Imperial’s financial results in 2018–19 are dominated by a £118.6 million increase in the provision for our contribution to the USS pension deficit recovery plan. This follows the finalisation of the 2017 valuation during the financial year. This non-cash charge has turned what would have been a net comprehensive income surplus of £79.2 million into a deficit of £39.4 million.

The 2018 USS valuation was finalised in September 2019 and will result in around £75.4 million of this increase being reversed in 2019–20. The extreme volatility is due to the College being required to account for the value of pension deficit funding it is committed to in the period that the new schedules of contributions are signed.

Our cash generation from operations fell to £78.4 million, £33.5 million down on the prior year. Although tuition fee income and funding for research overheads both increased, these were outstripped by the growth in internally funded operating costs. In part this reflects decisions we have made to invest in, for example, the quality of the teaching and learning experience for our students; for example over 60 new staff were recruited last year to help review our curricula and update our teaching approaches.

However, it also reflects the growing cost of employment, with the College agreeing a pay settlement for 2018–19 that was above the national pay level and the rising cost of pensions, see the Principles of Remuneration section.

The level of cash has not materially changed during the year. It was expected to decrease as investment into our capital programme continued (£178.8 million) however, unplanned
assets sales meant this did not happen. We expect our cash balance to reduce in the next couple of years as we complete the current phase of our capital programme.

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