Reading UK University Balance Sheets

In preparation for a number of future posts, it is worth taking some time to have a look at a University balance sheet. Now is a particularly good time, because the financial year 2011/12 ended in July and universities will start to put their annual reports online.

Have a look here: http://www.admin.cam.ac.uk/univ/annualreport/2011/Statement.pdf where you will find the 2010/2011 academic year financial report for the University of Cambridge.

While you are at it look at these:
1) University of Warwick:  http://www2.warwick.ac.uk/services/finance/resources/accounts/accounts1011.pdf

2) Liverpool John Moores University: http://www.ljmu.ac.uk/fin/fin_docs/Financial_Statements_2011.pdf

Why look at these? Well, if you would know a University you need to know its financials and place them in context.

Why these? These are representative of three groups of universities: a very old (and very excellent): Cambridge;  A "Glass Plate" University: Warwick; and a "new" university: Liverpool John Moores (LJMU). Let's focus on Warwick and LJMU for the moment. If you look around in the financial data and also used some data from HEFCE on student numbers you might construct a table that looks something like this.

2010/11 Data	Liverpool John Moores	University of Warwick
Income (£ Millions)	176.2	419.1
HEFCE Teaching Grant (£ Millions)	64.6	42.0
Students	24680	28165
Home Students	22360	21815
Part Time Students (%)	25.4	37.4
UG (%)	82.7	63.8
Income/student (£)	7142	14880
HEFCE Teaching Grant/Home Student (£)	2890	1926

Data from HEFCE, HESA, and University Annual Reports. HEFCE teaching grant here is reported as the teaching portion of the recurrent grant (excludes items such as research, HEIF, etc). Both institutions report approximately 10% more grant than shown in the HEFCE tables. A 10% change in the bottom row of the table does not influence the overall conclusions.

 Why look at this? 

1) Take a look at that bottom line and note that the cost to government of teaching was not huge. The UK people were getting a very good deal in 2010/11. A Warwick education at an average cost to HEFCE  (read taxpayer) of around £2K/student is really not bad. In fact, I think that was EXCELLENT value for money. Whatever you think of new Universities, LJMU is also pretty good value for money. Keep in mind that Warwick and LJMU had the same per student funding regime so the higher per student cost reflects the distribution of students across the fee structure and the proportion of full time students.

2) No matter how you look at the data, there were a lot of students in the former prices groups C and D (Bands C and D). It is likely that the typical student was in these Bands.

Under the new Fee regime, Universities stand to have a substantially increased income. Consider a university with 10,000 full time students. If 5000 are former band C and 5000 are former band D students, the total increase as the new regime takes hold will be £24 million.(See previous post for Fee band Explanations).

Fine Print: The data and computations here are correct to the best of my knowledge. As in previous posts, please bring any errors to my attention.