The year in review

Compared with the previous year, income to the University rose by 11.0%, from £609 million to £676 million, as follows:

 Grants from the Higher Education Funding Council for England (HEFCE)
represent the second largest source of University income and amounted
to £180 million, up by 7.8%.

Academic fees and support grants amounted to £94 million, up by 8%, with growth of 13.9% in overseas fees. This includes student fees, which increased by £5 million as a result of the increase in variable student fee rates.

Research grants and contracts continue to be the largest source of income to the University and increased by 15.9% to £248 million, most of which is matched by related expenditure.

The 11.5% increase in other operating income to £126 million was driven principally by increased donations up £4.4 million, increased income from subsidiaries – particularly Oxford Saïd Business School Ltd (£2 million) – and a full year’s impact of the Gray Institute (£3 million), which became part of the University on 30 June 2006. Also included within other income is £32 million from Oxford University Press (2005/6 £35 million).

Total expenditure rose by 11.2%. This includes staff costs of £351 million which increased by 18.6% due to an annual negotiated pay increase of 4.3%, the impact of the single spine pay grade change and extra staff for research activities, which were matched by related income.

Other operating expenses amounted to £148 million and decreased by 3.9%. Major factors include increased depreciation on IT assets, higher utility costs and increased bursary and scholarship costs. These increases were more than offset by lower expenditure on professional fees and other cost savings. 

Net cash inflow was £25 million and compares with £82 million in the previous year. The reduction in the net cash inflow is largely due to a major one-off improvement in management of receivables and capital grants in advance of 2005/6. In 2006/7, there were capital payments of £108 million, which were partially offset by £60 million of capital grants, a net outflow of £48 million (2006: inflow £22 million). 

The balance sheet shows an increase in net assets of 10.2%, from £1,333 million to £1,469 million. Fixed assets increased by £103 million, reflecting the continued building programme to support the University’s expanding research base. Significant capital expenditure was incurred on a number of projects in 2007, including the Pitt Rivers Museum’s new research wing, the e-Science building, the Warneford Hospital’s MEG scanner for research and clinical trials relating to autism, the Radiation Oncology Biology’s unit fit-out at the Churchill Hospital and the Classics Centre. Three large projects will continue into 2007–8: the Ashmolean museum extension, the new Biochemistry Building and the Old Road Campus Research Buildings.

Endowment funds rose in total value from £629 million to £681 million largely because of strong equity markets and property values. New funds invested during the year amounted to £15 million. 

The income of all of the University’s academic divisions grew in 2006/7. Income growth was particularly strong in Medical Sciences and Social Sciences as the University’s research activities continue to expand in range and size. The funding position continues to be a challenge in a number of areas and is most acute in the sciences, particularly Physics, Chemistry and Engineering, and in the provision of Oxford’s unique and world-leading library service.