How many redundancies are Sheffield University’s management planning to make in Archaeology?
In a recent blog post, we explained how the financial information used in the review of Archaeology and published as part of a Freedom of Information request indicate that the University would be better off in five years’ time were it to keep the department open and invest in four new posts. But this revelation is not the only nugget lurking within the figures, which also contain both an indication of the possible levels of redundancy under consideration and what looks like a worrying standard of financial analysis underlying our university’s decision-making.
By comparing the figures from the three different scenarios in the review document (investment, full closure, and the selected option of ‘closure and realignment’), we are able to draw inferences on what the nebulous ‘closure and realignment’ option may mean for staffing levels.
In the case of full closure of the department (by far the worst financial decision the University could make), there are two rows relating to staffing levels. One shows the projected costs relating to redundancy payments, and another the cost savings due to the reduction (to zero) of future salary payments. Redundancy payments are projected to start at £360k in 2022/23 and tail off to £144k by 2024/25, and zero thereafter. Cost savings move in the other direction: £775k in 2022/23, increasing to £1.7m by 2025/26.
The interest comes not so much from the magnitude of these numbers than from the comparison with the case that UEB decided to pursue of ‘closure and realignment’. Here, both the redundancy payment and cost saving rows are around 80% of the figures for full closure (precisely so, in the case of redundancy payments). In other words, the ‘closure and realignment’ model used in the decision-making assumes 80% of staff (by total payroll) being made redundant.
Does this mean that the University is planning to make 80% of those currently working in Archaeology redundant? Possibly. But there are other potential explanations. It may be, as the University has indicated to us, that the 80% figure is a prudent upper-bound for the number of redundancies, something of a worst-case scenario.
So, is it prudent to use a figure relating to an upper-bound for redundancy numbers in the financial projections? Not if one uses this same proportion to also adjust the cost-savings! Since the figures for cost-savings are larger than for redundancy payments, using an upper-bound for the proportion of job losses to adjust both sets of figures results in something far from a prudent financial projection, since the gains from the cost-savings outweight the redundancy costs. A lower proportion (a half? a quarter? a fifth?) would be more financially prudent. Over-estimating the number of staff likely to be made redundant boosts the financial summary statistics for the ‘closure and realignment’ case, potentially making it more appealing to decision-makers.
Were the University to take a genuinely prudent approach to modelling potential redundancies in its projections, it would use an upper-bound when calculating the redundancy payments and a lower-bound in the cost-savings. This would skew the figures for UEB’s chosen scenario significantly for the worse. Using, for example, a figure of 80% for redundancy payments and 20% for cost savings would show the ‘closure and realignment’ option as leaving the University over £4.3m worse off over five years (up from the £1.6m in our previous analysis) as compared with investing to keep the department open. It would also push up the projected departmental deficit for that scenario in each of the years from 2022/23 onwards, above those forecast in the situation that the department remained open.
We do not know whether UEB is planning to make 80% of staff in Archaeology redundant, or whether they believed the figures represented a prudent estimate for the purposes of decision-making. As the University of Liverpool’s UCU branch has shown in its successful recent dispute, one compulsory redundancy is one too many, and members are unlikely to tolerate any threat to jobs. A plan for 80% redundancies in the department will pour petrol on a ballot for industrial action. On the other hand, if the calculations were intended to be a prudent approach to financial planning, then they raise serious questions over the quality of the decision-making at the University and, ultimately, the soundness of basis on which the decision to close Archaeology was made.