Staff at the Open University are preparing for job losses as part of a radical overhaul to try to secure the institution’s financial future.
The OU vice-chancellor, Peter Horrocks, told staff on Tuesday that a “root and branch review” of every aspect of the university’s operations was being launched to achieve savings of £100m from the annual budget of £420m, the bulk of which would be invested in a digital transformation programme.
He refused to say how many redundancies there would be but acknowledged that the scale of the changes would affect staff because they make up two-thirds of the OU’s operating costs.
“Inevitably there will need to be redundancies,” he told the Guardian. “There’s no hiding away from that. We will attempt to redeploy staff wherever possible.”
About £65m-£70m of the savings will be reinvested in the biggest transformation programme of the OU’s 48-year history; updating technology, redesigning curricula and retraining staff. The remaining £30m-£35m needs to be cut from the budget to secure financial stability in the face of looming operating losses due to funding changes, falling student numbers, competition and high fixed costs.
The OU, which has held a near-unique place in the UK’s higher education sector by offering distance learning courses to often older, employed people, is the latest of a number of institutions to warn of job cuts in recent weeks.
Last month, the University of Manchester announced plans to axe 171 jobs, blaming the uncertainty in the higher education sector caused by Brexit. Others include Aberystwyth, Bangor, Sunderland, Heriot-Watt and Manchester Metropolitan.
The OU’s finances have been hit particularly hard by the significant decline in the number of part-time students since the introduction of tuition fees, losing a third of students in the past decade.
Horrocks, formerly a senior figure at the BBC, outlined plans to transform the OU over the next two years into a digital-first institution: the curriculum will be streamlined and unpopular courses that struggle to cover costs will go.
“We want to transform the ‘university of the air’ envisaged by Harold Wilson in the 1960s to a ‘university of the cloud’ – a world-leading institution which is digital by design and has a unique ability to teach and support our students in a way that is responsive both to their needs and those of the economy,” he said.
“The OU will still be the OU. We will retain our core mission of offering higher education to all, regardless of background or previous qualifications. But we will be delivering it in a different way, matching future needs to future technology.”
The University and College Union, which represents higher education workers, said OU staff had little confidence in the plans.
“Staff are obviously concerned that the OU is hinting at job cuts,” the UCU general secretary, Sally Hunt, said. “These plans have no details and will do nothing to reassure staff.
“What we would like to hear from the OU is what these plans actually mean. Buzzwords around clouds and digital futures might work well for marketing purposes but mean little in the real world. How many staff will be affected and where?”
One senior OU lecturer, who asked to remain anonymous, said the announcement was worrying for staff.
“The significant redundancies that the VC talked about only increase the uncertainty we’ve been living with at the OU for months,” the lecturer said.
“Morale is very low and timescales for these changes have not been provided. We all want to provide our students with the best experience we can, but there seems to have been very little consultation with students about the proposed plans.
“The decommissioning of curriculum that’s deemed unprofitable – regardless of its quality or popularity with the students who take it – will affect student choice and the provision of certain subjects at a distance.”
The OU, which is based in Milton Keynes, employs 4,400 academics and support staff, plus 5,000 associate lecturers around the country. It has previously had to close seven of its nine regional centres. It has 170,000 students.
