Financial Statements 2017/18


Financial Review continued


Operating Expenditure


Expenditure in the year totalled £199.1m, a 2.2% increase over the restated prior year.


Staff costs increased against the previous year by £5.8m (5.0%) to £116.5m; an additional £1.1m was incurred relating to the restructuring of academic and administration provision across the University. Staff costs (excluding restructuring costs) represent 56.9% of total income. Average staff numbers remained at a similar level to the previous year, with the majority of the increase relating to pay inflation and pay scale movement. Pension service cost and contributions of £18.7m represent a high proportion of staff expenditure, increasing from £14.8m in 2016/17. This increase includes the impact of employers current scheme funding of the Local Government Pension Scheme (LGPS) of 18.4% of pensionable salaries, 7.1% more than the 2016/17 level. The pressures on staff costs from rising LGPS and Teachers Pension Scheme (TPS) contributions will require the University to manage increases as part of its strategy.


Spend on other operating expenses reduced by £0.8m to £62.4m compared to the previous year. The 2017/18 figures include a one-off credit (after associated costs) of £0.8m; this relates to a VAT refund from HMRC following a recent ruling on VAT applied to payments made to overseas recruitment agents by Universities. Once this and the Unite Halls prior year cost adjustment has been removed, the underlying position of £59.9m is £2.2m (4%) higher than last year. As a % of total income, this adjusted figure is 29%, 1% higher than the previous year. This partly reflects cost inflation rising at a higher rate than tuition fees.


Depreciation has increased by 3% on 2016/17 to £11.9m, reflecting the long period of estates development at the London Campus.


Interest costs have decreased £1.3m against last year. In part this reflects the lower net charge of £2.6m (from £3.1m in 2016/17) on the University’s LGPS liabilities. An ongoing interest expense for the University relates to the bank loans utilised to fund the London Campus estate infrastructure developments, which this year was £4.3m, representing a decrease on 2016/17 of £0.4m, as a result of the switch of some of our bank loans from fixed to variable interest rates.


44


Middlesex University


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