A presentation from the Higher Education Funding Council Annual Meeting 2017.

1. Financial Health of the Sector &
Related Developments
The HEFCE Annual Meeting
Professor Madeleine Atkins
Chief Executive
26 October 2017

2. Four themes dominating the HE Landscape
• Brexit
• Industrial Strategy and
Skills
• Social mobility & the
Student Interest
• Finance and Funding

3. Brexit: common themes
Concerns:
• Global talent and mobility
• Research and innovation
networks/collaborations
• Finance and funding
• Regulations and standards
• Rights of EU staff members
Opportunity:
• Review existing/future
research and innovation
programmes within the EU
• Identify new partnerships
and development
opportunities outside the EU
• New international strategy
for research and innovation:
government; institution;
researcher

4. Industrial Strategy and Skills
• White Paper and Budget
• National skills initiatives
• Devo in England
• UKRI and OfS joint agendas

5. Skills
• Productivity at relatively low
level compared to G7
• Investment by employers in
training on downwards
trend.
• Graduate employability
agenda
• Employer skill demand met
through collaboration with
providers

6. Social Mobility & the Student Interest
• Defining ‘students’
• End to end thinking
• Routes and choices
• Careers advice and
information
• Potential of linked databases

7. Finance and Funding
• Student recruitment
• Financial forecasts

8. Home, EU and international recruitment

9. Change in acceptances to providers across UK
by domicile and age group

10. Change in acceptances to provider tariff
groups by domicile and age group

11. Forecast total change between academic years
(Home and EU FT UG FTEs)

12. Forecast total change 2016-17 to 2019-20
(Home and EU FT UG FTEs)

13. Forecast total change between academic years
(Overseas FT UG FTEs)

14. Forecast total change 2016-17 to 2019-20
(Overseas FT UG FTEs)

15. Forecast total change between academic years
(Home and EU PGT FTEs)

16. Forecast total change between academic years
(Overseas PGT FTEs)

17. Forecast total change 2016-17 to 2019-20
(Total PGT FTEs)

18. Forecast total change 2016-17 to 2019-20
(Total PGR FTEs)

19. Summary of key financial indicators
Actual Forecast
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Total income £28,030M £29,087M £29,697M £30,972M £32,060M
£31,947M
£33,448M
£33,114M
Surplus as a % of
total income
£833M
3.0%
£1,518M
5.2%
£913M
3.1%
£408M
1.3%
£686M
2.1%
£573M
1.8%
£1,135M
3.4%
£802M
2.4%
Cash flow from
operating activities, as
% of total income
9.1% 10.2% 8.4% 7.3% 8.0%
7.6%
9.1%
8.2%
Net liquidity, as
number of days’
expenditure
127 135 128 104 88 81
External borrowings,
as % of total income
29.4% 30.7% 33.8% 36.6% 36.8% 35.1%
Unrestricted reserves,
as % of total income
101.5% 98.1% 100.7% 98.7% 98.4% 98.5%
Financial projections adjusted for fee freeze

20. Projected real terms change in overseas fee
income
-100%
-50%
0%
50%
100%
150%
200%
250%
Percentagechange2015-16to2019-20
Specialist HEI
High tariff
Medium tariff
Low tariff
Sector average
Sector average 26.1 %

21. Summary of key financial indicators
Actual Forecast
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Total income £28,030M £29,087M £29,697M £30,972M £32,060M
£31,947M
£33,448M
£33,114M
Surplus as a % of
total income
£833M
3.0%
£1,518M
5.2%
£913M
3.1%
£408M
1.3%
£686M
2.1%
£573M
1.8%
£1,135M
3.4%
£802M
2.4%
Cash flow from
operating activities, as
% of total income
9.1% 10.2% 8.4% 7.3% 8.0%
7.6%
9.1%
8.2%
Net liquidity, as
number of days’
expenditure
127 135 128 104 88 81
External borrowings,
as % of total income
29.4% 30.7% 33.8% 36.6% 36.8% 35.1%
Unrestricted reserves,
as % of total income
101.5% 98.1% 100.7% 98.7% 98.4% 98.5%
Financial projections adjusted for fee freeze

22. Forecasts v. actual (Home and EU UG FT FTEs)

23. Forecasts v. actual (Home and EU FT UG fee income)

24. Forecasts v. actual (Overseas UG FT FTEs)
Actual

25. Forecasts v. actual (Total PGT FTEs)
Actual

26. Forecasts v. actual (Overseas fee income)
Actual

27. Forecasts v. actual (Total income)

28. Capital expenditure by funding type
-
1,000
2,000
3,000
4,000
5,000
6,000
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
£Millions
Receipts from sale of
fixed assets
Capital grants receipts
New loans
Net capital to be
financed from internal
cash

29. Net funds/debt
-
2,000
4,000
6,000
8,000
10,000
12,000
14,000
31/07/15 31/07/16 31/07/17 31/07/18 31/07/19 31/07/20
£Millions
Net liquidity (actual) Net liquidity (forecast) Borrowing (actual) Borrowing (forecast)
Position as at 31/07/17 is an unaudited year end projection

30. Thank you for listening
m.atkins@hefce.ac.uk