Introduction - Finances 2011/12
This commentary draws attention to some of the headline figures and key points that emerge from the main tables. The information is displayed graphically where appropriate. It should be noted that where comparisons are made between the latest financial year and a previous year, the figures for the previous year are as re-stated in the most recent financial statements available; any exceptions are noted explicitly. They are not therefore necessarily reconcilable with figures for that year published in previous HESA volumes. However, it is understood that all such figures can be reconciled to the published accounts of the institutions. It should be noted in all tables, The Open University is counted as an institution based in England, although its funding now includes contributions from other administrations. The tables include finance data for The University of Buckingham, which is a non-publicly-funded institution in England and operates on a different financial year from the 1 August to 31 July financial year standard for the rest of the sector.
A comparison of the HE sector’s balance sheet at 31 July 2012 with that at 31 July 2011 (both as stated in the 2011/12 accounts in Table A) shows a £86 million increase in amounts falling due within one year while amounts due after more than one year have increased by £589 million. There was an increase of £9 million in debtors.
The value of tangible assets has increased by £1,248 million (4.1%), endowment assets have increased by £35 million (0.8%) and investments increased by £61 million (3.1%).
Income and expenditure
Table B provides a summary of income and expenditure for the last two academic years. The income of the HE sector totalled £27.9 billion during the financial year to 31 July 2012; this compares with £27.5 billion for the previous year. The surplus of income over expenditure decreased from £1,190 million in 2010/11 to £1,114 million in 2011/12, a decrease of 6.4%. However, when surplus is shown as a percentage of net income this has only decreased from 4.3% in 2010/11 to 4.0% in 2011/12.
To provide the context for these figures, Chart 1 (sourced from Table B) shows the HE sector’s surplus/deficit (re-stated for 2002/03 to 2010/11) for each of the last 10 years. These are cash figures to which no deflator has been applied. Data were returned to HESA for the financial year 1993/94 onwards; figures for these financial years are set out in earlier editions of this publication.
The number of institutions reporting a surplus or breakeven was 146 out of 163 in 2011/12 compared with 150 out of 164 in 2010/11 (sourced from Table 1). Deficits in the financial year 2011/12 were reported by 17 institutions and by 14 institutions in 2010/11.
Table C aggregates income and expenditure figures for institutions funded by each of the four UK countries’ funding councils. All four countries reported a surplus for the year 2011/12 and all but Northern Ireland showed a decrease as a percentage of their net income on the previous year. Chart 2 below illustrates change in surplus as a percentage of net income over the last three years (sourced from Table C).
Charts 3 and 4 below summarise institutions’ sources of income contributed by each source and the growth or otherwise over time (sourced from Table D).
Funding body grants represent 29.6% of total income. Tuition fees & education contracts represent 34.7% of total income. Total income increased by 1.4% from 2010/11 to 2011/12 and there was an increase across all sources except for funding body grants which decreased by 6.7%. The largest increases were observed in endowment and investment income (18.3%) and tuition fees and education contracts (7.8%).
The breakdown in Table D of income by source also shows the component of income arising from joint ventures, and the net income after removing this component.
Funding body grants
Institutional funds for academic and other purposes are allocated primarily by the Higher Education Funding Council for England (HEFCE), the Higher Education Funding Council for Wales (HEFCW), the Scottish Funding Council (SFC) and by the Department for Employment and Learning for Northern Ireland (DEL(NI)) acting as a funding agency for the four Northern Ireland higher education institutions. Some funds are also provided in England by the Department of Health (DH) and the Teaching Agency (TA). Table E provides a breakdown of funding body grants.
Tuition fees and education contracts
Table F provides a breakdown of income from tuition fees and education contracts by country of institution. The total income for tuition fees and education contracts increased by 7.8% this year to £9.7 billion from £9.0 billion in 2010/11. Income from full-time Home/EU domiciled undergraduate students provided 44.6% of the income in this category, and that from overseas (non-EU) students provided 33.5%. The total income from HE course fees varied by country as shown in Table F, as did the proportions by the type of fees as indicated in Chart 5 (sourced from Table F).
Research grants and contracts
Research grants and contracts increased by 1.7% in 2011/12 to £4.5 billion from £4.4 billion in 2010/11. The Research Councils continue to be the largest providers, representing 33.5% of total research grants and contracts income. Table G provides a breakdown of income from research grants and contracts.
Income in this category increased by 2.9% this year to £5.2 billion from £5.0 billion in 2010/11. Nearly one third (31.9%) of other income came from residence and catering operations (including conferences). Table H provides a breakdown of all other income.
Overall expenditure rose by 1.8% (£479 million) to £26.7 billion as shown in Table I. The largest categories of expenditure; other operating expenses and staff costs increased by 3.4% and 0.5% respectively. Chart 6 below shows the distribution of expenditure (sourced from Table I).
Academic departments accounted for 39.5% of total expenditure. Expenditure in all activity groups has increased from the previous year. Table J displays the distribution of expenditure across activity groups. Chart 7 below shows the growth of expenditure over time (sourced from Table J). Please note that the figures in Chart 7 are not restated figures as this data is not collected.
The total expenditure in academic departments in 2011/12 was £10.5 billion with academic staff costs accounting for £626 million. Table K shows expenditure by academic department group. Total expenditure of medicine, dentistry and health cost centres constituted 24.3% and administrative, business and social studies 22.4%. In all 9 departments the largest expense was academic staff costs, illustrated in Chart 8 below (sourced from Table K).
© Higher Education Statistics Agency Limited 2013