Introduction - Finances of Higher Education 2016/17
Finance data
This commentary draws attention to some of the headline figures and key points that emerge from the introduction tables and is displayed graphically where appropriate. It should be noted that accounting standards for higher education providers changed for 2015/16 so this year's data is not comparable with published HESA finance data prior to 2015/16.
It should also be noted that 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.
Balance sheet
A comparison of the HE sector’s balance sheet at 31 July 2017 with that at 31 July 2016 (both as stated in the 2016/17 accounts in Table A) shows a £551 million (5.6%) increase in total creditors (amounts falling due within one year) while total creditors (amounts due after more than one year) have increased by £1.3 billion (9.6%).
Income and expenditure
Table B provides a summary of income and expenditure for the last two academic years. Total income was £35.7 billion during the financial year to 31 July 2017. The surplus of income after other gains/(losses), share of surplus/(deficit) in joint ventures and associates, and tax was £2.3 billion in 2016/17, or 6.4% of total income.
The number of HE providers reporting a surplus was 132 out of 164 in 2016/17 (sourced from Table 1). Deficits in the financial year 2016/17 were reported by 32 HE providers.
Table C aggregates income and expenditure figures for HE providers funded by each of the four UK countries’ funding councils. England, Scotland and Northern Ireland all reported a surplus for the year 2016/17. Chart 1 below illustrates change in surplus/deficit as a percentage of total income over the last two years (sourced from Table C).
Income
Charts 2 and 3 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 14.3% of total income. Tuition fees and education contracts represent 49.7% of total income. Total income increased by 2.7% from 2015/16 to 2016/17, but funding body grants decreased by 1.2% and investment income by 3.0%. Research grants and contracts income increased by 0.5%. All other sources increased with the largest increase observed in tuition fees and education contracts (5.5%).
Chart 3 shows income by source from 2015/16 to 2016/17.
Funding body grants
Funding body grants reporting changed in 2015/16. HE provider funds for academic and other purposes are allocated primarily by the Higher Education Funding Council for England (HEFCE) (Office for Students since 1 April 2018), the Higher Education Funding Council for Wales (HEFCW), the Scottish Funding Council (SFC) and by the Department for the Economy Northern Ireland (DfE(NI)) acting as a funding agency for the four Northern Ireland HE providers. Some funds are also provided in England by the Skills Funding Agency (SFA) and the National College for Teaching and Leadership (NCTL). Table E provides a breakdown of funding body grants by country of provider.
Tuition fees and education contracts
Table F provides a breakdown of income from tuition fees and education contracts by location of HE provider. In 2016/17, the data collected by providers in England has changed to split out EU domiciled students. Caution should be taken when analysing data for HE course fees due to this split. The total income for tuition fees and education contracts increased by 5.5% (sourced from Table D) this year to £17.7 billion from £16.8 billion in 2015/16. This continues to be effected by the change to the funding regime. Income from all non-EU domicile students provided 26.4% (26.5% in 2015/16). 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 Charts 4a-d (sourced from Table F).
Research grants and contracts
Research grants and contracts decreased by 0.5% (sourced from Table D) in 2016/17. The Research Councils continue to be the largest providers, representing 32.9% of total research grants and contracts income. Table G provides a breakdown of income from research grants and contracts.
Other income, investment income and donations and endowments income
Other income increased by 0.4% (sourced from Table D) this year to remain at £6.1 billion. Over one-third (36.1%) of other income came from residence and catering operations (including conferences). Investment income has decreased by 3.0% and donations and endowments has increased by 1.4% in 2016/17. Table H provides a breakdown of all other income, investment and donations and endowments.
Expenditure
Overall expenditure was £34.5 billion in 2016/17 as shown in Table I. Chart 5 below shows the distribution of expenditure (sourced from Table I).
Academic departments accounted for 37.7% of total expenditure. Table J and Chart 6 displays the distribution of expenditure across activity groups.
The total expenditure in academic departments in 2016/17 was £13.0 billion with academic staff costs accounting for £8.0 billion. Table K shows expenditure by academic department group. Total expenditure of medicine, dentistry and health cost centres constituted 23.0% and biological, mathematical and physical sciences 15.1%. In all 10 departments the largest expense was academic staff costs, illustrated in Chart 7 below (sourced from Table K).
© Higher Education Statistics Agency Limited 2018