Annual Review 2008-09
The University's operational surplus of £672,000 compares to a surplus
of £1.974 million achieved in 2007-08. However, the results include
significant staff severance costs of £1.962 million as part of an exercise
to reduce the recurrent cost base.
Last year saw substantial change for the University with new management
accountability arrangements in place to deliver improved financial
performance across the University, a new financial strategy, an ambitious
capital investment plan, successful implementation of a new financial system
and the conclusion of a £5 million cost reduction exercise. The evolution of
our four faculties, along with professional and commercial services, into
devolved budget centres responsible for all operating activity within the
University has already reaped dividends with a greater focus on strategic
planning and a tighter grip on staff costs.
Turnover for the year grew by 12.5 per cent to stand at £123 million driven
- A 28 per cent increase in home/EU tuition fees, reflecting the final
tranche of variable fee income along with growth in home/EU student numbers.
- A 10 per cent increase in HEFCE (Higher Education Funding Council for
England) teaching grant, reflecting growth in home/EU student numbers.
- A 17 per cent increase in overseas tuition fee income reflecting volume
growth due to both strong recruitment and the acquisition of the
international pathway programmes of Insearch Ltd, a former partner awarding
higher education certificates validated by the University.
- A 15 per cent rise in research grant and contract income on the back of
a 25 per cent rise in UK Research Council funded projects.
- A 32 per cent increase in NHS contract income reflecting continued
growth of nursing and allied health professional programmes.
Staff costs grew by 9 per cent over the year, excluding FRS17 adjustments,
largely as a result of cost inflation arising from a 5 per cent pay award in
October 2008 and increased funding for past service deficits on our two
support staff pension schemes. Staff costs represented 59 per cent of total
income, a decrease from the 62 per cent in the previous year. The
University's new financial strategy has set a target of reducing staff costs
by the start of 2010-11 to a level that is in line with a benchmark of peer
The University's new financial strategy has set a target operating
surplus of 3.5 per cent to be achieved by the commencement of the 2010-11
financial year. Hence the 2008-09 outturn of 2.1 per cent demonstrates that
the University is on track to meet its target despite having to fund
exceptional levels of pay inflation during the year.
Essex is placing increased emphasis upon income from philanthropic
sources and is delighted to acknowledge the receipt of a £1million legacy
from the estate of the late John Silberrad from Loughton to fund
postgraduate research scholarships.
Finally, the capital investment plan has commenced with the construction
of new student residences in Southend, along with a range of smaller but
high profile projects across the University.
The financial climate is a challenging one but the University is laying
the foundations so that it is in a strong position to thrive. Last year's
financial results and strong student recruitment provide evidence of a
successful start to the new strategy.
|Funding council grants
|Tuition fees and educational contracts
|Research grants and contracts
|Endowment and investment income
|Other operating expenses
|Loss on joint ventures
|Surplus for the year