Financial review

In an increasingly competitive environment income increased by 4.9 per cent, and the University generated an operating surplus of 3.1 per cent, underlining the quality of our financial sustainability. 

Research tax claims

In 2014/15 the University made a successful claim under the RDEC tax rules (which are designed to incentivise research and development) for the 2012/13 and 2013/14 financial years and will make a claim for 2014/15 during the next financial year. The University has recognised the income of which it is reasonably assured of receiving as £21.8 million, which appears as an exceptional item in the 2014/15 financial year and in line with guidance from BUFDG, (British Universities Finance Directors Group) the corresponding tax deduction of £4.9 million has been recognised in taxation. Exceptional RDEC income is not considered in the comments, values and percentages quoted in this review unless otherwise stated. 

Our continuing programme to recruit key academic staff has again supported our targeted increase in group income which increased by 4.9 per cent (£38 million) from the previous year. Income per staff FTE (full-time equivalent) increased by 0.9 per cent in 2014/15. 

Apart from a small reduction in funding council grants income of 0.2 per cent, all other areas of income increased in comparison with the 2013/14 figures. 

Student and staff numbers

Our student population grew by 6.5 per cent in the year to 35,255. Tuition fee income rose by £27.7 million in the third year of the new UK fee regime, and also reflected increases in international student numbers. 

Despite the difficult financial climate the University has continued to be successful in winning research grants and contracts. Research income has increased to £226 million, up 4.4 per cent (£10 million) from 2013/14. 

Other income (£151 million) is up 2 per cent from last year (£147 million) reflecting similar increases across a range of income sources. 

Endowment income remained strong at £10.5 million, while other interest receivable of £4.1 million was down slightly on last year due to reduced interest rates. 

Group expenditure increased year on year by 6.2 per cent, reflecting continued investment for growth. 

A university’s most valuable resource is its staff and our salary and related costs to sustain this resource in 2014/15 was £445 million. Staff costs as a proportion of total income was up by 1.9 per cent to 54.4 per cent. This proportion of staff costs to total income reduces to 53 per cent if RDEC income is included. 

Other costs, which include expenditure on subsidiary company activities, student accommodation, bursaries, premises costs and library services, have increased by £10 million (3 per cent) from last year. £6 million of this is accounted for by the University’s Estates refurbishment programme. 

Expenditure on prizes, scholarships, studentships and bursaries remains a priority and was in excess of £26 million. Depreciation rose 5.1 per cent to £33.9 million. Interest payable is less than 1 per cent of total expenditure and is down 1.4 per cent on last year. 

Strong balance sheet

We are pleased to report continued strength in the University Group balance sheet. This strength was a key factor in securing long term funding from which to invest in the transformational Estate Strategy. All balance sheet financial metrics are resilient. 

The University continues to deliver a significant programme of estates developments and equipment procurement. The development pipeline of estates projects exceeds £1.5 billion over the next 10 years to support infrastructure developments that will deliver high-quality educational and research facilities. 

The above information reflects the audited accounts for the year to 31 July 2015, published in December 2015. Anyone interested in obtaining further information is invited to contact the University’s Finance Department. 

Group income and expenditure account for the year ended 31 July

Group balance sheet as at 31 July