HE income tops £23 billion, and staff costs take up 56 per cent

April 30, 2009

The total income of UK higher education institutions rose to more than £23.4 billion last year, figures released this week reveal.

Data from the Higher Education Statistics Agency show that income rose by 10.3 per cent in 2007-08 compared with the previous year. However, expenditure increased by a similar margin, up 8.9 per cent from £21 billion to £22.9 billion. Grants from funding bodies remained the sector's largest source of income, exceeding £8.5 billion for the first time and accounting for 36.3 per cent of total university funding.

Among other income streams, endowment and investment funding grew by the biggest percentage, up 24.6 per cent from £408 million to £508 million year on year.

Despite this dramatic increase, the streams were still drops in the ocean, accounting for just 2.2 per cent of the sector's total income.

Staff costs remained the most significant expense incurred by universities, rising by more than 8 per cent to £13.1 billion - 57.3 per cent of the sector's outgoings.

The figure comes as wrangling over the next pay deal between the University and College Union and the Universities and Colleges Employers Association heats up. This week, Ucea offered staff a 0.3 per cent pay rise, far short of the 8 per cent demanded by the UCU, which is balloting for strike action.

The University of Oxford responded to Hesa's figures, which are published in its HE Finance Plus 2007-08 document, by highlighting that it had generated the highest levels of external research income. It brought in £285.3 million, up 14.9 per cent on the previous year.

John Hood, the vice-chancellor of Oxford, heralded this as "a vote of confidence in (our) ability to conduct world-leading research into that which we do not understand".

However, he sounded a note of caution about the ability of universities to maintain levels of external research income during the recession. "More than ever, the generosity of donors and benefactors is crucial to our endeavour," he said.

john.gill@tsleducation.com.

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