FINANCIAL REVIEW FOR YEAR ENDED 31 JULY 2021
(continued)
OPERATING EXPENDITURE
Tuition Fees and Education Contracts accounted for 77.6% of the University’s total income. Of this, 67.5% related to fees from UK and EU full-time students. We exceeded our target for UK/EU Undergraduate recruitment, albeit this was at a lower level than the previous year. UK/EU Postgraduate income was £9.5m, an improvement of £1.5m compared with the prior year. Income from full-time international students maintained the high level seen in 2019/20, which itself represented a significant increase from the prior year. This improvement has been driven by large intakes of students starting programmes in both January 2020 and January 2021, linked to the government’s re-introduction in late 2019 of two-year post-study work visas for international students. Income from CPD and short courses has decreased slightly but remains steady, whilst Apprenticeships continued to be a growing area for the University.
Funding Body Grants represent 9.4% of total income. This represents an increase on the previous year, with much of this being the £1.2m additional funds provided by the Office for Students to support student hardship as a result of the pandemic. The Recurrent Teaching Grant has decreased by 7% but there were increases in the Higher Education Innovation Fund (HEIF), whilst Research Funding remains at a similar level to the prior year.
Research Grant income was £4.8m (1.6% of total income), an increase of £1.5m compared with the previous year. This is primarily due to income from a new grant commencing in 2020/21, funded by NHS Test & Trace, which involves analysing wastewater for traces of COVID-19.
Other Operating Income (including investment income and new endowments) totalled £21.7m and represented 10.6% of total income; this has decreased by £6.7m compared with the prior year. The main reasons are a reduction in accommodation income due both to the impact of COVID-19 (decreased demand and rent rebates) and a sizeable number of rooms being unusable for much of the year due to flooding, and a reduction in other services rendered from the prior year, which included some one-off income from Health Education England. Offsetting this are increases in income from our Academic Partnerships and our overseas subsidiaries.
Expenditure in the year, including LGPS pension service costs and interest charge, totalled £208.6m, a 3.8% decrease from the prior year.
Staff costs (excluding restructuring costs) increased slightly against the previous year by £0.8m (0.7%) to £121.8m. These costs represented 58.4% of total expenditure. The LGPS service cost has increased by £2.1m; if these costs are excluded, there would have been a £1.3m decrease in staff costs year-on-year reflecting the continuing scrutiny over recruitment decisions.
Spend on other operating expenses decreased by £8.4m to £66.9m compared with the previous year, and represents 32.1% of total expenditure. Premises costs decreased by £1.2m due to the termination of the lease of our New Southgate campus in 2019/20. The accommodation charge was significantly reduced due to the unavailability of a number of rooms under the agreement we have with Unite Students. Elsewhere, the impact of COVID-19, particularly nationwide lockdowns, reduced our spend in areas such as travel, printing, publications and equipment.
Depreciation was £13.2m, a small increase (£0.2m) against the prior year. Depreciation made up 6.3% of total expenditure in 2020/21, reflecting the significant investment the University has made over the last few years in our infrastructure at the London campus.
Interest and other finance costs have decreased by £0.6m against last year to £6.3m. This reflects a reduction in the ongoing interest expense as we pay down the bank loans utilised to fund the London campus estate infrastructure developments, which this year was £3.9m.
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Middlesex University
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