Financial Statements 2019/2020
FINANCIAL REVIEW FOR THE YEAR ENDED 31 JULY 2020 (continued)
— Failure to achieve student recruitment and retention targets
As previously stated, tuition fees are a substantial proportion of the University’s total income, being dependant on both strong recruitment and retention to ensure financial performance is in line with forecast. In what is an already difficult environment, with increased competition for a reduced number of 18 year olds, COVID-19 has further increased the risk in this area. Limits on international and domestic travel, social distancing rules, changes in provision of teaching and learning on campus, and the possibility of future lockdowns could all have an impact on our recruitment of students (particularly from overseas) and on ensuring enrolled students continue with their studies.
The University has followed Government advice in responding to the COVID-19 pandemic, and for the new Academic year has moved to a responsive, blended learning model with a mix of virtual and face-to-face teaching. This is a flexible model that can be adapted to students’ needs, and is designed to maximise student engagement and success. In addition the University has sought to move many student support services online so that these can be accessed from wherever the student is.
More generally, the University will mitigate the risks of volatility in the undergraduate student cohort through the continuous review of its course portfolio, assessing our areas of strength, identifying the areas at risk and deciding on the most sustainable curriculum. The University also has plans to improve student retention.
A key aim of the University strategy is designed to further improve the student learning experience, including providing an inspiring choice of courses and learning pathways that empower students with ambition, skills and knowledge to succeed.
— Impact of Brexit
The UK is due to leave the European Union following the transition period on 1 January 2021. Continuing uncertainty over the outcome of the Brexit negotiations may negatively affect our recruitment and retention of both EU staff and students, as well as having a wider impact on research and innovation, such as access to EU research funding. It has already been confirmed that students from the EU commencing courses from 2021/22 Academic year are no longer eligible for home fee status.
We have experienced a decrease in the recruitment of EU students for the academic year 2020/21 which could be attributed to the Brexit negotiations and its implications on applicants from the EU.
The University aims to mitigate against these risks both through sound financial and strategic planning and through playing an influential role in engaging with policy makers in actively shaping policy and agenda-setting. We are also developing new recruitment channels within EU countries.
— Unaffordable operating and pension costs In the current economic climate costs are rising at a higher rate than income with significant pressures from legislative compliance, non-pay inflation, rising employer pension costs and exchange rate volatility. In addition, the University’s ongoing response to the COVID-19 pandemic has incurred additional costs.
The University has effective cost control measures in place as part of its management of operations to mitigate rising costs.
Pension costs and contributions are not within the University’s direct control and in recent years we have seen considerable increases in pension costs that impact on both the University’s income and expenditure and on the level of our reserves.
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Middlesex University
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