FINANCIAL REPORTS

THE financial reports from universities in the year to July 2019:

SWANSEA UNIVERSITY – TOTAL £43.7M DEFICIT, OPERATING DEFICIT – £42.6M

Income increased by 14.3%, from £308.2m in 2018 to £352.4m in 2019. The proportion of the university’s gross income spent on financing debt (principal plus interest) went down from 3.66% in 2016-17 to 3.12% in 2018-19. Interest paid on financing debt went up from £5m to £5.4m.

Loan repayments during the year – £3.3m. Total cost of financing debt – £8.7m. % of Total Income in 2019 – 2.5% Reserves fell £56m from £161.9m in 2018 to £105.9m in 2019. During 2018-19 the university drew down a further £60 million loan from the European Investment Bank (EIB). This was for funding for investments and capital expenditure incurred by the university, a spokeswoman said.

Swansea said in a statement: “Swansea University has seen sector-leading growth and has one of the most successful track records of any university in recent years.

“The deficit was triggered by a number of one-off charges or movements, and pension liabilities in particular have seen large movements over a number of years, not just in Universities.

“Also like all universities in the UK, Swansea is not immune to the effects of a fall in 18 year-olds over the next few years which means increased competition.

“Our student recruitment remains very strong and buoyant and with Swansea being the WhatUni University of the Year for the second time, as voted for by students, it is not surprising. We do, however, need to take some sensible steps to reduce our costs in the next few years.”

WREXHAM GLYNDWR UNIVERSITY – DEFICIT OF £615,000

Total income levels grew by £534,000. Wrexham vicechancellor Prof Maria Hinfelaar said in the report: “Financially, there are challenges for the university and for the wider HE sector...

“We find ourselves in times of great uncertainty. The ramifications of Brexit, possible changes to the funding of higher education and new legislation for the proposed new funding council for tertiary education in Wales are just some of the developments giving everybody in the sector food for thought. I am confident, however, that the university is strongly placed to face whatever lies ahead.”

UNIVERSITY OF SOUTH WALES The university ended July 31 2019 with an operating surplus down £5.6m to £2.3m. Income rose 6.1% to £195.7m, but spending rose and cash generated from operations decreased by £3.9m to £26.5m. Net assets also decreased by £18.5m to £75.6m. USW’s report warns: “Full time home and EU undergraduate fees remain capped at £9,000 with no increase to reflect inflation.

This presents challenges as we have a potentially flat income stream but are still subject to significant inflationary pressures from staff pay awards, additional pension scheme costs, and general inflation.

“It is essential that we are able to continue to attract and retain talented students from both the UK and overseas.”

CARDIFF UNIVERSITY– £117.4M TOTAL DEFICIT.

Within that the university’s operating deficit was £6.9m, a £16m improvement on 2017-18. Income rose £20m to £538m and spending increased by 5.2% to £552m. There was record research income of over £116m. Cardiff says it now contributes £3.23bn to the UK economy. Borrowings at the year-end totalled £306.6m of which the public bond totalled £294.5m. This incurs interest of 3.1% a year and is repayable in 2055. The two main sources of income remain tuition fees, which saw an increase of £14m to £279m, and research grants, which increased by £10m to £116m. The university explained that the large gap between its operating deficit and overall deficit was one-off pressures in the year, including £6.5m for a voluntary severance scheme as jobs were cut and a massive £92.9m bill for USS pension costs and 2017 national re-evaluation of the scheme.

A spokesperson said: “We believe the last two years of financial deficits are now behind us and we look to the future with cautious optimism.

“The university is planning to return to an operating surplus in 2019/20. With a focus on sustainable investment to reinforce core activities, the university is in a strong position to weather the uncertain external climate and further build on its status as an ambitious and innovative institution.”

CARDIFF METROPOLITAN UNIVERSITY – £178,000 SURPLUS

This was reduced from mid-year forecast of £4.5m as a result of pension charges, the university said. Turnover was £107m, up 7% in two years. Research and innovation income was £8.4m, up 42% in two years and £13.1m was generated for reinvestment.

BANGOR UNIVERSITY – £19.8M DEFICIT

Bangor’s financial report 2018-19 highlights risks including Brexit research funding, student numbers and “inability to sustain the financial health of the institution and maintain liquidity at a time of significant economic constraints and heightened competition”.

The document goes on to warn that there is also a risk from “inadequate response to an increasingly competitive market”.

Pension costs are also an impending drain and there is “the potential impact of the continued escalation in the cost of providing Defined Benefit pensions and in the case of the USS servicing the significant deficit.

A Bangor spokesman said Taking both one-off situations away Bangor would have been close to break even both years, he said.