Financial Review 2021–22
The College’s deficit before other gains and losses was £96.2 million in 2021–22 compared to a surplus in the prior year of £22.9 million. The overall deficit, including gains and losses on investments, was £123.6 million (2021: surplus £161.7 million), with some of the investment gains of the prior year partly reversing in 2021–22. These deficits incorporated a large increase in pension provision (£153.0 million) following the conclusion of the latest USS actuarial valuation. The figures also include capital grant income of £36.1 million (2021: £44.2 million) that is ring-fenced for investment in our asset base and a much higher level of donation and endowment income (£64.4 million) compared to recent years, the vast majority of which has been secured for specific purposes.
The value of the College’s net assets fell year-on-year to £1,735.1 million (2021: £1,858.7 million), again mainly because of the increased pension provision.
Cash from operating activities fell to £54.6 million (2021: £135.3 million). A reduction in the amount of capital investment meant the overall level of cash at the end of the year (£367.8 million) was still £8.0 million higher than at the start.
Tuition fees and education contracts
2020–21 had been the first year that tuition fees and education contracts contributed a larger share of income than research grants and contracts and these were the main driver of the increase in income in 2021–22, growing to 36.4% of total income.
Student numbers increased by 2% in 2021–22 as undergraduate intakes remained closer to the levels of the last couple of years rather than reverting to pre-pandemic levels. Although postgraduate student numbers dropped, postgraduate tuition fee income increased by 9.8% as the number of full-time students paying overseas fees was around 25% above the number paying home fees, in the prior year it had been lower. The overall increase in fee income from taught awards was £18.3 million at undergraduate level and £14.4 million at postgraduate level.
The drop in income from home-fee paying students in 2021–22 was Brexit-related, as many EU-domiciled students were no longer eligible to pay home fees. Enrolment by EU students was down 55% in 2021–22, although EU countries continued to provide us with 20% of our students in 2021–22 and represented four out of the top ten countries by student headcount. These top ten countries provided 77% of our total student population by headcount with the remaining 23% spread across other nationalities.
Demand for undergraduate places continues to rise steadily, with the number of applicants for each first-year place growing to 9.0 in 2021–22 (2021: 7.9). Demand at postgraduate level fell slightly in 2021–22 but was still well above pre-pandemic levels.
2021–22 Income by source (£ million)
2020–21 Income by source (£ million)
Funding Body grants
Our Funding Body grants (Office for Students for teaching and UK Research and Innovation for research) amounted to £151.7 million in 2021–22.
Our teaching grant allocations have fallen as the Department for Education has removed additional financing for students attending courses in London. These funds have been redistributed to high-cost subjects and while we offer these courses, the overall impact has been a 2.7% drop (£4.3 million).
Research grants and contracts
Research grant and contract income of £368.4 million that was recorded in 2021–22 was up 1.5% on the prior year. This figure represents in-year activity and not the value of new awards won in the year, as income from research grants can generally only be recognised when performance-related conditions have been met.
The split of income by funder group was broadly unchanged from the previous year. In terms of new awards won, it was encouraging to see the increased volumes being secured from industrial and charity partners.
The total remaining balance on all research awards won was £797 million at the end of 2021–22, so our order book remains resilient.
Donations and endowments
Donations and endowments grew to 5.5% (£64.4 million) of total income (2021: 2.2%, £24.0 million). This included £25 million to launch the Brahmal Vasudevan Institute for Sustainable Aviation.
Income from residences, catering and conferences increased by £17.9 million compared to the prior year and represented around a third of Other income. This was mainly a result of the occupancy level in student accommodation recovering to 98% compared to the average of 64% in the prior year when pandemic-related restrictions were still in place.
A further third of Other income is related to provision of scientific services and consultancies, and recharges for the salaries of NHS staff who work for the College. Both income streams are largely offset by related costs. For example, consultancy income was £3.6 million lower in 2021–22 than the prior year because we were not operating the COVID-19 testing programme.
Investment income comprises interest income on cash deposits held and interest and investment income from endowment assets. These all showed small increases as interest rates started to rise.