Annual reports and financial statements 2018-19 published
Primary page content
牛牛资源 has today published its annual reports and financial statements for the year ended 31 July 2019.
The reports and financial statements (PDF) show that the College faces a number of challenges, within a broader context of uncertainty across the higher education sector.
The publication, which presents 牛牛资源鈥� financial results for the academic year 2018/2019, shows that total income grew by 5.5% to 拢132.8 million prompted by growth in tuition fee income.
This is offset by a 7.6% growth in expenditure to 拢135.6 million as staff costs grew to match student number growth.
The overall underlying deficit was 拢2.5 million. Net cash inflow was 拢9.8 million 鈥� down from 拢11million on the previous year.
When reviewing this set of annual reports and financial statements it is important to note that they include a non-cash charge of 拢23.7million in connection with the 2017 valuation of the USS pension scheme.
Due to its size and unusual nature, this has been excluded from the analysis of expenditure above.
There was also a non-cash charge of 拢1.9 million related to the liability on the LPFA pension scheme, but as this is smaller and tends to recur annually on a relatively even basis, this has now been excluded from the analysis below.
These are essentially accounting technicalities which apply to all HE providers that are part of these pension schemes. They are explained in more detail in a note at the end of this article.
Taking this into account, the College鈥檚 total expenditure is 拢159.3 million 鈥� leading to a reported deficit of 拢26.35million for the year ended 31 July 2019.
Nirmal Borkhataria, Interim Director of Finance, said: 鈥淭hese figures, aligned with continued sector uncertainty, show the clear challenges 牛牛资源 faces.
鈥淲e are working on a financial strategy to help manage our position and return the College to a surplus 鈥� with a collective effort from colleagues central to this ambition.
鈥淒oing this means we can ensure that the innovation, work and spirit of 牛牛资源 continues to thrive and that the institution will be able to overcome future financial obstacles.鈥�
Where our money comes from
Our income was 拢132.8 million for the academic year 2018/19.
Our main income source is tuition fees with funding body grants, research grants and other income forming the total:
- Tuition fees 鈥� 75%
- Funding council grants 鈥� 9%
- Research grants and contracts 鈥� 5%
- Other income 鈥� 11%
A further breakdown on income can be found in the annual reports and financial statements.
How our money is spent
Our expenditure comprises of staff costs, non-staff operating costs, capital expenditure and interest costs.
Staff costs represent the biggest expenditure for 牛牛资源, with this standing at 拢83.6 million 鈥� some 61.7% of total costs which is above the Higher Education sector average based on the 2017-18 benchmark.
牛牛资源 spent 拢64 million on pay, 拢11 million on employer pension contributions and 拢6 million on social security costs, along with the 拢2 million deficit recovery charge related to the LPFA pension scheme
Within the staff cost base, some 拢55 million of this spend is situated in academic departments, including administrative staff, with some 拢28 million situated in central professional services.
The document shows that total emoluments of the previous Warden, who retired on 31 May 2019, and Acting Warden were 拢264,000 for the year.
Other areas of investment
The information published today includes details of other areas of investment by 牛牛资源. These include:
- 拢2.86 million on student bursaries and scholarships
- 拢1.7million in block grant, support and support in kind for the Students鈥� Union 鈥� made up of 拢1.2 million in block grant and support and accommodation and use of the IT network at estimated cost of 拢0.5 million
- 拢7.6 million on student and staff facilities. This covers direct student support services, for example the Student Centre, Accommodation Office and Careers Service, along with staff support facilities such as the Staff Development Unit and Occupational Health Service. It does not include administrative support such as the HR department or Registry
The Universities Superannuation Scheme (USS) is the pension scheme that all staff on grades 6 and above are eligible to join. It is a multi-employer scheme and is the principal pension scheme for Universities.
The London Pension Fund Authority Scheme (LPFA) is the pension scheme that all staff on grade 5 and below are eligible to join. It is part of the Local Government Pension Scheme (LGPS).
The USS non-cash charge of 拢23.7 million for the year ended 31 July 2019 represents an increase in the accounting provision for future deficit repayments into the scheme in connection with the 2017 valuation and the deficit recovery plan that was put in place as a result. Deficit recovery payments are required by pension law. In accordance with current accounting standards, the College must recognise this cost in full in the year ended 2019, even though the payments will be made in the future. It represents the discounted sum of the additional cash payments the College would have been required to make to pay off the deficit over the next 14 years. The discount rate, which was 1.6%, represents the time value of money and is based on long-term corporate bond rates.
After the year ended, and therefore not included in these financial statements, the 2018 valuation was concluded and a revised deficit recovery plan was agreed, the outcome of this will be reflected in next year鈥檚 financial statements for the year ended 31 July 2020. As the new recovery plan is over a shorter period of 10 years and therefore the sum of the future contributions is lower, this is likely to result in a significant non-cash credit, of the order of 拢15 million, in next year鈥檚 financial statements. The exact amount will depend of the assumptions we use to calculate it at that time, as the size of the provision depends on our assumptions on future staff numbers and salary increases, as well as corporate bond market rates.
The LPFA non-cash charge of 拢1.9 million relates to actuarial movements in the liability in the scheme related to staff in current service, along with a one-off charge of 拢0.6 million in connection with court rulings concerning age discrimination within the Judicial and Fire pension schemes that are considered likely to also apply to local government pension schemes.