The financial situation of Aarhus BSS towards 2019

Aarhus BSS to trim costs towards 2019 and to invest in the development of the business field

2016.06.14 | Aase Bak

The plan to ensure that Aarhus BSS can navigate safely through the coming financial years of 2016-2019 was approved yesterday by the Aarhus University Board.

Aarhus BSS has a total annual turnover of approximately DKK 1.1 billion. The school is expecting falling revenues of DKK 59 million towards 2019 as a result of the degree programme resizing, the study progress penalties and the reallocation contribution.  A small expected increase in external funding is far from enough to fill the gaps that result from the falling revenues on ordinary operating activities.  The Aarhus BSS action plan thus includes considerations on how to ensure more revenues while reducing costs. 

Investing in development
At the same time, work will begin on strategically strengthening the business fields and the fields in which business and social sciences are collaborating. In addition to the school’s own investments, Aarhus BSS will receive approximately DKK 42 million from Aarhus University’s strategic funds – the so-called USM funds. Overall, from 2017 to 2021 approximately DKK 110 million will be allocated towards strengthening the business field and the fields that overlap with social sciences.

“Our ambition is to educate the best qualified graduates, and this requires that our students are taught by researchers of an international standard. For this reason, we will first of all allocate some of the funds towards increasing the level of our researchers in the business field and in fields where business and social sciences are collaborating,” says Thomas Pallesen.

The administrative costs must be reduced
In the Aarhus BSS financial action plan costs are expected to be reduced by DKK 26 million during the financial years of 2016-2019. Among other things, Aarhus BSS will save DKK 7 million on its administrative centre during the next four years as part of the planned two-percent cost reduction of the total AU administration.

“Our current situation requires us to invest in the development of research and at the same time reduce our costs. Thus, we need to become better at prioritising our administrative services. The school management team has initiated a analysis which is expected to be completed during the summer. Following the analysis, we will determine how to implement the cost reductions in practice across the administrative sections,” says Dean Thomas Pallesen.

The local liaison committee in the administrative centre has been involved in the overall cost reductions, and both staff and division managers have been encouraged to involve the employees in the administrative sections.

Another way in which Aarhus BSS can reduce costs is through its contribution to the central administration, which is expected to fall by DKK 14 million in the coming years. Also, additional rent costs are expected to fall by DKK 3 million.

New degree programmes contribute positively to the financial situation
On the plus side, extra income is expected to be gained from new degree programmes such as Public Policy and the English MSc in Political Science - particularly because new students on these programmes may join existing classes and will thus not generate any notable additional costs.  Other expectations include an increased intake on existing programmes and an increase in the basic research funding of up to DKK 11 million towards 2019.

In total, Aarhus BSS expects an additional income of DKK 24 million.

The study progress penalty as an uncertain factor
One of the uncertain factors in the action plan is the size of the penalty which the school will have to pay if students fail to complete their studies on time. In the four-year action plan, the study progress penalty is expected to amount to DKK 19 million. Thus, it is important that both lecturers and students are aware that the student’s study progress has a significant effect not only on the education of the individual student, but also on the school’s financial situation.

The process surrounding the language programmes, which was initiated in 2015, has not been included in the financial action plan although moving the language programmes to Arts will involve significant financial redistributions. The reason is that the move had not yet been decided when the plan was being developed.

Aarhus BSS
Tags: Budget, financial situation, Aarhus BSS, costs