The University made a surplus of £38.9m in 2013/14 and income continued to grow, increasing by 8.1%. Of this, £33.6m related to the University's profit from the sale of its stake in the games and technology company NaturalMotion. After excluding this one-off item and the value of donated heritage assets (£0.9m), the net surplus for the year was £4.4m (2012/13 £32.2m before donated heritage assets). The upward pressure on costs and the need to invest for the future continue to be significant and are being closely managed.
Income to the University rose by 8.1% to £1,174.4m. Research grants and contracts continued to be the largest source of income to the University and increased by 9.5% to £478.3m, most of which was matched by related expenditure. Grants from the Higher Education Funding Council for England (HEFCE) amounted to £182.2m, a decrease of 6.0%, reflecting the further reduction of HEFCE grants following the increase in the maximum permissible UK and EU undergraduate fee to £9,000. Academic fees and support grants totalled £235.9m, up by 19.7m, mainly reflecting the fact that in 2013/14 two cohorts of students were paying the higher fees. Donation income fell from £30.2m in 2012/13 to £29.8m in 2013/14 but this figure excludes donations of £92.3m received during the year for capital projects and endowments, two of the main priorities of the Oxford Thinking Campaign. These donations are for capital and endowment purposes and are not part of donation income.
The University's expenditure of £1,146.3m was 10.5% higher than in 2012/13. Staff costs totalled £596.3m, an increase of 10.1%. Staff numbers rose by 6.1% compared with 2012/13 and this, combined with the annual negotiated pay settlement of 1.0%, promotional salary increments, new measures taken to improve international competitiveness and increased social security costs, has driven this increase. Other operating expenditure has risen in line with staff numbers and research income.
The reduction in surplus for the year led to a net cash outflow from operating activities of £3.8m. Investment in capital projects remained high at £153.1m in 2013/14 but this was offset by capital grants and new endowments resulting in an overall increase in cash for the year of £4.4m.
The balance sheet position remains strong, with net assets at 31 July 2014 of £2.6b, up £125m on the previous year. Net tangible fixed assets increased by £80m, reflecting the continued building programme to support the University's expanding research base. Projects achieving completion included the Mathematical Institute (Andrew Wiles Building) on the Radcliffe Observatory Quarter (ROQ) and the Old Indian Institute for the Oxford Martin School, both of which won Royal Institute of British Architects regional awards in 2014. The refurbishment and redevelopment of the New Bodleian Library for the Weston Library remains on programme for full completion in December 2014, while the Blavatnik School of Government is under construction in the south-west corner of the ROQ and scheduled to open in September 2015.
Notwithstanding all of these challenges, the University will continue to manage its sources of revenue effectively and its costs efficiently, in order to generate the positive long-term cash flow needed to ensure that Oxford maintains its pre-eminent position amongst the world's leading universities.
External research funding
The University of Oxford is committed to disciplinary excellence in research across the spectrum of the sciences, medicine, the social sciences and the humanities. It seeks to maximise the benefits and beneficiaries of research by advancing fundamental knowledge and contributing to better public policy, improved health outcomes, economic prosperity, social cohesion, international development, community identity and the arts and culture.
The scale of the University's research activity is substantial: more than 70 departments, over 1,600 academic and 4,100 research and research support staff and 5,500 postgraduate research students are involved. They collaborate with other universities and research organisations, health-care providers (especially the Oxford University Hospitals NHS Trust), businesses, community groups, charities and government agencies.
Much of this activity is underpinned by research grants and contracts with third parties: the University currently has approximately 4,700 active research awards worth a total of around £2.6 billion.
The largest funders of competitive research at Oxford are the UK Research Councils and UK charities, primarily the Wellcome Trust, Cancer Research UK, the British Heart Foundation and the Leverhulme Trust, as well as a large number of smaller charities. The other major sources include the Department of Health (including the National Institutes of Health Research), the European Commission, through Framework Programme 7 (FP7) and from next year also Horizon 2020 (the successor to FP7), and the Royal Society. Their financial support facilitates a wide range of projects, major research programmes, interdisciplinary initiatives, research training and international collaboration.
Quality Research (QR) funding and knowledge-exchange funding from HEFCE are also crucial to delivering world-class research and maximising societal benefits.
The University warmly acknowledges the role of all its funders and collaborators in supporting its research efforts.