New financial accounts reported by LSU to the Charity Commission this quarter report that the Students’ Union spent a total of £294,004 on a review of its organisational structure to “reduce its overall cost base” and “reorientate its staff team” during the 2018-2019 financial year.
The expenditure comes at a time of increased financial strain on the union, which is still reeling from being forced to cut a deficit of over £2.8 million in the 2017-18 financial year to one which now just stands at just under £250,000.
The costs related to the “review of the organisational structure”, despite being significant, have been justified by the Union’s Board as to ensure that “the right people were in place to deliver an exceptional Students’ Union”, although critics have labelled the additional expense as unnecessary.
A spokesperson for the Union told Label that “the costs associated with LSU’s organisational restructure are attributed primarily to our legal obligation in respect of … redundancy payments that occurred as part of that process.”
The report also revealed that the highest paid member of staff at the Union received a six-figure salary of up to £110,000 annually, almost double the next highest paid employee. LSU argues that this is “in line with market averages”, was “agreed with both Loughborough University and LSU’s Board of Trustees” prior to advertisement, and in fact “refers to a previous employee of LSU”.
At the same time, the number of staff on the Union’s payroll decreased from 411 to 360.
Expenditure on student activities were also hit by the need to cut costs, with spending on activities for members like the LSU Sections, clubs and societies reducing by over £350,000, although spending on support services including Advice and Representation increased “following a year on year increase in students wishing to access the service.”
The Union told Label that although a reduction in spending on student activities did occur, this was to help encourage “all departments across the organisation to move towards a more sustainable funding model through avenues such as fundraising and sponsorship agreements” which will “allow LSU to continually increased [sic] participation levels, across all areas, within a limited funding model.”
Many of the changes in the report highlight the recent incorporation of LSU as a company limited by guarantee, reducing the liability for board members who previously would have been entirely responsible for LSU’s financial actions. This results in a change in the reporting period, meaning the figures for the 2018-19 financial year cover a 13-month period until the 31st August 2019.
The full report can be found on the Charity Commission website here.
