of having “limited confidence” in the budget.
The institution’s Finance and General Purposes Committee (FGPC) called for a new budget to be drawn up last year and sought an analysis of the scheme’s overspends.
It has also emerged that accounts showed a doubling of the deficit for the New York project, which has now received £11.8 million in loans from the university.
Dr Nick McKerrell, Convenor of Glasgow Caledonian Combined Union Committee, said: “Unless there is a dramatic increase in student numbers the financial burden of GCU New York could prove too much for our senior management.”
Led by Principal Pamela Gillies, Glasgow Caley unveiled its New York satellite at a high-profile event in 2014 that was attended by the then First Minister Alex Salmond.
However, the glitzy launch was premature as the venture did not have a teaching license and could not award degrees.
A huge delay in securing the necessary permissions fuelled the perception that the project, heavily associated with Gillies, was in crisis, particularly given the offshoot was sucking up resources for salaries and accommodation.
Glasgow Caledonian New York College (GCNYC) eventually got the nod to award degrees in June last year, following which around 16 “pioneers” were enrolled to study.
The £11.8m loan provided so far for the project, which has been praised by Sir Alex Ferguson, is the equivalent of around £700,000 per student.
However, the September minute of the governing University Court revealed internal concerns about the New York finances and included an update by the FGPC on the management accounts for July last year.
The FGPC chair noted: “Although the Committee was pleased that there was scope for the student numbers to meet and exceed 17/18 expectations, GCNYC’s income figures remained very disappointing against budget and despite assurances to Court that the 16/17 forecast figures would be met.”
The minute continued: “The Committee therefore had limited confidence in the 17/18 forecast budget previously provided for GCNYC or the likelihood that income streams would be realised. While the Committee noted that there might be reasons why income had not materialised, it could not accept continued and significant underachievement of budgeted income.”
The same document revealed that the FGPC chair had asked the university’s Executive Board to “urgently” provide a refreshed budget for 2017/18 which “focussed on those income streams that could be, and ought to be, delivered”.
The minute added: “The Committee had also sought an analysis of the costs overspend.”
The Court “noted” the accounts, which included a deficit that had doubled between April and July last year, as well as the “lower than forecast income”. Gillies also “noted” that the Executive “understood the concerns of Court members”.
However, the FGPC agreed that a loan extension was necessary for the New York project to “continue to function” and the Court sanctioned an extra £1.8m.
In a statement to this Newspaper, Deputy Vice-Chancellor Professor James Miller said:
“The disappointment expressed by the University Court related to the figures for 2016/17 and was largely because we had not been awarded the licence. Receiving the licence in June 2017 left little time to recruit for 2017/18 and we wanted to ensure that a prudent budget was set, which recognised that we were still in the early stages of being able to recruit students.”
McKerrell told this newspaper: “These minutes illustrate that despite gaining a licence from the authorities GCU New York is living a hand to mouth existence. The original Business plan is clearly out of reach given the three-year delay in being allowed to take on students. It can only operate because of a financial loan from here in Glasgow. To extend this by almost another two million despite GCU New York missing all of their targets, and given the financial position that the University and the HE sector is in, beggars belief.”
Source : HeraldScotland