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BLAKE MORGAN MERGER FOR EDUCATION SECTOR
A new law firm has launched as Blake Lapthorn and Morgan Cole merge with a combined annual turnover of £72m and 120 partners, making a total workforce of approximately 900 spread across southern England and Wales. The combined firm is
a leading advisor to the education sector, already acting for almost 150 state maintained and independent schools, academies, colleges and universities, including several of the Oxford Colleges, Cardiff University, Oxford Brookes, Bristol, the
Universities step up expansion in cautious market
Despite wariness about the financial and regulatory environment, universities are set to unleash investment in teaching and student facilities as competition for student numbers increases, according to a survey by Deloite, the business advisory firm. Deloite’s annual survey of higher
education finance directors gauged the views of 48 finance directors of UK universities, representing over one-third of the UK higher education sector. The research found that 36% of finance
directors are less optimistic about the financial prospects of their university than 12 months ago. It also highlighted that 89% said
there is an above normal, high or very high level of financial uncertainty facing their university and 57% say now is not a good time to be taking risks onto their balance sheets. Almost three-quarters (74%)
expect operating costs – such as staff, pensions, student support services and maintenance – to increase, up from 69% in 2013. However, 83% of finance directors say
“The education sector is undergoing transformation at all levels... institutions are having to revise the ways they operate, root and branch”
University of South Wales, Swansea, Winchester and Reading. Alison Talbot, Head of
Blake Morgan’s education practice, commented: “The education sector is undergoing transformation at all levels. With the reforms put
in place by government – especially at secondary and tertiary levels and increased across-the-board regulation in fields such as information governance – institutions are having to revise the ways they operate, root and branch. With the merger, we at Blake Morgan believe we are well placed to support clients through this ongoing change.”
they will increase capital expenditure in the next year, up from 43% in 2013’s survey. Finance directors say that 61% of capital spending will focus on teaching facilities, 18% on research facilities and 15% on improving students’ experiences, such as student unions and sports facilities. Only 4% will be focused on student accommodation. To fund this spending, universities
are looking for additional finance. Almost half (45%) of finance directors say they expect a moderate increase in their need for credit in the next 12 months, while 13% say there will be a significant increase in credit. Finance directors did, however, report that credit was both easily available and at a lower cost, with 57% forecasting an increase in bank borrowing, 51% plan to increase bond issuance and 63% see increases in financial leverage. Almost three-quarters (72%) of
research-intensive universities said that increasing philanthropic income was a priority, compared to 40% for teaching- led universities. Deloite’s survey also found that 33% of university finance directors believe
W:
www.universitybusiness.co.uk | T: @UB_UK
that government policy on international students has a negative impact on the higher education sector. However, only 5% were concerned about the effect on their institution. On the removal of the cap on AAB/ABB
students, which takes effect from 2015/16, 42% said this will have a positive impact on their institution while 28% said it will have a negative impact. Julie Mercer, head of education
consulting at Deloite, said: “The results of our latest survey suggest there is a ‘prudence paradox’ affecting the higher education sector. “Finance directors are wary of the
financial environment and favour strong financial management over risk-taking. But, at the same time, ambition and investing for growth are both needed. As such, risk taking is a necessary strategy for universities.”
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