Release of 2005/06 HESA Finance data shows income for the higher education sector nears £20 billion

Data from the HESA Finance Record reveals that total institutional income in higher education rose 7.5 per cent to £19.5 billion in 2005/06. Total expenditure in the sector saw a similar level of increase at 7.4 per cent, rising from £18.0 billion to £19.3 billion.

Grants from funding councils contributed to the largest proportion of income at £7.5 billion, a rise of 8.2 per cent on the £7.0 billion in 2004/05. Endowment and investment income saw the largest percentage increase, 11.9 per cent, up from £307 million in 2004/05 to £343 million in 2005/06. Income from “other” sources rose by 6.5 per cent to £3.9 billion. This includes grants from local authorities and income from intellectual property rights.

Sources of income for UK HEIs 2004/05 and 2005/06 (£ thousands)

Within the breakdown of expenditure, interest payable recorded a fall of 1.4 per cent to £254 million. Staff costs, operating expenses (not including staff costs) and depreciation all increased by between 6.9 and 10.0 per cent.

Expenditure by type for UK HEIs 2004/05 and 2005/06 (£ thousands)

Dissecting the UK data into country level shows that income for higher education institutions in England was over £16 billion in total in 2005/06, a 7.7 per cent increase on the previous year. Institutions in Wales, Scotland and Northern Ireland all recorded an increase in total income of between 5 and 8 per cent in the same period, with institutions in Scotland topping £2 billion in income and income for institutions in Wales approaching £1 billion.

Total income for HEIs 2004/05 and 2005/06 (£ thousands) by country

Over the same period higher education institutions in England increased expenditure by 7.6 per cent in total, as spending closed in on the £16 billion mark. For all four nations, increases in expenditure were within half a per cent of their increases in income and all countries recorded a surplus of income over expenditure.

Total expenditure for HEIs 2004/05 and 2005/06 (£ thousands) by country

The data above is derived from the HESA HE Finance Plus 2005/06 product, available on CD-ROM. This publication contains finance data broken down to institutional level including tuition fees and education grants, balance sheets, cash flow, capital expenditure, financial profiles and more.

Notes to editors

Please credit any use of this material to HESA's HE Finance Plus 2005/06.

Press enquiries should be directed to:

• Greg Wells
• HESA Press Officer
• 01242 211120
• [email protected]
• 95 Promenade, Cheltenham, GL50 1HZ.

HE Finance Plus 2005/06 is an annual CD-ROM published by HESA and is available for purchase for £250 + VAT (or £130 + VAT to institutions contained in the data). It is available from [email protected], telephone 01242 211155 or visit the publications section of our website for more information. The HESA reference volume Resources of Higher Education Institutions 2005/06, due to be published in May, also contains data on HE finances as well as data on the HE staff workforce.

Where comparisons are made between the latest financial year (2005/06) and the previous year (2004/05), the previous year’s figures are those reported in the re-stated financial statements.

This data relates to all UK institutions. Figures for the individual nations of the UK are available on request.

1. The deficit/surplus is on continuing operations after depreciation of fixed assets at valuation and before exceptional items, tax and minority interest.
2. Definitions of the terms used follow:

   Reference dates 2005/06

   Financial data relates to the institutions’ financial year, i.e. 1 August 2005 to 31 July 2006.

   Reference dates 2004/05

   Financial data relates to the institutions’ financial year, i.e. 1 August 2004 to 31 July 2005.

   Sources of income

   Funding council grants include those from the Higher Education Funding Council for England (HEFCE), the Higher Education Funding Council for Wales (HEFCW), the Scottish Further and Higher Education Funding Council (SFC), the Training and Development Agency for Schools (TDA) and the Department for Employment and Learning Northern Ireland (DEL).

   Grants for higher education (HE) provision includes recurrent grants and capital grants as defined below in respect of higher education (HE) provision, except in Scotland where this category also includes grants for further education (FE) provision.

   Recurrent grants includes the block grant (or main and associated grants) for teaching (recurrent - teaching), research (recurrent - research) and other recurrent grants (recurrent - other including special funding) as shown in the annual grant letter or additional grant letter from the funding councils.

   Release of deferred capital grants includes the release of deferred capital grants from the funding councils in respect of estate project funding and minor work grants (building), and equipment grants, for the purchase of assets that have been capitalised.

   Grants for FE provision includes all funding council grants for the provision of FE. Grants from HE funding councils and FE funding councils are added together. This category does not apply to SFC funded institutions, as they do not receive separately identified grants for non-advanced/FE provision.

   This includes all income received in respect of fees for students on courses for which fees are charged. Where fees are waived in whole or in part, the income due though not received is included.

   Full-time HE fees – standard rates includes standard fees for full-time and sandwich degree, diploma and similar award-bearing courses for home and European Union (EU) domiciled students.

   Full-time HE fees – non-standard rates includes all other fees for full-time and sandwich degree, diploma and similar award-bearing courses for home and EU domiciled students.

   Part-time HE fees includes fees for part-time degree, diploma and similar award-bearing courses for home and EU domiciled students.

   Overseas (non-EU) domicile fees includes fees for all degree, diploma and similar award-bearing courses for non-home and non-EU domiciled students.

   Non-credit-bearing course fees includes all fee income received in respect of non-credit-bearing liberal adult education, continuing education or extra-mural courses.

   FE course fees includes fee income received for the provision of FE/non-advanced courses.

   Research training support grants includes all grants made by research councils and other bodies in support of the training of research students. This includes bench fees and Collaborative Awards in Science and Engineering (CASE) awards. It also includes income from Doctoral Training Grants and Collaborative Training Accounts (or similar postgraduate grants) including the tuition fee element but excludes any element that is passed on by the institution as a student stipend or bursary.

   Source of fees are grouped into three categories comprising: The Student Loans Company (SLC), Local Education Authority (LEA), Student Awards Agency for Scotland (SAAS) or the Department for Employment and Learning Northern Ireland (DEL); Department of Health (DH) (including the National Health Service (NHS) Workforce Development Confederations and NHS Trusts), Regional Offices of the NHS Executive (RONE) or the Scottish Home and Health Department (SHHD); or other sources not covered above, including individual students.

   This includes all income in respect of externally sponsored research carried out by the institution or its subsidiary undertaking for which directly related expenditure has been incurred.

   OSI Research Councils includes all income from research grants and contracts from Research Councils covered by the Office of Science and Innovation (OSI). They are:

   • Biotechnology & Biological Sciences Research Council (BBSRC)
   • Natural Environment Research Council (NERC)
   • Engineering & Physical Sciences Research Council (EPSRC)
   • Economic & Social Research Council (ESRC)
   • Particle Physics & Astronomy Research Council (PPARC)
   • Medical Research Council (MRC)
   • Council for the Central Laboratory of the Research Councils (CCLRC)
   • Arts & Humanities Research Council (AHRC).

   • Research income from the British Academy and the Royal Society is also included under this heading.

     UK based charities includes all research grants and contracts income from all charitable foundations, charitable trusts, etc. based in the UK which are registered with the Charities Commission or those recognised as charities by the Inland Revenue in Scotland.

     UK central government bodies, local authorities, health & hospital authorities includes all research grants and contract income from UK central government bodies, UK local authorities and UK health and hospital authorities, except Research Councils and UK public corporations. This includes government departments and other organisations financed from central government funds. Also non-departmental public bodies (NDPBs) such as the British Council are included in this section.

     UK industry, commerce & public corporations includes all research grants and contracts income from industrial and commercial companies and public corporations (defined as publicly owned trading bodies, usually statutory organisations with a substantial degree of financial independence) operating in the UK.

     EU government bodies includes all research grants and contracts income from all government bodies operating in the EU, which includes the European Commission (unless shown separately), excluding bodies in the UK.

     EU other includes all research grants and contracts income from all non-government bodies operating in the EU, excluding bodies in the UK.

     Other overseas sources includes all research grants and contracts income from overseas bodies operating outside the EU.

     Other sources includes all research grants and contracts income not covered above. This includes income from other higher education institutions (HEIs) where the HEI is the original contractor.

     Where Research grants & contracts are further broken down into the Income activities of academic departmental cost centres, Academic services and Administration & central services, the definitions of these activities are the same as those of the same name found under the Expenditure activities header below.

     This includes all income in respect of services rendered to outside bodies, including the supply of goods and consultancies.

     UK central government bodies, local authorities, health & hospital authorities and EU government bodies includes all non-research income from UK central government bodies, non-departmental public bodies, UK local authorities and UK health and hospital authorities, except any included under tuition fees & education grants & contracts. EU government bodies includes all non-research income from all government bodies operating in the EU, including the European Commission but excluding the UK. European Social Fund grants are included in this category.

     Other sources includes all non-research income for services rendered to industrial and commercial companies and public corporations. It includes all validation fees for courses such as those run by other institutions.

     Other income - other

     Residences & catering operations (including conferences) includes the gross income from residences, catering and conference operations.

     Grants from local authorities includes income from local authorities providing capital or revenue for the purpose to which the grant will be applied.

     Income from health & hospital authorities (excluding teaching contracts for student provision) includes income received from UK health or hospital authorities for the funding of any employees of the institution, including posts in academic teaching, except for those relating to the provision of a service, and except for research.

     Release of deferred capital grants includes an institution’s capital grant from a source other than a funding council, to finance, or partly finance, the construction or acquisition of a fixed asset.

     Income from intellectual property rights includes all income received from intellectual property rights such as licences and patents.

     Other operating income includes all other operating income not covered above such as Trans-European Mobility Scheme for University Studies (TEMPUS) and European Community Action Scheme for the Mobility of University Students (ERASMUS) grants.

     Where the heading Other income appears, this may be taken to mean Other income - other services rendered plus Other income - other as defined above, unless shown separately.

     Endowment and investment income

     This includes income from specific endowment asset investments; general endowment asset investments; other investment income and other interest receivable.

     Joint ventures are jointly controlled contractual arrangements between the institution and one or more parties to undertake common objectives, in which the institution holds an interest on a long-term basis.

     Categories of expenditure

     Staff costs covers all, and only, those full-time and part-time staff holding contracts of employment with the institution and includes any redundancy or restructuring payments made to these staff.

     Academic staff costs includes costs in respect of academic staff, defined as staff whose primary function is teaching and/or research, paid from within the budgets of academic departments and allocated to the appropriate cost centre.

     Other staff costs includes costs in respect of all other staff paid from within the budgets of academic departments and allocated to the appropriate cost centre.

     Other operating expenses includes costs in respect of payments to non-contracted staff or individuals, all other non-staff costs incurred, except for depreciation and interest payable. Equipment that has not been capitalised, expenditure on maintenance contracts and telephone costs (calls, rental and non-capitalised equipment) if not charged to departments, are also included in this category.

     Depreciation includes depreciation costs on equipment capitalised according to where the assets being depreciated are located.

     Interest payable includes costs in respect of interest payable on premises, residences and catering operations and other expenditure.

Ends