University of Northampton announces voluntary severance scheme and projected £19.3 million deficit

More than 500 colleagues from across the University of Northampton (UON) have been warned about financial challenges the university currently faces, the effects of a drop in international student enrolments and a voluntary severance scheme.

Impact on International Students

A UON spokesman explained: "From January 2024, the UK has implemented a new rule preventing most international students from bringing accompanying family members during their studies. This policy change has significantly impacted the higher education sector, with a 44 percent drop in study visa applications to UK universities in the first quarter of 2024. At UON deposits for 2024 are below 2023 and 2022 levels.”

Financial Challenges

The UON spokesman outlined several financial challenges affecting the institution's sustainability.

The spokesman said: "These include a five percent rise in the contribution toward the TPS pension scheme, increased utility costs and pay costs increasing.

"Challenges particular to UON however, are the financial covenant restrictions agreed when UON took out a bond from the Treasury to build the Waterside campus. Capital repayments on the bond start in 2025, and due to the additional repayments, UON must generate cash in order to remain compliant with the covenant terms.”

Projected Deficit and Mitigation Measures

The spokesman also highlighted the projected deficit and the measures being implemented to mitigate it.

The spokesman said: “The deficit for 2024-25 at the University now stands at £19.3 million. The measures which have been brought in to mitigate the financial position to date include:

• A freeze on the salaries of University Leadership Team members for 2024-25, with no inflationary pay increases.

• Enhanced controls on overtime, promotions, and staff recruitment.

• Increased procurement controls.”

Voluntary severance scheme

The spokesman emphasised that no redundancies have been announced and explained the introduction of a voluntary severance scheme.

The spokesman said: "This scheme allows employees to leave voluntarily with a severance payment that is more favourable than redundancy.”

Participation is voluntary and must be mutually agreed upon by the employee and the University. Given the voluntary nature of this scheme, UON says it cannot predict the exact number of employees who will opt to leave.