University

05 Feb 10

Oxford University’s 36 independent colleges today publish their financial statements for the year ended 31 July 2009, a period that included the collapse of Lehman Brothers and subsequent turmoil in stock markets around the world.  

Overall, the colleges report a small surplus at the operating level, and a 7% fall in endowments - a lesser decline than that experienced by many of their North American peers but of concern nevertheless given potential cuts in public funding for higher education.

Although colleges receive, via the University, some public funding to support their teaching and research activities, this covers less than half of the cost. The shortfall is funded from the colleges’ own resources, principally the return on endowments, fundraising income and surpluses on vacation conference activities.

In aggregate the colleges returned a surplus for the year of £6m on total income of £281m. Publicly funded tuition and research income fell by 0.7% but, overall, academic income rose by 7.8%, boosted by growth in fees from overseas students. Staff costs, which account for half of total expenditure, rose by 8.1%, reflecting above-inflation national pay awards for academic staff and higher pension contribution rates.

Endowment transfers to fund core activities were £90m. This compares with fees, tuition income and research grants for the period of £69m. The total return on endowment assets was -5.6% in a twelve-month period which saw the MSCI AC World index fall by 23% and the FTSE 100 by 15%. Colleges also received £53m in new endowments.  At year-end total endowments amounted to £2.38bn, 7% lower than at the start of the year.

Donations grew strongly. In addition to the £53m contribution to endowments, colleges received £18m in income gifts and £8m in capital gifts. Conference profits contributed an estimated £10m.

Commenting on the results, Frances Lannon, Principal of Lady Margaret Hall and Chairman of the Conference of Colleges, said: ‘The fall in endowment values, though painful, was considerably less than that experienced by some of our peers. Many colleges are fortunate to have, serving on their investment committees, Old Members who have highly successful careers in fund management. This has undoubtedly helped us weather the storm. It is also encouraging to see strong growth in donations to colleges, up from £60mn in 07-08 to £79mn in 08-09. Almost all of these gifts come from Old Members.

‘Without endowment income, the support of Old Members and the surpluses from conference activities it would be impossible to maintain the unique academic environment, teaching methods and support for research activities that the collegiate system provides. Even with these great advantages, the next few years will present major challenges. Cuts in public funding and greater pressure on family finances will inevitably affect our income, and there is limited scope to cut costs without impairing academic quality. All colleges are determined to maintain the highest academic standards and to this end are putting ever greater efforts into fundraising, conference activities and the pursuit of operating efficiencies.’