City University London's financial year runs from 1st August to 31st July. In this summary, '2012' refers to the financial year from 1st August 2011 to 31st July 2012, while '2013' refers to the financial year from 1st August 2012 to 31st July 2013.
The University is reporting an operating deficit of £16.2 million, compared to a £1.0 million deficit in the previous year. The surplus including the surplus on the sale of Finsbury, Heyworth and Pear-Tree Court halls of residence was £6.5 million, compared to the deficit of £1.0 million reported in the previous year. The majority of the operating deficit this year related to one-off investments associated with the Strategic Plan 2012- 2016, in particular the investment in new academic posts, the estate, IT and library infrastructure and restructuring costs associated with the Professional Services Review.
Total operating income, which excluded the surplus on the sale of halls and the income generated by the joint venture with INTO, increased by £5.8 million (3.3%) to £181.3 million.
Funding Council (HEFCE) grants decreased by £6.8 million to £29.7 million. This is largely related to the reduction in teaching grant consequent on the transition to the new fee regime. The majority of funding for new intake UK and EU undergraduates is now received as fee income rather than through the Funding Council grant.
Tuition fee income, excluding NHS educational contracts, increased by £11.1 million (11.5%) to £107.9 million within 2013. This reflected the transition to the new funding regime. Tuition fees from home and EU undergraduate students increased by £6.7 million. Income from postgraduate and international (non EU) students increased by £3.4 million and income from other sources of fees, including continuing professional development courses, increased by £1.0 million. Income received from contracts with the NHS fell by £1.5 million to £20.1 million, largely as a result of a reduction in the contract for Continuing Professional and Personal Development.
Income from research grants and contracts increased by £1.8 million (22.5%) to £9.8 million. This resulted from, amongst other things, the first phase of investment in new academic posts and is slightly ahead of our strategic target of £9.4 million.
Investment income remained at £1.6 million. Although cash and investment balances increased from £68.0 million to £84.6 million following the sale of halls of residence, UK interest rates remain depressed. Towards the latter part of the year we began to move the balance of investments to more liquid deposits with lower rates of return in anticipation of a decline in cash balances over the summer period resulting from major investments in our estates infrastructure.
Total expenditure, excluding depreciation and restructuring, increased by £17.8 million (10.9%) compared to the previous year, reflecting investment spend in implementing the Strategic Plan 2012-2016.
Staff costs, excluding restructuring, increased by £7.0 million (6.8%), reflecting the investment in new academic posts, including action taken to retain existing staff. Action is also being taken to reduce the cost base associated with professional staff through the Professional Services Review. Non-staff costs, excluding depreciation, increased by £10.8 million (18.1%). This reflects investment in the estate, IT and libraries. Depreciation for the year increased from £12.2 million to £13.9 million reflecting the investment in the estate.
Academic and other education related costs, excluding research and knowledge transfer, account for £102.9 million (52.1%) of the £197.5 million total expenditure in 2012/13. If research and knowledge transfer activity is included, then these account for £110.1 or 55.7% of total expenditure.
The value of tangible fixed assets increased to £121.7 million, of which £14.4 million related to building improvements and £5.0 million related to fixtures, fittings and IT equipment. This includes the first year of investment in the University's estate which forms part of the Strategic Plan 2012-16.
The University disposed of a long leasehold interest in the Finsbury halls site in Goswell Road, which also included the University's sports centre, on 21st August 2012. The future development of the site will provide the University with access via a nomination agreement to over 800 purpose-built student rooms and a lease on an enlarged, state-of-the-art sports centre for students, staff and community use and academic facilities.
INTO City LLP
INTO City LLP is a joint venture between the University and INTO University Partnerships Limited, which began trading in January 2010. Its principal activity is the provision of pre-university education for international students, with the intention that a significant proportion of those students progress to degree level programmes at City University London. A 50% share of the gross assets and liabilities is including the University's balance sheet and 50% of its net income is reported in the University's consolidated income and expenditure account. The University's share of the loss for 2012/13 was £0.6 million (previous year £0.4 million).
The University's balance sheet shows a balance of cash and short-term investments of £84.6 million at the year end - an increase of £16.6 million over the previous year. The cash inflow from operating activities plus net investment returns was £10.9 million, with an equivalent outflow of £19.4 million for investment in capital assets offset by the £23.6 million receipt for the sale of the halls of residences and £1.5 million related to other movements in investments including the receipt of capital grants. The cash inflow from operating activities includes an increase in short-term liabilities related to capital investment of £6.9 million. Cash and short-term investment balances are expected to reduce in the coming year as the University continues to implement planned investments in academic staff, information services and the estate.
Chief Financial Officer