financial outlook 2013/14 tom wale - pras helen knight - finance
TRANSCRIPT
Financial Outlook 2013/14
Tom Wale - PRAS
Helen Knight - Finance
What this presentation will cover
Budgeting process and timeline
JRAM allocations for 2013/14 – informed by: HEFCE grant for 2013/14 Fee income for 2013/14
Services’ budgets for 2013/14 Infrastructure Charge allocations for 2013/14
Historic trends
The budget in a wider context
Page 2 S
Page 3 S
Planning and budgeting timeline Autumn 2012
PRAC agreed new integrated planning and budgeting process PRAC approved budget targets for services for 2013/14 PRAC approved initial budget targets for divisions for 2013/14 – transitional year
February Service costs for 2013/14 agreed by PRAC and divisional 123 charge allocations
for 2013/14calculated March
HEFCE grant letter received and JRAM allocations for 2013/14 calculated April
PRAC agreed final budget targets May/June
Budgets and plans submitted Budget review meetings Planning review meetings
June Final 2013/14 budget agreed
Integrated planning and budgeting process – new this year
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Divisions can start to address key planning issues
Budget preparation begins
PRAC approves budget targets
Budgets & plans submitted and reviewed
Budget approved by Council
PRAC receives three-year
financial forecast
Resolution of tension between
divisional investment &
central surpluses
Divisional spending plans
approved
H
T
M
What this has meant for you
Divisional 5 year plans submitted in May along with the budget, rather than in January.
Greater involvement of departments. Financial projections worksheet in budget template.
Plans submitted in May will be used to produce divisional budget targets the following Autumn Based on final 2013/14 budget Known before Christmas Updated in March / April for final JRAM, infrastructure and capital
charges
This year – combined Q2 / budget template
Page 5
JRAM Overview
The Joint Resource Allocation Method is the way of distributing funds across the collegiate University
Sums allocated across academic divisions, OUDCE & Colleges
Page 6
/£m
HEFCE Teaching (including Research students) 45.8
Fees 192.8
HEFCE Research Support 118.0
Other elements 0.4
Total allocation in JRAM 357.0
HEFCE Grant Allocations 2013/14
All sums in £m
2012/13 (March 13)
2013/14(March 13)
Variance Sums Proportion
Total 181.9 173.6 -8.3 -4.6%
Teaching 44.2 33.6 -10.6 -24.0%
Research for PGRs 13.7 13.9 0.2 1.3%
Mainstream Research (not PGR) 115.9 118.0 2.2 1.9%
Other (Libraries, Museums, HEIF) 8.1 8.1 0.0 0.0%
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Teaching changes in line with move to new fee regime – offset by fees 2012/13 includes additional £778k as at March 2013 (not in JRAM 1213iya)
PGR volume up – bigger share of national pot Mainstream research – Charities & Business QR increased volumes
rates down but bigger share of national pot
HEFCE Grant Allocations 2013/14Teaching
All sums in £m
JRAM1213 iya
JRAM1314 i
Variance Sums Proportion
Total Teaching Funding 43.5 33.6 -9.9 -23%
New Regime UG 2.6 5.3 2.7 104%
Old Regime UG 35.2 23.4 -11.8 -34%
New Regime PGT 1.1 1.4 0.3 27%
Old Regime PGT 0.5 0.1 -0.4 -80%
Specific Funding Streams 2.2 1.7 -0.5 -23%
Allocated outside JRAM 1.9 1.7 -0.2 -11%
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Additional HEFCE funding of £778k for 2012/13 not included in 1213 iya Announced after JRAM 1213 iya Divisional portion will be allocated as part of 2013/14 budgets (most +ve)
HEFCE Grant Allocations 2013/14Research
PGR Funding updated for numbers (2011-12 HESA data) Increase due to rise in numbers, subject weightings unchanged
Mainstream QR Funding unchanged Charities & Business QR – rates down but volume up
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All sums in £m
JRAM1213 iya
JRAM1314 i
Variance Sums Proportion
Research Students 13.7 13.9 0.2 1.3%
Mainstream QR 77.3 77.3 0.0 0.0%
Charities QR 31.5 32.8 1.3 4.2%
Business QR 7.2 8.0 0.8 11.6%
Total 129.6 132.0 2.2 1.7%
University & College Fees 2013/14
All sums in £m
JRAM1213 iya
JRAM1314 i
Variance Sums Proportion
Total 170.7 192.8 22.1 13%
Undergraduate UK/EU 49.9 65.1 15.2 31%
Undergraduate Overseas 21.8 23.3 1.5 7%
Postgraduate UK/EU 35.5 37.9 2.3 7%
Postgraduate Overseas 63.6 66.6 3.0 5%
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Forecast is based on this year’s students undertaking next year’s activity
e.g. year 2 students become new fee regime for 2013/14 Informed by work on Student Number Planning
Much of the increase is due to the transition to new fee regime on UG But also changes to student numbers
Resource Levels
Based on FTEs Must consider fees and other sources of funding (mainly HEFCE) HEFCE funding split into five price groups according to activity
Price group D is classroom-based – no additional funding Price group A is clinical medicine – highest levels of additional funding
UK/EU UG decreases in HEFCE funding more than offset by increases in fees
UK/EU PGT decreases not automatically balanced by HEFCE funding
Fees + other sources of student funding distributed via JRAM Split of resources between departments & Colleges Some targeted streams distributed outside JRAM
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Resource LevelsUK/EU Undergraduate
All sums in £Old Regime
1213 iya 1314 iNew Regime
1213 iya 1314 i
HEFCE funding Band D 2,988 3,012 379 383
University Fee 3,465 3,465 8,500 8,688
Total Band D 6,453 6,477 8,879 9,071
Add’l HEFCE Funding Band B 2,746 2,790 1,473 1,488
Total Band B 9,199 9,267 10,352 10,559
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New regime fee increase is a result of fee waivers being higher in year 1 2013/14 has year 1 and 2 students on new fee regime
Note differential between Band D and Band B is much reduced in new fee regime – but overall resource is increased for both
Amounts are before allocation between departments and Colleges
Change in JRAM Allocations for 2013/14Comparison of 1314 i with 1213 iya
All sums in £m MSD SSD MPLS Hum OUDCE Colleges Other Total
HEFCE T incl PGR -0.8 -0.6 -2.2 -1.5 -0.1 -4.0 0.0 -9.2
UG Fees 1.4 1.3 3.7 2.6 0.0 7.7 0.0 16.8
PG Fees -0.6 3.4 1.0 0.6 0.3 0.6 0.0 5.3
Other T 0.0 -0.1 -0.0 -0.2 -0.4 -0.0 0.0 -0.7
Total T & related 0.0 3.9 2.6 1.5 -0.2 4.3 0.0 12.2
QR Mainstream 0.0 -0.1 0.0 0.0 0.0 0.0 0.0 -0.1
QR Charity 1.4 -0.0 -0.1 0.1 0.0 0.0 1.3 2.6
QR Business 0.7 -0.1 0.2 0.0 0.0 0.0 0.8 1.7
Other R 0.0 0.0 0.0 0.0 0.0 -0.1 0.0 -0.1
Total R & Related 2.0 -0.2 0.1 0.1 0.0 -0.1 2.2 4.1
Total Funding 2.1 3.7 2.7 1.6 -0.2 4.2 2.2 16.3
2.4% 6.1% 3.6% 4.3% -5.1% 5.6% 8.0% 4.2%
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Change in JRAM Allocations for 2013/14Comparison of 1314 i with 1213 i & 1213 iya
1213 i 1213 iya 1314 i 1213 i 1213 iya 1314 i 1213 i 1213 iya 1314 i 1213 i 1213 iya 1314 i 1213 i 1213 iya 1314 iMSD MSD MSD SSD SSD SSD MPLS MPLS MPLS Hum Hum Hum OUDCE OUDCE OUDCE
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
80.0
90.0
100.0
Charities & Business QR
Mainstream QR
Fees
HEFCE T & related
£m
Page 14 T
Services budget 2013/14
Page 15 H
ASUC £'m
UAS £'m
Estates £'m
Total £'m
2012/13 budget 25.0 57.3 30.9 113.1Inflation 0.5 1.3 0.5 2.2Growth in size of University estate 1.2 1.2Expansion of Development Office 0.9 0.9Other changes 0.4 0.4 0.4 1.22013/14 budget target 25.8 59.9 33.0 118.7
Change 0.9 2.6 2.1 5.6% change 3.4% 4.6% 6.9% 4.9%
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123 Infrastructure charge for 2013/14
£m
Services budget target 118.7
Other costs charged via the 123 model but not in the services: e.g. insurance 2.8
TOTAL 123 charge for 2013/14 121.5
Total 123 charge for 2013/14 is £5.7m higher than the total for 2012/13 Although this has increased, the charge rate as a percentage of
divisional income has not
2011/12 2012/13 2013/14
Total charge as % of divisional income 21.2% 20.9% 20.2%
123 Infrastructure charge for 2013/14
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£m MSD SSD MPLS Hum OUDCE colleges Other TOTAL
2013/14 -32.3 -16.7 -27.3 -15.5 -1.6 -2.4 -25.6 -121.4
2012/13 -29.7 -16.2 -26.2 -14.8 -1.6 -2.3 -25.0 -115.8
difference -2.6 -0.5 -1.1 -0.7 0.0 -0.1 -0.6 -5.6
MSD SSD MPLS Hum OUDCE colleges Other
-35
-30
-25
-20
-15
-10
-5
0
2012/13
2013/14
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Capital charge for 2013/14
Band weightings and costs are unchanged Increase is due to increase in space
£m MSD SSD MPLS Hum OUDCE TOTAL
2013/14 -3.7 -0.9 -4.8 -0.6 -0.2 -10.2
2012/13 -3.2 -0.9 -4.4 -0.6 -0.2 -9.3
difference -0.5 0.0 -0.4 0.0 0.0 -0.9
Band 1 Band 2 Band 3 Band 4 Band 5 Band 6
Weightings 2.5 2 1.5 1 0.5 0.5
£ per sqm £95 £76 £57 £38 £19 £19
Budget v Actuals – historic trends
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(20.0)
(10.0)
0.0
10.0
20.0
30.0
40.0
50.0
60.0
£'m
Budget
Actual
Looking back at 2011/12
Budget - £22.5m Actuals - £52.3m. Difference £29.8m
£13.1m of this arose in the divisions and services – mainly Medical Sciences and Social Sciences.
£16.7m arose in Central Costs & Adjustments
Current indications are that the 2012/13 budget is much more realistic – Q2 forecast is in line with budget
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Why has our position improved?
Higher fee income
More money from OUP
Increased investment income
Flat staffing levels – impact of the recruitment protocol
Low pay awards
Page 21
Russell Group Surpluses / Deficits 2011/12
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-20,000
-10,000
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
£'000
Russell Group surpluses 2011/12
Surplus/ Deficit as % of Income
Page 23
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%
20.0%
30.0%Oxford 5.1%
Setting the budget 2013/14
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Note – figures include £2m transfer from Medical Sciences to Humanities
Division
Budget target
£'mMedical Sciences 9.0 Social Sciences 5.1 MPLS 3.7 Humanities (1.4)Continuing Education 0.6 Services 1.6 Central Costs & Adjustments 12.5 Target 2013/14 31.1
Why do we need to make a surplus?
To fund capital investment New buildings Maintenance of existing buildings IT Equipment funding
To fund restructuring activities Staff development
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Threats to future surpluses
OUP funding may reduce
Increased pay awards
Cost of maintaining existing estate
Expansion of estate size – ROQ, Medical Sciences
Reduce funding from Research Councils
Move towards EU and other research funders
Desire of surplus departments to invest for the future
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EBITDA ProjectionsDue to increase in staff costs, sustainability gap widens in later years
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0
20
40
60
80
100
12020
06/0
7
2007
/08
2008
/09
2009
/10
2010
/11
2011
/12
2012
/13
2013
/14
2014
/15
2015
/16
2016
/17
2017
/18
2018
/19
2019
/20
2020
/21
2021
/22
Surp
lus £
'm
EBITDA surplus
Target EBITDA surplus
£88m = 7.3%
£45m = 3.7%
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reconcile
Developing the capital plan
12345
67
8...
trac
growth
surplus
grantsdisposal
philanthropy
debt
con
ditio
n
de
pre
ciatio
n
growth
pro
jects
PRAS OUESFinance
£ £
Estimate demand Estimate supply
Capital planning due to complete in Michaelmas
Strategic financing plans now being developed
Any questions?
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Further informationTom Wale Head of Resource Allocation
http://www.admin.ox.ac.uk/pras/resource/
[email protected] (01865 2) 70067
Helen Knight Financial Planner
http://www.admin.ox.ac.uk/finance/processes/planning_reporting/
[email protected] (01865 6) 16151