Liquidity and borrowing
At the end of 2015-16 the sector had net liquidity (cash and cash equivalents) of approximately £9.6 billion. This was equivalent to 135 days’ expenditure. This is higher than the level reported at the end of 2014-15, which was £8.9 billion.
The sector also reported a rise in borrowing, from £8.3 billion (29.8 per cent of income) at 31 July 2015 to £9.1 billion at 31 July 2016 (equivalent to 31.2 per cent of income). This means the sector’s net cash position (liquid funds less borrowing) fell from about £550 million to £500 million.
The level of borrowing varies across the sector according to an institution’s TRAC peer group (see chapter 1b of the TRAC guidance). Group B institutions, those with research income of 15 per cent or more of total income, borrowed the largest amount as a percentage of their total income (45 per cent), while group F, specialist music or arts teaching institutions, borrowed the least as a proportion of total income (22 per cent).