Presentation on theme: "Financial sustainability at LSE Financial past, present and future Changes from 2007/08 to 2008/09 Sources of income 2008/09 Cannot repeat past growth."— Presentation transcript:
Financial sustainability at LSE Financial past, present and future Changes from 2007/08 to 2008/09 Sources of income 2008/09 Cannot repeat past growth and once-offs Costs of investment in quality Adverse external environment Known unknowns – 2010 to 2015
2007/8 to 2008/9 2007/8 surplus £26.8m Income Decrease in funding council grants 0.2- Increase in fees5.3 Increase in research grants2.5 VAT PESM reclaim2.8 Increase in other income3.2 Decrease in endowment income1.1-£12.5m+ Expenses Increase in staff costs12.6- Increase in other expenses7.6- Increase in depreciation1.5-£21.7m- 2008/9 surplus£17.6m Most other HEIs much lower – implementing cuts, cancelling capital projects
Sources of income (£M) – 2008/9 IncomeExpense Surplus Teaching and research150.7150.0 0.7 Residences and catering 26.0 26.2 0.2- –Sub total176.7176.2 0.5 Ancillary programmes 22.7 14.8 7.9 Financing/other 6.4 2.8- 9.2 Total205.8188.217.6
Cannot repeat past growth and once-offs GrowthAnnual Student numbers +1650 since 2003/04 NQ Fee scale changes NQ Over recruitment £3.0m est FEC implementation£2.0m est APB income increase since 2004/05£5.0m Residences improvement since 2003/04£4.0m Once-offsAmount VAT reclaim£2.8m School equities divestment£0.7m Silver Walk profit on sale£3.6m
Costs of investment in quality Expenses2010/11 Teaching Task Force£3.2m LSE 100£0.7m Research Investment Fund/PI Fund NQ Services Development£4.4m Infrastructure and resilience£1.1m Living Wage£0.6m Interest cost of 10 year (non res) development£9.0m Capital (10 years) New Student Centre£36m Research Hub/Towers£ 8m Centre Buildings£90m Refurbishments/Technical Infrastructure£46m Residences£??m
Adverse external environment HEFCE funds – RAE/QR£2.5m- HEFCE funds – in year change£0.1m- IBSS funding£0.1m- Endowment income shortfall£?.?m- Interest income£?.?m- NI/Pension – 2009/2011£3.0m- These are included in the forecasts
Known unknowns – 2010 to 2015 HEFCE Fees review - fees Fees review – substitution? Fees review – bursary commitments Fees review – national bursary schemes risk PGT in Price Band D review (£1.0m-) Teaching funding methodology review REF/Research funding methodology Capital funding Other Competition for students Competition for research Pensions – SAUL Endowment Income/Interest income and expense Carbon Reduction Commitment/utilities Sustainability of APB/Other Income VAT increase above 17.5%? Fundraising Unknown unknowns?