Financial management and planning in higher education institutions
The aim of this dissertation is to examine whether there is a better way in which higher education institutions might approach financial management, including the way in which they choose to allocate resources within their institutions. Why do I ask this? On the basis that higher education institutions exist not only to educate students, but also to contribute to the development and furtherance of knowledge, as well as making a contribution to the national economy in terms of expertise and commercialisation of intellectual property, I considered the way in which my own institution addressed these issues from the perspective of seeking to ensure that the resources available to it were allocated in a manner that may best facilitate the achievement of these objectives. I was not convinced that my own institution’s relatively ‘simple’ model of allocating resources in relation to student numbers, based on the model used by the Higher Education Funding Council for England (HEFCE), was the best way of achieving the objectives set out in the preceding paragraph. A number of questions sprang immediately to mind. How does the model address the issue of quality? How does the model address the achievement of the institution’s strategic objectives? How does the model address the issue of directing resources to areas identified as key to the institution’s academic offering? The list was endless. The dissertation draws on my own experience across a range of sectors, and I chose the National Health Service as a comparator group that exhibits many of the characteristics of higher education institutions. It is a large consumer of public resources, is labour intensive, and needs to prioritise the allocation of resources to deliver strategic and national objectives. In light of this, I believe that it is legitimate to draw on the experience of the review of the National Health Service from 1974, particularly in the 1970s and early 1980s, that review being based on the applicability of two financial management techniques, Rationalism and Incrementalism.