A new Deloitte survey of finance directors offers evidence on how the UK’s higher education estates are a potentially good market for facilities management service providers.

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Despite caution about the financial and regulatory environment, Deloitte reports that universities are set to increase investment in teaching and student facilities as competition for student numbers continues to increase.

Representing over one-third of the sector, the firm’s annual survey of higher education finance directors gauged the views at UK universities.

(83%) of these FD’s say they will increase capital expenditure in the next year, up from 43% in 2013’s survey. Finance directors say that 61% of capital spending will focus on teaching facilities, 18% on research facilities and 15% on improving students’ experiences, such as student unions and sports facilities. Only 4% will be focused on student accommodation.

Universities are looking for additional finance in order to fund this spending. 45% of finance directors expect a moderate increase in their need for credit in the next 12 months, while 13% say there will be a significant increase in credit.

The plans to spend more have not come without caution. 89% said there is an above normal, high or very high level of financial uncertainty facing their university, and 57% say now is not a good time to be taking risks onto their balance sheets.

Julie Mercer, Head of Education Consulting at Deloitte, said:

“The results of our latest survey suggest there is a ‘prudence paradox’ affecting the higher education sector.

“Finance directors are wary of the financial environment and favour strong financial management over risk-taking. But, at the same time, ambition and investing for growth are both needed. As such, risk taking is a necessary strategy for universities.

“We see in our own discussions with universities that investment in teaching and research are at the forefront of their strategies. With record numbers of students heading to university following the recent A-Level results and the relaxation of controls on student numbers, there is increased competition to attract students.”





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