Property deal 'leaves union £3m in debt'
‘Ill-advised’ sale puts UCU in jeopardy, former trustee claims
The University and College Union must make significant savings if it is to survive being saddled with a “substantial debt” by an “ill-advised” property deal, a former trustee has claimed.
Long delays in the sale of one of the UCU’s former London headquarters have cost the union about £2 million in rates, maintenance, insurance and loan costs since 2008. However, the deal is at last set to go ahead after planning permission was granted to turn the offices into student accommodation.
But according to Fawzi Ibrahim, who retired as one of the UCU’s trustees in June, the union will receive at least £500,000 less than the £12 million originally agreed with developers. The union will be left “around £3 million” out of pocket, Mr Ibrahim claims, and could be forced to make redundancies in order to balance the books.
General secretary Sally Hunt insisted that no “crisis management” was necessary and that the sale, if ratified, would cover the full £9.5 million balance of the bridging loan the UCU took out to pay for its current premises in Carlow Street, Camden. She refused to confirm or deny Mr Ibrahim’s figures.
But with its membership falling by 4,000 over the past 12 months, Ms Hunt said she would have to “look quite carefully at the union’s finances and its structures” to preserve its financial health.
Mr Ibrahim served for 24 years on the national executives of the UCU and the National Association of Teachers in Further and Higher Education (Natfhe), which in 2006 merged with the Association of University Teachers (AUT) to form the UCU. He has been a consistent critic of the UCU’s decision in 2008 to sell off the two London buildings inherited from its predecessor unions to fund the purchase of its current base. Ms Hunt has said that the buildings were “not fit for purpose” for UCU.
While the AUT headquarters in Tavistock Place was quickly sold off, the deal for the Natfhe premises in Britannia Street has been held up by planning wrangles after objections were raised by English Heritage.
“The property market wasn’t in a good position and the rush in which this went through was incredible,” Mr Ibrahim said. “It was ill-advised. I reckon there will be, even after selling the property, around £3 million debt.”
Mr Ibrahim warned that a rise in interest rates could jeopardise the union’s finances, forcing it to merge with another union to survive. “The situation can be salvaged but, if it’s left and nothing happens, (the debt) is too big. It needs to be resolved by the next budget. They have a substantial debt and have to pay a lot of interest on it. Staff is the biggest expenditure; they will have to bite the bullet.”
Ms Hunt told TES that Mr Ibrahim had been “thoroughly indiscreet” about the UCU’s finances and that his “distinct and individual” view was not shared by union leadership. She said the “long and tortuous” process of selling Britannia Street had been a “drain on our resources” and that the sale would “release a serious chunk of money”.
“We will clear the monies we borrowed from the bank to buy (Carlow Street),” Ms Hunt added. “Does this mean I think we’re completely financially in the pink? No, I don’t think it does.”
Admitting that the union’s membership had dropped by about 4,000 over the past year, she said. “We have to face up to that. But is it about crisis management? No, it’s about sensible planning, which we’ve done for the past few years. I don’t think it would help anyone if I said that people aren’t leaving or everything’s fine, because that’s a lie.
“Equally, what I don’t want is for people to be panicked or think we’re not delivering on what we’re doing … We are, we’re doing fine. I need to make sure we use the here and now to make sure we’re still fine in 12 months’ time, in two years’ time, in five years.”
Photo credit: Alamy
Original headline: Long-delayed property deal ‘leaves union £3m in debt’