Introduction - Finances 2013/14

Finance data

This commentary draws attention to some of the headline figures and key points that emerge from the main tables and 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 publications. However, it is understood that all such figures can be reconciled to the published accounts of the HE providers. It should be noted in all tables, The Open University is counted as an HE provider based in England, although its funding now includes contributions from other administrations. All HE provider tables include finance data for The University of Buckingham, which is a non-publicly-funded HE provider 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.

Balance sheet

A comparison of the HE sector’s balance sheet at 31 July 2014 with that at 31 July 2013 (both as stated in the 2013/14 accounts in Table A) shows a £492 million (6.1%) increase in total creditors (amounts falling due within one year) while total creditors (amounts due after more than one year) have increased by £598 million (8.5%). There was an increase of £205 million (6.6%) in debtors.

The value of tangible assets has increased by £2.8 billion (8.4%), endowment assets have increased by £174 million (3.8%) and investments increased by £218 million (7.4%).

Income and expenditure

Table B provides a summary of income and expenditure for the last two academic years. The total income of the HE sector was £30.7 billion during the financial year to 31 July 2014; this compares with £29.2 billion for the previous year, giving an increase of 5.3%. The surplus of income over expenditure increased from £1,084 million in 2012/13 to £1,176 million in 2013/14, an increase of 8.5%. When surplus is shown as a percentage of net income this has increased from 3.7% in 2012/13 to 3.8% in 2013/14, the first increase since 2010/11.

To provide the context for these figures, Chart 1 (sourced from Table B) shows the HE sector’s surplus/deficit (re-stated for 2004/05 to 2012/13) for each of the last 10 years. The surplus/deficit has fluctuated over time rising from £149 million in 2004/05 to £1.2 billion in 2013/14. 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 HE providers reporting a surplus was 145 out of 161 in 2013/14 compared with 141 out of 161 in 2012/13 (sourced from Table 1). Deficits in the financial year 2013/14 were reported by 16 HE providers and by 20 HE providers in 2012/13.

Table C aggregates income and expenditure figures for HE providers funded by each of the four UK countries’ funding councils. All four countries reported a surplus for the year 2013/14. However, when considered relative to net income, the size of surplus was constant from 2012/13 in England and Scotland and increased for both Wales and Northern Ireland. Chart 2 below illustrates change in surplus as a percentage of net income over the last three years (sourced from Table C).

Income

Charts 3 and 4 below summarise HE providers' sources of income contributed by each source and the growth or otherwise over time (sourced from Table D).

Funding body grants represent 19.8% of total income. Tuition fees and education contracts represent 44.5% of total income. Total income increased by 5.3% from 2012/13 to 2013/14 and there was an increase across all sources except for funding body grants which decreased by 13.9%. The largest increase was observed in endowment and investment income (17.4%).

Chart 4 shows income by source from 2009/10 to 2013/14. Funding body grants have decreased every year since 2009/10, but all other sources of income have increased.

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

HE provider 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 HE providers. Some funds are also provided in England by the Department of Health (DH) and the National College for Teaching and Leadership (NCTL). In 2013/14, over half (52.4%) of funding grants were recurrent (teaching) grants. 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 location of HE provider. The total income for tuition fees and education contracts increased by 17.3% this year to £13.7 billion from £11.7 billion in 2012/13. This continues to be effected by the change to the funding regime. Income from full-time Home and EU domiciled undergraduate students provided 53.4% of the income in this category, and that from all non-EU domicile students provided 28.5%. The total income from HE course fees varied by location 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 6.0% in 2013/14 to £5.1 billion from £4.8 billion in 2012/13. The Research Councils continue to be the largest providers, representing 32.8% of total research grants and contracts income. Table G provides a breakdown of income from research grants and contracts.

Other income

Income in this category increased by 3.2% this year to £5.6 billion from £5.4 billion in 2012/13. Nearly one third (32.7%) of other income came from residence and catering operations (including conferences). Table H provides a breakdown of all other income.

Expenditure

Overall expenditure rose by 5.1% (£1.4 billion) to £29.4 billion as shown in Table I. The largest categories of expenditure; staff costs and other operating expenses increased by 5.4% and 4.4% respectively. Chart 6 below shows the distribution of expenditure (sourced from Table I).

Academic departments accounted for 38.7% 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 2013/14 was £11.4 billion with academic staff costs accounting for £6.9 billion. Table K shows expenditure by academic department group. Total expenditure of medicine, dentistry and health cost centres constituted 23.1% and biological, mathematical and physical sciences 15.4%. In all 10 departments the largest expense was academic staff costs, illustrated in Chart 8 below (sourced from Table K).

© Higher Education Statistics Agency Limited 2015