University finances: building on our strengths to invest in the future

• This blog outlines how Oxford is managing sector-wide financial pressures while continuing to invest in teaching, research and infrastructure

• Simon explains the University’s financial position, the steps being taken locally and centrally, and plans for long-term sustainability

• Simon invites you to watch the latest finance webinar to learn more

With the financial challenges of the higher education sector being played out in the media on a near-daily basis, I am often asked how the pressures faced by other institutions impact Oxford.  

A stronger position than others, but not immune 

Fortunately, we are in a stronger position than most other UK universities, for a number of reasons. For example, we have a more diverse funding stream which means we are less dependent on fee income than others. We have the largest endowment fund in the UK sector (although it is small compared to US competitors). We also have successful spinouts and industry collaborations. Finally, we have a global reputation as a centre of teaching and research excellence, with some of the world’s most treasured academic collections.  

However, we are not immune to the pressures. For example, it’s becoming more competitive to secure research funding, and to cover the full cost of research. UK undergraduate student fees have been static for several years (although will increase slightly this year). Inflation has been high for several years, and there are a range of UK and international political and financial risks in what is a very uncertain world.  

The steps we are already taking 

The good news is that we are already collectively taking steps across the University to ensure we maintain our strong position in light of the pressures we face. 

For example, divisions and departments are working extremely hard to balance their books – to avoid financial deficits. This is not an easy task in this challenging time. We have been using new methodologies such as ‘Transparent Approach to Costing (TRAC)’ to help us understand more about how our activities affect our costs and income. You can find out more about TRAC in the webinar recording at the end of this blog.  

We’re also working hard to increase revenue through commercial and industrial contracts and spinouts, as well as identifying new sources of teaching income such as online, part-time and non-matriculated programmes. Fundraising also continues to remain important, as we are one of the largest recipients of philanthropic income in the sector in the UK.   

Ensuring a strong performance in the Research Excellence Framework in REF 2029 will also help safeguard an important source of research funding.   

Focus for the future 

While we are taking a lot of positive steps now, the sector financial pressures are not going away, and it is important that we work together across the University to manage our finances sustainably in the years ahead.  

Some of this can be done at a local level, through departments continuing their careful work managing local budgets, and working in more joined-up ways. For example, sharing space and resources can free up funds for departments to invest in the activities that deliver world-class education and research.  

In these challenging times we also need to ensure we have sound financial planning and careful management of spending, and we need to ensure we are as efficient as possible both at a departmental and a University-wide level. 

Strategic investments across Oxford 

We also need to work together pan-Oxford to make strategic investments in activities that cannot be funded by individual parts of the University. 

This means focusing on the pay and conditions of our staff in line with our People Strategy, investing in our world-class buildings and facilities in line with the Estate Strategy, and ensuring we have digital services and infrastructure that are fit for the future, through investment in our digital transformation. 

The 3-year Settlement is an important mechanism for agreeing our investments. The Settlement is the process by which we will collectively agree the funding we will put into our services, our estate and strategic investments in the period from 2026 to 2029, while ensuring financial sustainability.  

We will be agreeing the settlement in the next academic year – working hard to ensure we invest carefully and strategically in the activities that will make the long-term difference to our teaching and research while ensuring the financial sustainability of the University.

There will be plenty of opportunities to feed into the process, and more information will follow in the coming weeks and months.  

By working together in a collegiate way across the University and building on our unique strengths, I believe that we will be able to weather the financial higher education storm and continue to further our academic and research mission long into the future.  

To find out more about Oxford’s finances, watch the latest University Finance webinar.