The University generated a surplus of ￡6.2 million (2008/09 ￡1.2 million). The small increase in the surplus was mainly because 2008/09 contained a number of one-off gains and losses, notably the ￡14.7 million impairment of Icelandic bank deposits that was partly offset by one-off investment gains and endowment reclassifications.

Total income increased by 2.0% to ￡880 million (2008/09: ￡863 million)

Research grants and contracts continue to be the largest source of income to the University, most of which was matched by related expenditure and increased by 7.8% to ￡367 million.

Grants from the Higher Education Funding Council for England (HEFCE) represent the second largest source of University income and amounted to ￡203 million, up by 3.9%.

Academic fees and support grants amounted to ￡137 million, up by 11.9% as a result of increased student numbers and revisions to fees charged for some courses.

Endowment and investment income decreased by 32.6% to ￡25 million. The 2008/09 figure of ￡37 million included a one-off investment gain arising from the sale of University-owned investments as part of the ongoing change in investment allocation strategy. Compared with 2008/09, the level of interest income is also reduced primarily as a result of lower average rates of interest.

University Income 2009/10

University Expenditure 2009/10

Total expenditure increased by 2.0% to ￡885 million (2008/09: ￡867 million). The 2008/09 figure includes ￡15 million relating to the impairment of Icelandic bank deposits (2009/10: ￡0 million).

Staff costs increased by 7.2% to ￡469 million (2008/09: ￡438 million) and were equivalent to 53.0% of total expenditure (2008/09: 50.5%). This increase resulted from an annual negotiated pay settlement of 0.5% in October 2009, annual promotional salary increments, early retirement charges, an increase in the pension charge and an increase in staff numbers. The increase in staff numbers and costs is driven partly by the increase in research activity and is therefore matched by higher research income.

Other operating expenses amounted to ￡360 million, a decrease of 2.1%. Major factors explaining the decrease include a reduction in energy prices and lower revenue expenditure on capital projects.

Depreciation has increased from ￡44 million in 2008/09 to ￡52 million in 2009/10, due to the addition of new buildings, the largest of which is the newly refurbished Ashmolean Museum, opened in November 2009, and new equipment.

In autumn 2008, a number of Icelandic banks went into administration, including three with which the University held deposits. The University currently has ￡26 million of fixed-term deposits with these banks and debtors include a further ￡3 million of accrued interest in relation to these deposits. The University is working together with other affected bodies to recover these amounts. The financial statements for the year ended 31 July 2009 included an impairment of ￡15 million relating to the Icelandic bank deposits. The amount ultimately to be recovered remains uncertain and to a large extent will be determined by the outcome of legal action now being taken in Iceland.

The net cash outflow, before use of liquid resources and financing for the year, was ￡17 million and compares with an outflow of ￡52 million in the previous year. The net cash outflow is largely the result of a switch from current asset investments to fixed asset investments as the University places more of its investments into the new Oxford Capital Fund. 

The balance sheet shows an increase in net assets of 11.6%, from ￡1,614 million to ￡1,801 million. Fixed asset cost (including heritage assets and fixed asset investments) increased by ￡146 million, reflecting the continued building programme to support the University’s expanding research base and an increase in longer-term fixed asset investments in the Oxford Capital Fund. Significant capital expenditure was incurred on a number of projects in 2009/10, including the completion of the new ￡27 million book storage facility at Swindon and demolition and site clearance was completed at the Radcliffe Observatory Quarter, where site infrastructure works have now commenced. In December 2009, Her Majesty The Queen officially opened the new Ashmolean Museum following a major multi-million pound refurbishment.

Endowment funds increased in total value from ￡585 million to ￡629 million as a result of stronger equity markets. New funds invested during the year amounted to ￡18 million.