2020/21 Financial Statement published

The University of Reading has published its financial statements for 2020/21. The results for the first full year affected by the COVID-19 pandemic demonstrate the University’s strong financial resilience.

In this financial year, ending 31 July 2021, the University continued to respond to the ongoing COVID-19 pandemic. Further lockdowns and government restrictions during this time had a big impact on campus operations, and several sources of income, such as student accommodation and conference and hospitality facilities on campus, were lost or reduced.

The Post-COVID-19 Response Programme was set up last year to urgently address the immediate financial issues raised by the pandemic, in consultation with representatives of the University and College Union and the Staff Forum. A series of measures were agreed to immediately reduce the University’s largest expenditure, staff costs. The majority of these measures, including a three-year vacancy freeze, have now been implemented. Fortunately, a mutually agreed proposal for tiered pay cuts to prevent compulsory redundancies has not been needed.

The University’s solid financial position has enabled the organisation to adapt to the challenges of the pandemic accordingly, with the University community playing an important and active role in decision-making.

Professor Robert Van de Noort, Vice-Chancellor of the University of Reading, said:

“I am extremely proud of the achievements of our students and colleagues over this academic year, despite some understandably challenging circumstances. Our vision for the University is now firmly established as we approach our centenary in 2026. Our strategy is based around four key principles: community, excellence, sustainability – both financial and environmental – and being a university that is engaged with the world around us.

“This year, we have made great strides towards our goals, including further developments at our new film and TV hub at the Thames Valley Science Park, and our ambitious plan to reduce our net carbon emissions to zero by 2030. Importantly, we have not neglected our commitment to our financial sustainability, as this annual statement shows.”

The headlines from the 2020/21 Financial Statement include:

·       Total income on operating activities: £311m. This is a 1% decrease from 2019/20, principally due to the ongoing financial impact of COVID-19.

·       Total expenditure on operating activities: £320.9m (excluding a pension provision movement) – down by £6.3m in 2019/20, largely due to a reduction in expenditure in some areas during lockdowns.

·       Total surplus, taking account of all aspects of the University’s activities: £26.3m. Down from £42.6m in 2019/20, when the sale of land and a pension provision accounted for the surplus. The overall surplus for 2020/21 is a result of a pension provision movement and an increase in the value of our assets of £32m. Without this, the University would have made a small underlying deficit, but due to losses from COVID-19, the underlying deficit was £10.4m.

·       Tuition fee income: increased by £2.1m to £189.3m.

·       Total research income received: fell by1% to £37.6m – the result of a decrease in the rate and value of new grant awards and some COVID-19 related impact.

·       Funding body grants: increased to £36.2m, up from £31.5m in 2019/20.

·       Consolidated net assets: totalled £475.2m on 31 July 2021, compared to £438.3m in 2020, with the increase against the previous year attributed primarily due to increases in the value of our investment class assets.

·       Investments: investments held by the University and its trusts are valued at £127.4m, up from £122.8 million last year.

Paul Preston, President of the University Council, said:

“The pandemic has clearly had a significant impact on the University, not just from an operational standpoint of teaching and research, but also financially. Beyond the additional costs of responding to the pandemic, such as reconfiguring buildings to allow social distancing, we have also experienced a loss of income from a reduction in numbers of international students and in accommodation and other campus operations.

“That said, the University has faced these challenges from a strong financial position, and we have been able to weather the storm. This has been thanks in no small part to the openness and maturity of discussions between colleagues, unions and University leaders about our position. While it has not been necessary to invoke all of the agreed measures to reduce costs, I am grateful to the sacrifices that staff have made for the benefit of others, and to allow the collective mission of our University to continue. This serves to highlight the importance of prudent financial management to ensure that we can respond to whatever situation may arise, while still maintaining our core purpose of high quality teaching and research.”

Accounting change

This year, a prior year adjustment arising from a change in the accounting for five trusts has resulted in a number of changes within the financial statements. The change has been the inclusion of these trusts in the accounts for the University itself, whereas they had previously been accounted for as part of the wider ‘University Group’. These trusts include the Research Endowment Trust, the National Institute for Research in Dairying Trust, the Hugh Sinclair Trust, the Greenlands Trust and the Beckett International Foundation.

This accounting treatment reflects their status as special trusts as defined by the Charities Act 2011. This effectively means that now each of the trusts are accounted for in the financial statements of the University. This change to the way the results are reported has not generated any changes to the overall Group results in 2020/21 or 2019/20, and each trust is still operating under the same regulatory and governance arrangements as before.

The annual financial statement document has been published on the University website and is available to read in full here: University of Reading financial statements 2020/21.

The University strategy is publicly available here: University of Reading 2020-2026 Strategic Plan.