University finance in a period of rapid inflation

Universities are labour intensive and particularly liable to suffer in periods of cost inflation. An index has been derived to show that between 1965 and 1974 university costs increased more rapidly than other prices.The article shows that linking university budgets to cost indexes is not a complete answer to the problem. However universities often do not help themselves by maintaining that standards must be preserved at all costs. All these problems have been exacerbated by the end of the rapid expansion of the 1960s and 1970s.In the final section some steps are suggested which can help universities to soften the blows caused by inflation and government attempts to cut public budgets for higher education.A condensed version of a paper written for the Conference of Executive Heads of the Association of Commonwealth Universities at Wellington. New Zealand, February 1976.