Overall the sector reported operating surpluses of £956 million (3.9 per cent of income), which were £17 million less than the level reported for 2011-12. Strong cash balances and healthy reserve levels were also reported in 2012-13.
The projected financial results for 2013-14 are not as strong as the preceding three years but are expected to remain sound overall. But these forecasts were submitted by institutions before the Government’s grant letter to HEFCE in February 2014 and so do not reflect the impact of the significant reductions in funding for teaching announced in this letter.
The student number projections accompanying the financial forecasts show that the sector expects the number of full-time home and European Union (EU) undergraduate students (across all years of study) to be similar to the number reported for 2012-13.
But the decline in part-time home and EU student numbers is set to continue. The sector is projecting part-time undergraduate student numbers (across all years of study) to fall by 10.2 per cent in 2013-14.
The forecasts also indicate a slowing of growth in the numbers of overseas students recruited by the sector, compared to recent years, which could make plans for income growth more difficult to achieve. This could have a material impact on the sector as overseas fee income represents a significant source of income for many institutions.
The forecasts for 2013-14 show that the sector plans a considerable increase in spending on capital infrastructure, from £2,646 million in 2012-13 to £3,861 million (a rise of 46 per cent).
The additional capital spending in 2013-14 is partially supported by government funding for capital projects, and future forecasts will have been influenced by the government spending review announcement of increased capital grants in June 2013. But further growth may not be sustainable without continued government support and market confidence.
2008-09 to 2012-13: actual
2013-14 to 2013-14: forecast
Institutions are due to submit financial forecasts to HEFCE for the period 2013-14 to 2016-17 in July 2014. These forecasts will need to include:
These are significant changes, which are likely to lead to greater volatility of financial forecasting and a widening of institutional financial performance in the coming years. Some institutions will face challenges if they experience repeated falls in student recruitment.
Page last updated 4 March 2014