The year in review

Compared with the previous year, income to the University rose by 11.6%, from £676 million to £755 million, as follows:

Research grants and contracts continue to be the largest single source of income to the University and increased by 14.9% to £285 million, most of which is matched by related expenditure.

Grants from the Higher Education Funding Council for England (HEFCE) represent the second largest source of University income and amounted to £186 million, up by 3.6%.

Academic fees and support grants amounted to £111 million, up by 17.4%, with growth of 16.5% in overseas fees, and with a further cohort of UK/EU undergraduate fees based on the new higher level.

The 10.0% increase in other operating income to £139 million was driven principally by other services rendered, including expansion in educational services and medical services.

Endowment and investment income, at £34 million, increased by 19.8% compared to the previous year, through higher interest receivable and profits from the realisation of investments in spin-out companies, principally Oxford Catalyst Ltd.

The University’s expenditure of £749 million rose by 11.1%, and includes staff costs of £403 million, which increased 14.8%, compared to 2006/7. This resulted from the annual negotiated pay settlement, extra staff for research activities, which were matched by related income and the expansion of academic activities and related support.

Other operating expenses amounted to £116 million, an increase of 16.0%. Major factors include additional expenditure on new departments, higher professional fees, and increased bursary and scholarship costs.

Net cash inflow, before use of liquid resources and financing for the year, was £39.0 million and compares with £24.8 million in the previous year. The increase in the net cash inflow is largely due to improved working capital management and capital grants in advance. 

Prior year comparatives have been restated to reflect the change in accounting policies due to the introduction of the 2007 HEFE Statement of Recommended Practice.

The balance sheet shows a small increase in net assets of 0.5%, from £1,570 million to £1,578 million. Tangible fixed asset cost (including heritage assets) increased by £118 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 2007/8, including the Old Road Campus, the Ashmolean Museum, the new Biochemistry Building, the Begbroke Supercomputer and the Biomedical Building.

Endowment funds decreased in total value from £688 million to £653 million due to weak equity markets and property values. New funds invested during the year amounted to £15 million.

Treasury risk has increased significantly in 2008 as a result of the global banking crisis. An early impact of the banking crisis on the University occurred in October 2008, when three Icelandic banks and their UK subsidiaries were placed in administration. The University has £31.25 million of fixed-term deposits with these banks, and debtors include a further £2.5 million of accrued interest in relation to these deposits. No provision has been made against the carrying value of the deposits and the accrued interest in respect of the possible non-recovery of some or all of the amounts.