Introduction - Finances 2014/15
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.
Data for this publication has been extracted from the latest or most appropriate HESA datasets and may differ from HESA data published elsewhere. Please click here for more information about the fixed database.
A comparison of the HE sector’s balance sheet at 31 July 2015 with that at 31 July 2014 (both as stated in the 2014/15 accounts in Table A) shows a £443 million (5.2%) increase in total creditors (amounts falling due within one year) while total creditors (amounts due after more than one year) have increased by £1.2 billion (16.2%). There was an increase of £697 million (21.0%) in debtors.
The value of tangible assets has increased by £2.6 billion (7.1%), endowment assets have increased by £528 million (11.1%) and investments increased by £785 million (24.8%).
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 £33.2 billion during the financial year to 31 July 2015; this compares with £30.7 billion for the previous year, giving an increase of 8.0%. The surplus of income over expenditure increased from £1.2 billion in 2013/14 to £1.9 billion in 2014/15, an increase of 56.6%. When surplus is shown as a percentage of net income this has increased from 3.9% in 2013/14 to 5.6% in 2014/15.
To provide the context for these figures, Chart 1 (sourced from Table B) shows the HE sector’s surplus/deficit (re-stated for 2005/06 to 2013/14) for each of the last 10 years. The surplus/deficit has fluctuated over time rising from £157 million in 2005/06 to £1.9 billion in 2014/15. 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 147 out of 162 in 2014/15 compared with 145 out of 162 in 2013/14 (sourced from Table 1). Deficits in the financial year 2014/15 were reported by 15 HE providers and by 17 HE providers in 2013/14.
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 2014/15. However, when considered relative to net income, the size of surplus has increased from 2013/14 in England, Wales and Scotland and has decreased for Northern Ireland. 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 HE providers' sources of income contributed by each source and the growth or otherwise over time (sourced from Table D).
Funding body grants represent 15.9% of total income. Tuition fees and education contracts represent 46.9% of total income. Total income increased by 8.0% from 2013/14 to 2014/15 and there was an increase across all sources except for funding body grants which decreased by 13.3%. The largest increase was observed in research grants and contracts (16.4%).
Chart 4 shows income by source from 2010/11 to 2014/15. Funding body grants have decreased due to the change in the funding regime, every year since 2010/11, 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 2014/15, just under half (44.8%) 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 14.1% (sourced from Table D) this year to £15.6 billion from £13.7 billion in 2013/14. This continues to be effected by the change to the funding regime. Income from full-time Home and EU domiciled undergraduate students provided 56.1% of the income in this category, and that from all non-EU domicile students provided 27.1%. 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 16.4% (sourced from Table D) in 2014/15 to £5.9 billion from £5.1 billion in 2013/14. The Research Councils continue to be the largest providers, representing 30.4% 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 8.7% (sourced from Table D) this year to £6.1 billion from £5.6 billion in 2013/14. Nearly one third (32.2%) of other income came from residence and catering operations (including conferences). Table H provides a breakdown of all other income.
Overall expenditure rose by 6.0% (£1.8 billion) to £31.2 billion as shown in Table I. The largest percentage change was seen in depreciation and other operating expenses which increased by 11.6% and 6.8% respectively. Chart 6 below shows the distribution of expenditure (sourced from Table I).
Academic departments accounted for 38.0% 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 2014/15 was £11.8 billion with academic staff costs accounting for £7.2 billion. Table K shows expenditure by academic department group. Total expenditure of medicine, dentistry and health cost centres constituted 22.9% and biological, mathematical and physical sciences 15.2%. In all 10 departments the largest expense was academic staff costs, illustrated in Chart 8 below (sourced from Table K).
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