The University of Essex is facing a financial deficit for the first time in its 34-year history. Staff have been told that the institution must make savings of more than £1 million to avert the looming crisis.
The University Council has agreed that no "significant'' new projects can be given the go-ahead until a viable plan has been found to deal with expected deficits of £574,000, £1,154,000 and £1,406,000 for the next three years.
Essex has a reputation for high quality research, mainly in the social sciences, which in the Nineties overtook its image as a hot-bed of student unrest in the Sixties and Seventies.
By its own admission it is now suffering from a "less than favourable financial situation''.
Professor Ronald Johnston, vice-chancellor at Essex, blames the Government, which in late 1992 announced a funding cap on student numbers.
He said: "Many universities are facing the same financial problems. It has been brought about by continued cuts in the funding of universities and lower projections of growth in student numbers and research grant income.
"We had plans to expand but then we were capped. The Government insists we should make three per cent efficiency gains each year and the amount of funding per student is being cut back.
"We are not in crisis and we are not panicking, but we are alerting our staff to an issue which is bound to come up as a direct result of government policy. Our reserves are not substantial. We will run into deficit if we do not curtail our expenditure."
Unless Essex can generate additional income to cover the deficit, which represents 1.2 per cent of the university's turnover, it will be be forced to suspend a number of projects and cutback on investment on the campus, near Colchester.
Proposals prepared by the institution's finance committee include reductions in the university's five-year capital building plan, a significant reduction in spending on refurbishment of the science laboratories. Plans to relocate the biology department from an annex to main campus may be delayed until after 1999 and a move to rehouse the students' union will be shelved for two years.
A decision on whether or not to extend library facilities will be taken after the university learns of its funding settlement when recurrent grants are announced by the Funding Council on Thursday.
Professor Johnston said there would be no redundancies among the 15,000 staff, including 320 academics, as other universities have been forced to do.
Professor Ivor Crewe, who has been professor of Government since 1982 and is currently pro-vice chancellor (academic) at Essex said:
"Of a hundred or so universities I would estimate that only 20 are in a really healthy financial situation. The difference with Essex is that it is more honest about its finances and does not believe in hiding information from its academics.''
The financial squeeze or "efficiency drive" has already had an effect on teachers and students: "Lecturers are working very long hours, there are more classes and whereas before where we used to ask students to read six core books from the library, because of a lack of multiple copies, we are having to rely more on text books,'' said Professor Crewe.
In the Sixties, Essex enjoyed a reputation as a hotbed of student unrest and Marxist sociology but by 1989 it had received the accolade of "the most academically distinguished university in Britain for its size'' from the Times Higher Educational Supplement.Reuse content