On 19 November, the University Council approved the University’s financial statements for the year ended 31 July 2008. The statements are available on the University website at
www.soton.ac.uk/finance/central/accounts.html. The statements will be published as usual in hard copy with our annual report early in 2009.
The financial performance of the University has improved since 2006/07 and we should take some satisfaction in that and the efforts of all who have made this possible. However, the formal accounts do not reveal the full story of our financial situation. This note attempts to provide some context.
After the receipt of a further £25 million in respect of the insurance claim for the Mountbatten fire, the University shows a surplus of £29 million in the year. The University has used all of the expected insurance funds on expenditure for the restoration of assets destroyed in the fire which considerably exceed the insurance money received to date. The rapid acquisition of equipment and the costs of the new clean room complex are reflected in the total capital spend during the year of £69 million. According to our accounting rules the costs of these assets will be charged to the financial statements as they come into use in future years and are not charged to the accounts in 2007/08. If the distorting effects of the insurance claim are removed from the accounts, our surplus is between one per cent and two per cent of turnover.
The financial statements show some very positive trends, which we must hope will continue into the future. Research income showed its first substantial real terms growth since 2001/02, with an increase of over £10 million or 14 per cent, and our strong home and international student recruitment is reflected in higher academic tuition fees. However staff salary costs continued to grow – up by £15 million or nearly eight per cent on last year.
The financial statements include the Operating and Financial Review by the University Treasurer, and this describes in detail the key financial aspects of the year under review and sets out the key risks for the coming years.
Vice-Chancellor Professor Bill Wakeham
Malcolm Ace, Director of Finance