Reflecting on our financial position

• This blog provides an update on the University's financial position following the publication of its financial statements

• Simon Boddie summarises the positive aspects of our finances, as well as some of the challenges and how we can respond to these

• Simon also invites staff to attend a webinar to find out more about this topic

After a flurry of activity, the University published its annual financial statements just before Christmas.

There was a lot to be positive about.

Our total income was £3.1bn – an underlying increase of 3% from £2.9bn the previous year; we executed 6,905 research agreements, leading to research income of £778.9m (higher than any other university in the UKI); and we made an adjusted surplus of £119.5m – up from £117.3m in 2022/23.

We also received £263m in new one-off cash gifts and pledged commitments – the largest total ever received in a single year. And we announced the significant investment in our staff, with £129m over 5 years for pay and benefits. In addition, we provided £10m in bursary support for UK students from low-income households, and uplifts to our wider student bursaries offer.

This is fantastic news and puts Oxford in a strong position for the future.

Ongoing pressures

However, we are not without our challenges.

For example, our underlying costs increased by 3.6% and capital expenditure on property, plant and equipment totalled £194m – up from £153.2m in 2022/23.

The higher education sector as a whole also faces ongoing financial difficulties. Despite the new government’s plans to increase undergraduate fees, and despite falling inflation, the sector is still experiencing stalling overseas student growth, under-recovery of research costs and ageing estates.

Oxford’s unique funding situation (with more diverse funding streams than many other universities, such as a high level of research income, a large endowment and additional sources of funding such as from Oxford University Press) means we are more protected from these factors than others – but we are not immune to them.

The University also has significant ambitions for the future, with a commitment to investing in our people through the Pay and Conditions Review; significant investment in our estate and digital transformation; and ensuring that we can continue to focus on our world-leading teaching and research mission through the ambitious new Strategic Plan now in development.

Careful management and our long-term response

One of the ways in which we can ensure we can respond to the pressures we face is by the careful management of our finances – avoiding budget deficits and carefully managing our surpluses.

As a charitable organisation, our primary purpose should of course be our academic mission, and I fully appreciate that, in the current environment, it is increasingly difficult for some parts of the University to reach a surplus position.

However, avoiding deficit positions allows us to maintain our short-term financial sustainability while carefully investing our surpluses in longer-term priorities (either at a local or University-wide level), which will allow us to fulfil our teaching and research ambitions in the future.

This will be particularly important in the year ahead, as we start to focus on two critical matters for the University: the next three-year settlement of our infrastructure charges to departments (comprising the service, space and contribution charges), and developing the streams of work to support the delivery of our Strategic Plan.

An opportunity to find out more

Our financial results, our approach to managing our finances, and our long-term planning will be the key focus areas of our next all-staff webinar about University finances.

These webinars are part of our commitment to demystifying the University’s complex finances; I would encourage anyone with an interest in this area to sign up.

Despite our challenges, I remain reassured by our robust financial position and look forward to telling you more at the webinar, and throughout the rest of this year.