Our total expenditure in 2018–19 was £1,129.6 million. This includes an increase of £118.6 million in the USS pension provision which is discussed further in the Expenditure on staff section below.
The underlying growth in expenditure, excluding the pension provision, is 6.8% (£64.2 million).
Expenditure on staff
on our resources and will be monitored carefully going forwards.
Expenditure on non-staff costs
Total cost by category (£ million)
Cash from operating activities fell by £33.5 million to £78.4 million. This reflects the growth in spend, particularly staff costs, outstripping the growth in income.
Favourable working capital movements have helped mitigate what would have been a higher reduction by contributing £15 million overall, with the net amount of pre-funding we receive from research partners increasing by £18 million.
Although we broadly maintained the level of investment in our infrastructure, our net investing activities were lower by £38 million this year. This was partly due to the property sales that are detailed in the other gains and losses section below and also a result of the disposal of £38 million in investments managed by our external fund managers.
The cash outflow from financing activities was slightly higher in 2018–19 than the prior year as we started repayments on a recent amortising loan. Overall though, the level of cash and cash equivalents at the end of the year was slightly higher than in the prior year despite the reduction in the level of cash from operations.
The College invested £178.8 million on fixed assets in 2018–19, continuing its significant investment into its infrastructure. Internally funded spend has reduced over the past five years as we complete the current phase of our capital programme, which included the major investment at White City.
Significant capital projects completed in 2018–19 included the second phase of the refurbishment of the former Post Office building at the South Kensington Campus, for use by the Dyson School of Design Engineering. The 34-storey residential tower at the White City Campus was due to be completed in January 2019.
A major flood two months prior to this has pushed the project back by about a year. Despite this setback, demand has been strong for 59 key-worker apartments set aside for the Imperial academic community.
The Sir Michael Uren Biomedical Engineering Research Hub is due to complete in January 2020, at a cost of £126 million, providing laboratory and office space for interdisciplinary, translational research initiatives at the interface of biomedical sciences and engineering. Construction continued during 2018–19 on our latest hall of residence, which will deliver 729 student bed spaces and 85 residential apartments at North Acton. This project is due to complete in July 2020
Other gains and losses
The £3.4 million gain on disposal of non-currents assets is a combination of gains from sale of properties offset against the deconsolidation of the College’s students’ union. The material movements are detailed below.
The largest gain on a property sale was £7.9 million which arose from the disposal of a commercial research building on the Babrahams Research Campus in Cambridge. The total construction cost was £13.5 million and it was sold, fully tenanted, for £20.9 million in March 2019. The Endowment’s property portfolio made gains of £2.9 million from the sale of properties. This is part of their strategy to realign the portfolio to focus on assets close to our existing estates in London.
Up until 23 November 2018 the College’s students’ union results were consolidated. Its constitution was changed to give it more control over their day-to-day activities with the College no longer able to change the Union’s bye-laws. This triggered a review which concluded that it was no longer appropriate to consolidate its results, aligning its status with the majority of students’ unions within the sector. This resulted in a loss on disposal of non-current assets of £7.6 million.
The £15.5 million gain on investments is a combination of gains and losses, with the material movements highlighted. There was a gain for the Endowment’s externally managed investments (£22.9 million) and a gain for one of our properties that has been reclassified as an investment property.
This was triggered by a school entering into a lease to use it, and it is now held at market value instead of cost (£22.2 million gain). This was offset by a loss in the College’s holding in IP Group plc, driven by a 40% share price reduction during the year (£30.4 million).
The £1.9 million deficit in associate relates to the College’s share of the operational loss reported this year by TWIG, a company that leverages an online platform providing resources to primary schools.