In the year before the introduction of the new funding arrangements for higher education in England, the sector overall was in a sound financial position, and will remain so in 2012-13. However, 2011-12 saw the first real-terms reduction in total income on record, and forecasts for 2012-13 suggest that the sector will see a sharp fall in surpluses.
These findings are part of a review of universities and college finances published on 15 March 2013 by HEFCE.
The sector recorded good cash balances and healthy reserve levels, and an operating surplus of 4.2 per cent in 2011-12 compared to a surplus of 4.6 per cent in 2010-11. This was an improvement on earlier projections, and indicates that the sector has maintained its track record of making year-on-year efficiency savings. The most significant savings related to staff costs, which fell in real terms for a second consecutive year.
These solid foundations are essential for future sustainability, because projected results for 2012-13 indicate that the sector will see a deterioration in financial performance.
Read HEFCE press release 15 March 2013
