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Oxford colleges braced for the cuts
22 Feb 11
Oxford University’s 36 independent colleges have published their financial statements for the year ended 31 July 2010. Overall, the colleges report a small surplus at the operating level and recorded an 11.5% growth in the value of their endowments.
Total college income was £289m and costs amounted to £286.5m, resulting in an operating surplus of £2.5m. Of the income, £74m came from tuition fees and government grants to fund teaching and research, and £56m from board and lodging charges to students. Income from core activities (£130m) covered less than half of the colleges’ costs. More than half of the income (£159m) came from sources that the colleges have developed to support their core activities: in particular, endowment income (£94m), conference and other trading revenues (£27m) and donations (£20m).
The colleges, through the tutorial system, undertake more than half of Oxford’s undergraduate teaching, as well as supporting graduate studies and research. The direct costs of these activities amounted to £91m, exceeding academic income by £17m. Of the £91m of academic costs, £76m was for salaries, pensions and national insurance and £12m for bursaries and scholarships.
The colleges also provide board and lodging for almost 14,000 of Oxford’s 19,000 students. The direct costs of this provision, £62m, exceeded the income from it by £6m. The provision by colleges of subsidised housing and meals to such a high proportion of their members means that the cost of living for an Oxford student is among the lowest in the country.
Additional to the direct costs of these core activities are the costs of maintaining college buildings (£54m), fundraising and endowment management (£20m), administration (£23m) and other costs (£11m) – all funded by the colleges from their own resources without any contribution from government, tuition fees or other income from students. The maintenance of buildings, many of which are listed and ancient, is a particular concern for colleges. Depreciation is charged on a historic cost basis and amounts to £18m. But a recent internal study suggests that colleges should be providing about £40m annually to ensure the upkeep of the estate.
The value of college endowments grew by 11.5% during the year. The total return on opening endowment balances exceeded 13%, the transfer to fund college activities amounted to 3.8%, and £34m in new endowments was received. At year end total endowments stood at £2,687m, £13m below the value reported before the financial crisis three years previously.
Frances Lannon, Principal of Lady Margaret Hall and Chair of the Conference of Colleges, said of the results: 'The operating surplus overall of the Oxford colleges in 2009-2010 was less than 1% of total revenue, and therefore below what is required for long-term sustainability. This small surplus was achieved after major contributions from endowment income, commercial activity, efficiency measures, and philanthropy.
‘As we prepare for the further cuts announced in government funding for undergraduate teaching, and the introduction of higher fees for UK and EU undergraduates, backed by loans, we face the great challenge of supporting students and widening participation while maintaining excellence in research, teaching, and learning. It is a challenge we are determined to meet, but do not underestimate.’