Financial challenges at Tech

Tech is facing a financial imbalance that needs to be dealt with. The faculty management team has worked intensively to find sustainable solutions to secure TECH's finances in the long term. 

The financial challenges mean that all the faculty's departments must reduce costs and increase their revenues to ensure financial balance. Reductions in building costs, joint costs, the administration and the PhD pool have been found, and further preventive measures will also be examined. Unfortunately, this will probably entail redundancies at several departments. It is still too early to say anything about the number of redundancies involved, as this depends on the number of voluntary resignations and what savings can be found in other areas.  

“We take the situation seriously, and the faculty management team is working closely together to find possible solutions to our financial challenges, with focus on a proper, honest and timely process that can future-proof Tech. With the financial adjustments, we expect to be able to achieve financial balance at TECH in 2022,” says Eskild Holm Nielsen.  

Everyone at Tech will have to help to solve these shared financial challenges. Departments associated with both the public authority area and the engineering area will have to make financial adjustments, even though they come from different points of departure. 

The environmental and food-related departments must be in financial balance  

There is a financial imbalance at the departments associated with the public authority area, primarily due to long-term political cutbacks. The grants for public sector consultancy have been cut back by 2% per annum for some time, while salary and price adjustments in the area have been lower than the other Finance Act revenues. Over the same period, the departments have earned more than DKK 100 million in basic research, but in future growth will be small.  Overall, this means that the framework agreement for the area has been cut by approx. DKK 150 million since 2009. In addition, an extraordinary contribution of compensatory funds from the other faculties in 2020 and 2021 will lapse from 2022. 

When approving the budget for 2021, the senior management team and the board decided that the public authority area should break even. Public sector consultancy is an important task for Aarhus University and it is crucial for society, but given the above framework conditions, it is necessary to balance the revenues and expenses for the public authority area.

To establish balance from 2022, we have to find savings of approx. DKK 50 million in the public authority area. The faculty management team has found savings of DKK 15 million by reducing building costs through better utilisation of space, as well as reductions in joint costs, administration, and the faculty's PhD pool at the environmental and food-related departments. This includes an expected cost reduction in the Nat-Tech Administrative Centre of approx. DKK 3 million. This leaves a total of approx. DKK 34 million to be found at the departments.

The liaison committee, and management and staff groups will now work on finding the right budget and activity adjustments, including task prioritisation, cancelling tasks and closing jobs. It is unlikely that we will be able avoid redundancies in some departments to achieve financial balance.   

We expect that the above initiatives will return the environment and food-related departments to financial balance from 2022. 

The engineering initiative will have more time for implementation in order to ensure financial balance

The rollout of the AU engineering initiative is well underway. The aim of the initiative is to meet society's demand for qualified engineers and to ensure technical scientific research for solutions to societal challenges.

Among other things, the engineering initiative entails an increasing intake of engineering students. This requires recruitment of more academic staff, as well as a need for more space for the increased numbers of students and staff. However, as educational revenues and external funding are realised with a time lag, these growth factors will lead to an imbalance between costs and revenues. At the same time, realisation of the target figures in the engineering initiative has been delayed, both because of AU’s institutional accreditation, and because of increasing competition from other higher education institutions for student intake on engineering degree programmes.  

Finally, an extraordinary contribution from the other faculties in 2020 and 2021 will lapse from 2022, and the university's strategic funds (USM funds) for the engineering initiative of DKK 20 million per year will lapse at the end of 2024. 

Overall, these factors mean that the engineering area is also under-financed.

As AU still aims to grow in the engineering area, the board has decided that there is a need to financially secure realisation of the strategic engineering initiative, and therefore it has allocated new university strategic funds (USM) to the initiative permanently.  

Overall, finances will grow by approx. DKK 100 million from 2021-24. However, there is an imbalance of DKK 20 million in the budget for 2021-2024. TECH therefore has to find permanent savings of DKK 20 million in the period 2022-2024 at the engineering departments, with effect from 2022. The faculty management team has found reductions of DKK 11 million in building costs, joint costs, the administration and the PhD pool.  This leaves approx. DKK 8 million in savings in the four engineering departments. With these initiatives, the engineering area is expected to achieve a balanced budget from 2024.  

We will find the solutions together 

Even though the starting points are different, with the upcoming initiatives, all units will help adjust TECH's finances, so that we can continue to pursue the strategic goals for the faculty.

"We need to establish long-lasting financial solutions, so we have a good starting point for strong research results and to stand strong in national and international competition. With our extensive academic expertise in so many areas, we have a unique opportunity to create synergies across the departments. This puts us in a good position to contribute to society's needs by educating talented graduates, coming up with technological solutions and researching into solutions for the green transition. Furthermore, we have an unexploited potential in external funding, which is fundamental for our future financial balance and stronghold,” says Eskild Holm Nielsen. 

The Faculty Liaison Committee has been informed by the dean about the budget challenges for 2022-2024, and the Faculty Liaison Committee has had time to discuss budget challenges and come up with proposals for savings to help minimise redundancies. The same will apply for the local liaison committees at the individual departments in the next part of the process.

On this webpage all the most important information about the upcoming process has been gathered (please note that the site is only available via VPN, as it is IP protected). 

See also the news article from AU's board (in Danish only)