Faculty of Technical Sciences to save DKK 70 million – layoffs unavoidable

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The Faculty of Technical Sciences is looking at big budget cuts, especially within the area of public sector consultancy. This is in part due to years of 2% cuts to public sector funding and a delay in engineering investment, which is also subject to changes in the governing financial terms.

2021.04.14 | Trine Marie Vestergaard & Marie Groth Andersen

On Monday, the Dean of the Faculty of Technical Sciences Eskild Holm Nielsen had to notify employees at an online meeting of the DKK 70 million budget cuts. These will inevitably lead to layoffs at the faculty – both at the departments and from the administration. Archive Photo: Melissa B.K. Yildirim/AU Photo

Expected cuts at the departments

Areas working in public sector consultancy:

  • Department of Bioscience: DKK 8.5 million
  • Department of Environmental Science: DKK 7.5 million
  • Department of Agroecology:  DKK 10 million (in real terms, the cuts are only DKK 7.5 million because other savings have already been identified)
  • Department of Animal Science:  DKK 5 million
  • Department of Food Science:  DKK 1 million
  • Center for Quantitative Genetics and Genomics:  DKK 1 million
  • DCA – Danish Centre for Food and Agriculture:  DKK 0.5 million
  • DCE – Danish Centre for Environment and Energy: DKK 0.5 million

In total, DKK 34 million

Engineering:

  • Department of Mechanical and Production Engineering:  DKK 1 million
  • Department of Biological and Chemical Engineering:  DKK 2.5 million
  • Department of Electrical and Computer Engineering: DKK 3 million
  • Department of Civil and Architectural Engineering: DKK 1.5 million

In total, DKK 8 million

Documentation:

On Monday afternoon, the Dean of the Faculty of Technical Sciences (TECH) Eskild Holm Nielsen explained to the faculty employees that they are facing into a round of big budget cuts. More specifically, the faculty has to make savings of DKK 70 million. The dean also told them at the meeting that the management expects to see redundancies at the departments and from the administration in order to achieve the necessary savings. 

”It’s true that layoffs at the faculty are unavoidable and that we’re facing into necessary budget cuts. But I would like to nuance the picture and to emphasise that the faculty is in a state of growth. Especially within engineering, where revenue is strong. But at the same time we have to control our costs so that we can achieve a balanced budget,” said the dean of TECH, Eskild Holm Nielsen. 

Won’t put a number on the total layoffs

The dean declined to put a number on how many employees will be made redundant as a result of the budget cuts.

”It’s too early to tell at this point. It will be inevitable that we’ll have to say goodbye to some colleagues at some of the departments. But it will differ from department to department in relation to how the financial situation is dealt with, and which possibilities are available to implement measures to prevent redundancies or to attract more funding,” he said. 

Some departments will be hit harder by these budget cuts than others. The Departments of Bioscience, Environmental Science and Agroecology all have to save between DKK 7.5 and 10 million, while the Department of Food Science and the Department of Mechanical and Production Engineering have to save DKK 1 million each.

Cuts of DKK 70 million

As mentioned before, the entire faculty has to find ways of saving DKK 70 million in order to balance the 2022 budget. Savings of DKK 50 million have to be made within the area of public sector consultancy work, while the remaining DKK 20 million has to come from the engineering departments. 

Already within the area of public sector consultancy, the faculty management team has found possible savings of around DKK 15 million, which includes reducing building costs, common costs across the faculty and administration costs. But it has now been confirmed that an additional DKK 34 million has to be cut from the budget within the area of public sector consultancy. 

Within engineering, savings of around DKK 11 million can be made by cutting building expenses, common costs across the departments as well as administration costs and reducing the amount of funding available to PhD students. On top of this, more savings to the tune of DKK 8 million need to be found.

Cuts to public sector consultancy and delay in engineering investment

The deficit in the budget at the faculty is in part due to the reduced income from public sector consultancy work. This relates to the annual 2% cuts that the government has imposed since 2009.  

But there are other reasons for the deficit. Objectives for an engineering investment, which were adopted in 2016, have not yet been realised. There were expectations that by 2021 the student intake to the various engineering programmes would be at 1,400. But so far it hasn’t been possible to attract so many students, and therefore, this intake objective has been pushed to 2025. The delay in achieving this objective has been attributed to two things: AU’s institutional accreditation and an increased competition for students within engineering programmes. At the same time, the governing financial terms have changed. These changes are discussed in a news article (in Danish) by the University Director Arnold Boon:

”Establishing the new study programmes was delayed by two years. This is due to the institutional accreditation, but the ministry’s 2018 funding reform also brought huge challenges for new study programmes. The reform meant that new student FTE funding was reduced by one-third. In addition, the basic subsidy is determined on the basis of the original number of students and is only adjusted every four years and only under certain conditions. Furthermore, the ratio between basic research funding and education revenues on the one hand and external funding on the other is significantly lower in engineering than in other areas at AU,” said Arnold Boon.

Millions for engineering investment – public sector work should ’balance itself’

In 2024, the engineering sector will have a deficit of DKK 44 million, and when the senior management team’s strategic funds (USM) of DKK 20 million run out, the deficit will increase to DKK 65 million from 2025. But even though the budget shows a deficit of millions of Danish kroner in the coming years, the departments at engineering will not be subject to huge savings like in the public sector areas. 

The management decided to contribute to the engineering discipline with subsidies worth millions from the USM funds, which the board accepted. In 2023, DKK 12 million will be allocated, and in 2024 this will rise to DKK 25 million, while the amount will increase to DKK 45 million annually from 2025. The grants from the USM funding will be reduced as the engineering discipline earns new basic research funding.

While the management is contributing millions to engineering investment, it’s a different story for the area of public sector consultancy. Here, the senior management team has decided that the discipline ‘should balance itself’. In other words, the senior management team will no longer be offering this area a financial helping hand.

Regarding the question of why the management team supports contributing to the engineering investment on the one hand, while on the other they have decided to let the public sector stand on its own two feet, the dean Eskild Holm Nielsen noted:

”I don’t think you can phrase the question quite like that. We’re talking about two different situations. The board decided to contribute funding to establish a long-term financial support for the engineering area at AU until there is a supply of more public basic research funding. The situation is different when we talk about public sector consultancy. Here, it’s an operational situation in which the annual 2% cuts and growth in costs exceed the normal adjustment,” said the dean. 

Like Arnold Boon mentions, the newly-created engineering departments are challenging in relation to securing public grants. The model for awarding basic funds is slow to adapt, which means that the growth in basic funds for the engineering area is moving slowly from year to year. And it is during this period that the board and the management team will contribute to the discipline, until engineering can be independent in terms of generating enough revenue itself.  

Signal to the politicians?

Like you mention yourself – for a long time now the public sector area has been subjected to yearly cuts of 2% from the political side. With the planned savings at the faculty, is the management at AU also sending a signal to the politicians that enough is enough?

”No, we’re not sending political signals when putting the budgets together. We’ve managed to fill this deficit in 2019, 2020 and 2021, but we can’t stretch our budgets like that anymore,” said the dean Eskild Holm Nielsen.

He points to the fact that the contracts in the public sector area need to be renegotiated with the ministries during spring, and here the faculty will push for a stop to the cuts from politicians.

”It’s inevitable that we need to stop the 2% cuts, but even doing this doesn’t solve our current problems. We also need the politicians to allocate more grants to us, and naturally we’re working on this,” said Eskild Holm Nielsen.

The dean worries that if this doesn’t happen, the research-based public sector consultancy work will be undermined, which he would find all the more disappointing given how strongly AU has performed in these areas.

”Concerning the areas of agricultural sciences and environmental sciences, we’re in a strong position. This has somewhat compensated for the continuous political cutbacks in this area.” 

Feeling discouraged

Joint union representative Olav W. Bertelsen participated in both the employee meeting on Monday and the unscheduled meeting of the Main Liaison Committee, where employee representatives were informed of the imminent cuts. Olav W. Bertelsen and the other union representatives felt discouraged when thinking about how everyone will get through this situation. 

”It’s an announcement that shows that management is still looking at ways to handle these cuts. From the details it appears that there will be quite a serious reduction in personnel. As the union representative, I’m concerned about the process, which my colleagues at the departments affected will be a part of. In the announcement, the cuts are presented as big numbers, but we must remember that behind these numbers are people employed at the departments who also have lives to live,” said Olav W. Bertelsen.

One of the worries among the union representatives is that employees will feel discouraged and end up leaving to find new pastures, explained Olav W. Bertelsen: 

”I’ve heard concerns from several people that if members of staff experience severe cuts, they might think of other opportunities outside of their research areas. That would be a shame, because it’s not possible to just ring these people up again in a few years’ time and ask them to come back,” said Olav W. Bertelsen and added:

”Therefore, it’s now going to be a big task for the department heads to establish hope among employees.”

Strange and paradoxical – cuts made to areas that will contribute to solving climate problems

In relation to the management’s decision to assign USM-funding to engineering, while the public sector area is not getting any help from management to get through these cuts, Olav W. Bertelsen thinks that prioritising one over the other is in reality out of AU’s hands, because the future prospect of public sector grants doesn’t look great.  

”Also, it’ll be punished twice – when there are fewer basic contracts, the possibility of external financing is also reduced. Future prospects for the area of public sector work look pretty grim. At engineering, however, future prospects are more promising, even though things haven’t gone to plan. We can look forward to increasing education grants, while at the same time the departments can build up basic research funding,” said Olav W. Bertelsen and added:

”The thing that is strange and paradoxical is that we have a government who says that we should find technical and scientific solutions to climate problems, and then they make cuts to environment and food research – the research areas where we can find these solutions,” he said.

Layoffs will be done appropriately – and not over Zoom

The next milestone in the process is 10 March, when employees will be told about the financial situation at the individual departments, including how many positions will be lost. And it’s a strange thing having to implement savings and not least layoffs during the corona pandemic, informed the dean. 

”It’s very unfortunate that this is all happening in the middle of lockdown, and there’s a concern that we can’t have a physical meeting and it would be online like today’s meeting. But it’s comforting that more than 1,200 of the 1,500 members of staff at the faculty, who are spread out geographically, were able to attend the meeting today via Zoom.”

The dean also emphasised that this is a ’critical situation’, which means that there might be a possibility to meet face-to-face, if it is deemed necessary. However, all guidelines and current restrictions will be followed, including a limit on the number of people who can gather in a group. And when it comes to layoffs, these will not be done over Zoom or via a letter in the employee’s electronic mailbox (e-boks), the dean pointed out.

”Things will be done appropriately. That is very important, I find,” said Eskild Holm Nielsen.

Translated by Marian Flanagan

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