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HESA Finance data published today: Income of higher education institutions £25.4 billion in 2008/09

The newly released HE Finance Plus 2008/09 publication from the Higher Education Statistics Agency shows that the total income of higher education institutions rose by 8.3% between 2007/08 and 2008/09 to £25.4 billion. Funding bodies provided £8.8 billion of this income, while tuition fees and education contracts contributed £7.3 billion. The table below shows the total income of UK higher education institutions by source in 2007/08 and 2008/09:

Sources of income for UK HEIs 2007/08 and 2008/09 (£thousands)
  2007/08 2008/09 % change
Funding body grants 8486066 8819359 3.9%
Tuition fees and education contracts 6267029 7282639 16.2%
Research grants and contracts 3713077 4144582 11.6%
Other income 4440978 4769744 7.4%
Endowment and investment income 521780 356942 -31.6%
Total Income* 23428930 25373267 8.3%
Source: HESA HE Finance Plus 2008/09
* Includes income from joint ventures. Total income may not equal sum of rows - see note 3

Total expenditure rose by 9.0% between 2007/08 and 2008/09 to £24.9 billion. Staff costs contributed £14.2 billion towards this total. The table below shows the total expenditure of UK higher education institutions by type in 2007/08 and 2008/09:

Expenditure by type for UK HEIs 2007/08 and 2008/09 (£thousands)
  2007/08 2008/09 % change
Staff costs 13130490 14164715 7.9%
Other operating expenses 8268654 9097354 10.0%
Depreciation 1191349 1299748 9.1%
Interest and other finance costs 286947 382619 33.3%
Total Expenditure 22877440 24944436 9.0%
Source: HESA HE Finance Plus 2008/09

For the first time HE Finance Plus 2008/09 also includes results of the annual Higher Education Business and Community Interaction (HE-BCI) survey. The HE-BCI survey measures interactions between HE institutions and business and the wider community.

The 2008/09 survey showed that HE institutions received £938 million from contracted research on behalf of external partners. HE institutions also earned £56.5 million in income from Intellectual Property in the form of licensing fees and royalties.

Headline results of the survey for 2008/09 are shown below:

Higher Education - Business and Community Interaction Survey results
Income from collaborative research involving public funding £732m
   
Total value of contract research £938m
   
Business and community services
Consultancy contracts £332m
Facilities and equipment related services £110m
Courses for business and the community £559m
   
Income from regeneration and development programmes* £172m
   
Intellectual Property
Income from SMEs £12m
Income from other (non-SME) commercial businesses £36m
Income from other non-commercial organisations £8m
   
Estimated external investment received from spin-off activities
Spin-offs with some HEI ownership £548m
Formal spin-offs, not HEI owned £153m
Staff start-ups £14m
Graduate start-ups £51m
Source: HESA HE Finance Plus 2008/09
Completion of the survey is not mandatory for institutions in Scotland – see note 7
* Excludes data returned by The University of St Andrews – see note 8

The HESA HE Finance Plus 2008/09 CD product includes finance data broken down to institutional level including tuition fees and education contracts, balance sheets, cash flow, capital expenditure, financial profiles and more. Results of the Higher Education Business and Community Interaction survey are included in this publication for the first time this year.

HE Finance Plus 2008/09 is available for purchase from the website or by calling +44 (0) 1242 211155. 

The HESA reference volume Resources of Higher Education Institutions 2008/09, published in May, will also contain data on HE finances as well as data on the HE staff workforce.

Notes for editors

  1. Press enquiries should be directed to:
  2. Data in the tables represent cash figures and are not adjusted for inflation.
  3. All values in the FSR are shown in units of £1000, and where necessary rounded to the nearest £1000; the consequence of which is that sum of individual values in each row or column may not match the total value.
  4. HESA Finance data is collected from all publicly funded Higher Education Institutions (HEIs) in the UK, plus the University of Buckingham, which is a non-publicly-funded institution. The 2008/09 data covers 165 HEIs (130 in England, 12 in Wales, 19 in Scotland and 4 in Northern Ireland).
  5. Where comparisons are made between the latest financial year (2008/09) and the previous year (2007/08), the previous year's figures are those reported in the re-stated financial statements.
  6. The data in this release relates to all UK HE institutions. Figures for the individual nations of the UK are available on request.
  7. In 2008/09 the HE-BCI survey Total figures for Scotland exclude data from HEIs that submitted an optional nil return to HESA. These are: Queen Margaret University, Edinburgh; The Royal Scottish Academy of Music and Drama; The University of the West of Scotland; Edinburgh Napier University; Scottish Agricultural College.
  8. The 2008/09 RDA programme values were reported in error within The University of St Andrews HE-BCI Survey Part B return. Therefore, data for The University of St Andrews have been excluded from these figures. The correct figures for The University of St Andrews are as follows: 2008/09 RDA programmes income: £309,000. 2007/08 RDA programmes income: £159,000. Including these corrected figures within the sector totals results in the following totals: 2008/09 RDA programmes income: £75,182,000. 2007/08 RDA programmes income: £85,039,000.
  9. HESA cannot accept responsibility for any inferences or conclusions derived from the data by third parties.
  10. Definitions of the terms used above follow:

    Definitions

    Reference dates 2008/09

    Financial data relates to the institutions' financial year, i.e. 1 August 2008 to 31 July 2009.

    Reference dates 2007/08

    Financial data relates to the institutions' financial year, i.e. 1 August 2007 to 31 July 2008.

    Sources of income

    Funding body grants

    Funding body 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(NI)).

    Tuition fees & education contracts

    This includes all income received in respect of fees for students on all courses for which fees are charged.

    Research grants & contracts

    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.

    Other income - other services rendered

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

    Endowment and investment income

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

    Categories of expenditure

    Staff costs

    This covers all, and only, those full-time and part-time staff who have a contract of employment with the institution and includes any redundancy or restructuring payments (that are not treated as exceptional items) made to these staff.

    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 and other finance costs includes costs in respect of interest payable on premises, residences and catering operations (including conferences) and other expenditure. This heading also includes Pension Cost adjustments in accordance with Financial Reporting Standard 17.

    Higher Education - Business and Community Interaction Survey

    Coverage

    The Higher Education Business and Community Interaction Survey (HE-BCI) is the main vehicle for measuring the volume and direction of interactions between UK Higher Education Institutions (HEIs) and business and the wider community. The survey collects information on the infrastructure, capacity and strategy of HEIs, and also numeric and financial data regarding third stream activity (that is, activities concerned with the generation, use, application and exploitation of knowledge and other university capabilities outside academic environments, and distinct from core activities of teaching and research).

    The HE-BCI Survey is mandatory for HEIs in England, Northern Ireland and Wales, excluding The University of Wales (central functions). The HE-BCI Survey is not mandatory for HEIs in Scotland, although the Scottish Funding Council (SFC) strongly advise that HEIs in Scotland return it. In 2008/09, five institutions in Scotland did not submit HE-BCI data.

    HE-BCI data relates to the institutions' financial year, i.e. 1 August 2008 to 31 July 2009.

    Collaborative research involving public funding

    This includes research projects' public funding from at least one public body, and a material contribution from at least one external non-academic collaborator. The collaborative contribution may be cash or 'in-kind' (if this is specified in a collaborative agreement and auditable). In-kind contributions include contributions to the project from the non-academic collaborators (for example staff time, use of equipment and other resources, materials, provision of data etc.) as described in the project collaboration agreement.

    Contract research

    This includes contract numbers and income identifiable by the institution as meeting the specific research needs of external partners, excluding any already returned in collaborative research involving public funding and excluding basic research council grants.

    Business and community services
    Consultancy contracts

    This includes contract numbers and income associated with consultancy, which are crucially dependent on a high degree of intellectual input from the institution to the client (commercial or non-commercial) without the creation of new knowledge. Consultancy may be carried out either by academic staff or by members of staff who are not on academic contracts, such as senior university managers or administrative/support staff.

    Facilities and equipment related services - organizations involved and income

    This includes the use and income associated with use of the HEI's physical academic resources by external parties, and captures provision which can be provided by an HEI. Examples may include aerospace company use of a HEI's wind tunnel, or media company use of a digital media suite. It does not include simple trading activities such as commercial hire of conference facilities or academic conferences.

    Courses for business and the community

    This includes revenue generated by Continuing Professional Development (CPD) courses, defined as a range of short and long training programmes for learners already in work who are undertaking the course for purposes of professional development, upskilling or workforce development.

    Regeneration and development programmes

    The majority of regeneration funding comes from European sources, specifically ERDF income (European Regional Development Fund), ESF income (European Social Fund (ESF)), UK Government regeneration funds and development agencies in the UK including RDA programmes (Regional Development Agencies). However, any funding that enhances or increases knowledge transfer between the HEI and business and community partners may be included, which if not categorised above, is included in other regeneration grants and income from local and regional bodies or other sources.

    Intellectual property (IP)

    Intellectual property (IP) is a vital indicator for the value added by the HEI when interacting with a range of external partners. It is commonly in the form of licenses granted to private companies, allowing them to exploit an invention protected by a patent. IP includes patents, copyright, design registrations and trade marks.

    IP income includes the income from upfront or milestone fees, royalties and patents cost reimbursement.

    Small and medium enterprises (SMEs) includes enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million. SMEs include micro, small and medium enterprises and sole traders.

    Other (non-SME) commercial businesses includes other commercial businesses which do not match the above definition of SMEs.

    Non-commercial organisations includes organisations from which its shareholders or trustees do not benefit financially

    Spin-off activity

    Spin-offs are companies set-up to exploit IP that has originated from within the HEI. All investment from the HEI and external partners are included but any investment from HEFCE/BIS third stream funds (such as the Higher Education Innovation Fund in England or the Third Mission Fund in Wales) is excluded.

    Spin-offs with some HEI ownership are companies set-up to exploit IP that has originated from within the HEI, where the HEI continues to have some ownership.

    Formal spin-offs, not HEI-owned are companies set-up based on IP that has originated from within the HEI but which the HEI has released ownership (usually through the sale of shares and/or IP).

    Staff start-ups are companies set-up by active (or recent) HEI staff but not based on IP from the institution.

    Graduate start-ups include all new business started by recent graduates (within two years) regardless of where any IP resides, but only where there has been formal business/enterprise support from the HEI.

Ends

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