TUAS Ltd to start co-operation procedure
Cuts in central government transfers to local governments as one of the key factors behind the decision
Turku University of Applied Sciences Ltd will start co-operation procedure due to financial and production-related grounds. The co-operation procedure will apply to all TUAS faculties and the administration. The savings target in personnel costs set for 2015 is approximately EUR 2.5 million.
“We want to ensure that TUAS continues to be an institution which provides high-quality and result-oriented operations. Our staff is committed, and the development of TUAS operations is our common goal also in this situation. The objective is to cut personnel costs by EUR 2.5 million, approximately equivalent to 40 person-years, by way of retirement arrangements, relocation, shifting to a part-time work, and potential redundancy of staff members. The intention is to execute the necessary actions starting at the beginning of 2015 at the latest,” says Managing Director Sami Savolainen.
Number of students will be reduced due to cuts
Due to a decision by the Ministry of Education and Culture, study places at TUAS were cut by 177 places, which equals 9.5 per cent of the total number of study places targeted at the young. Due to decisions, degree programmes in Music, Beauty and Cosmetics, Hospitality Management, Sustainable Development, and in Fisheries and Environment were discontinued. Furthermore, cuts were made in the degree programmes in Design and Business Administration, and in the field of technology.
In autumn 2012, last students were admitted to the discontinued degree programmes. The number of students in the discontinued degree programmes and in the programmes where cuts were made will drop as the current students in these programmes will graduate.
Savings made last year are not enough
According to TUAS’ financial statement, as a result of the cost-saving measures executed last year, TUAS has achieved significant savings compared to the budget of 2013. Despite savings, the Company’s finances will continue to tighten, especially, due to the cuts in central government transfers to local governments.
The biggest cuts in central government transfers to local governments will fall on 2015 and 2016. For 2014, the cut in central government transfer to local governments is EUR 4.2 million and, for 2015, approximately EUR 3.1 million. Altogether, cuts in central government transfers to local governments are estimated to be EUR 8.1 million, which means a cut of almost 13 per cent to TUAS’ funding. Taking into account the saving opportunities of 2014, already made decisions and required additional decisions, the rapid decrease in government funding still requires permanent adjustments of the Company’s finances.
According to the current estimate, the savings target in personnel costs for 2015 is approximately EUR 2.5 million, which equals the portion of personnel costs of the total savings target.
Changes are permanent by character
The cuts in study places, based on the decisions made by the Ministry of Education and Culture in 2012, and the decrease in the number of students affect the number of needed teaching and non-teaching staff. Turku University of Applied Sciences Ltd strives for achieving the savings goals in all possible means by utilising retirement arrangements, reduction in the number of temporary staff, natural termination of employment contracts and relocation of staff.
The already executed cuts in the total number of full-time degree education is a permanent functional and productional change. Thus, the changes in the Company’s finances and operations are permanent by character, and the means for reducing workforce must be long-lasting. Therefore, the Company does not propose layoffs as a means of adjusting to changes. Most Finnish universities of applied sciences have executed or are executing at the moment similar measures.
Studying and other activities continue
Turku University of Applied Sciences has committed to guarantee that those students who are studying at the moment at TUAS are able to complete their studies in target time. Regardless of the co-operation procedure, studies and project activities will continue as planned.
“Despite the cuts, Turku University of Applied Sciences is fully able to ensure that its operations remain of high quality,” assures Rector Juha Kettunen.
Turku University of Applied Sciences Ltd, Managing Director Sami Savolainen,
tel. +358 505 59 0 489
Turku University of Applied Sciences, Rector Juha Kettunen, tel. +358 505 985 612