This article was first published in the July/August 2016 UK edition of Accounting and Business magazine.

John Cunningham, finance director of Manchester Metropolitan University, recollects clearly why he chose to be a finance professional in higher education. ‘I wanted to work in an environment that promoted the positive, social, economic and transformational impacts that education provides,’ he says. That motivation remains true for Cunningham today, despite the fact that the structure and funding of higher education since he joined the sector has gone through revolutionary change. 

Loans, not grants

The replacement in 2012 of direct grant payments with a new student loan and tuition fee regime was designed to enhance competition. ‘The government was explicitly seeking to create a market in higher education,’ Cunningham explains. ‘Tuition fees moved the university from being largely reliant on government grant to needing to directly earn that income. So we need to attract and maintain income from students and ensure we are meeting their needs.’

Universities now find themselves having to treat students as customers, personalising services to their needs and ensuring a positive student experience. This means more than providing high-quality teaching and supporting academic achievement. Manchester Metropolitan has upgraded its campus and put in longer-term and more strategic investment planning. Students demand excellent lecture rooms and fast broadband, both on campus and in student accommodation. 

While some universities leave student housing to the private sector, Manchester Metropolitan believes accommodation is an essential part of students’ experience and an important factor in their choice of university. It owns 1,922 bed spaces for students and manages another 1,984 through leases. 

‘Good-quality housing helps with student success and retention,’ Cunningham says. ‘A lot of students are looking to make friends in a safe, social environment. They are looking, if possible, to be within close walking distance of campus. We can offer much more than private sector accommodation providers can. We may not match the private sector at the premium end of the market, but we can beat them on the student living and learning environment.’

A 10-year estates rationalisation programme has seen Manchester Metropolitan consolidate its presence to Manchester and Crewe, reducing seven campuses to two to make it easier and more pleasant to move around the university. The initial phase of the consolidation cost £350m, funded mostly through internal cash balances, with some capital grant from the Higher Education Funding Council for England (HEFCE). About 10% of the capital cost was raised from bank lending.

Some 80% of the university’s funding comes from tuition fees and education contracts, but Manchester Metropolitan is keen to diversify its income base. It wants to increase international student numbers: 5% of its students come from overseas, compared with a sector average of 13%. It is developing relationships with international partner institutions carefully to ensure they meet its quality threshold.

Well connected

Manchester Metropolitan has built up several commercial relationships in recent years. ‘We need to attract other funders,’ explains Cunningham. ‘We have quite a healthy CPD and bespoke education programme, working with Goldman Sachs, Tesco, HMRC, the Law Society and a number of other global commercial bodies such as HSBC and GSK.’

The university is also developing research and teaching opportunities with Manchester City FC.

Manchester has great strengths as a location. Its two Premiership football clubs and its music scene have made it a globally famous city. It has more students than any other city in Europe, with the University of Manchester literally next door to Manchester Metropolitan. 

But even though the latter is a ‘new university’ – before 1992 it was Manchester Polytechnic – and the University of Manchester is a member of the prestigious Russell Group, there is no inferiority complex at Manchester Metropolitan. 

‘We have a rich history and can trace our roots back to 1824,’ says Cunningham. ‘In some areas they’re our competitors; in others they’re not; and in some areas we work in partnership. The nature of the universities is different. The demographics of many of our students is different, but there is an element of differentiation both between us and within the market. 

‘We are a large full-service modern university offering a breadth of courses that can only be matched by a small number of UK universities. 

‘Our business school is very important to us. It is rightly recognised as part of an elite global group of business schools with the prestigious AACSB [Association to Advance Collegiate Schools of Business] accreditation. It is an institution in itself – virtually the size of a small university. And for international students, it offers business and management programmes that are particularly attractive.’

Private outlook

Manchester Metropolitan is not worried by private sector competition eating into its business. ‘It is making us more business-like and commercially minded, but we must remember we are not a private business,’ Cunningham argues. ‘We are a university business. We are not here to generate a profit to go to shareholders. Any surplus we create is reinvested on our intellectual capabilities and in our mission – in our staff and our students.’

Yet Cunningham recognises the need to adapt and innovate. ‘We are sector-leading within the new area of degree apprenticeships,’ he says. ‘We also have an opportunity to do more with online learning and with our external engagement with businesses and SMEs.’ Manchester Metropolitan is particularly keen to develop its education offering. ‘It is a marketplace that can be better developed in terms of what the university can offer.’

The postgraduate market generally is an exciting one. Cunningham explains: ‘We are on the cusp of change there, with the introduction of loans for postgraduates. Student loans are embedded now for undergraduates and demand hasn’t slackened; in fact, it is buoyant. Part-time postgraduate is another market opportunity.’

Cunningham describes his career development as being enabled by ‘an in-depth understanding of the business, strong people skills and being forward-looking, challenging but supportive and solutions-driven’. It is an approach that has served him well and would, he suggests, be equally useful to others who want to reach the top of the university finance profession.

Paul Gosling, journalist