The financial information on this page relates to the financial year that ended on 31 July 2020. We refer to this as “2019/20” in the text. Where we refer to “2020/21”, we mean the financial year ending 31 July 2021.
Impact of COVID-19
The COVID-19 pandemic has required an unprecedented amount of change in the way we operate. Our immediate response focused on delivering our education and assessments online and enabling remote working at scale.
As we moved towards the summer months of 2019/20, we focused significant efforts and resources on preparing for the new academic year, including developing our online teaching capabilities further and making our campus ready to operate in a “COVID safe” manner. Alongside this, we concentrated on ensuring as much research activity as possible could continue or re-start.
In 2019/20 the pandemic caused some reductions in income. Most significantly, we saw a reduction in research income due to the disruption caused by the first lockdown and reductions in many of our other income sources, such as conferences, events and catering. We also gave £13 million in rent refunds to students who returned home from their University accommodation following government guidance/requirements during the first lockdown.
Whilst we saw some reduction in operating expenditure, many of our costs associated with these activities are fixed (eg salaries and building rental) and so the overall cost saving was less than the corresponding fall in income. We also incurred approximately £10 million of costs associated with the lockdown, including setting up remote learning and working, closing down the campus and pausing building work on campus.
The University still recorded an underlying surplus of £22 million in 2019/20 which will fund important investment in our facilities and capabilities. However, this surplus was lower than in the previous year because of the impact of COVID-19.
In 2020/21 the pandemic will have a more significant impact on the income generated by student fees, research and other supplementary income levels. In addition, since the end of 2019/20, we have also invested further to make the campus ready to operate in compliance with government COVID-19 rules, as well as to ensure we can continue to provide high-quality teaching through remote and face-to-face channels.
The following sections provide further explanation of our sources of income in 2019/20 and the expenditure and activity which they fund.
Breakdown of income
Note: Percentages have been rounded to the nearest percentage point for clarity.
The University has a number of income sources to support its work, including student fees and education contracts, government grants, other income through commercial activities including residences, catering and conferences, as well as donations. We also attract research grants from charities, research councils, companies and other organisations that help us fund our world-class research activity.
We use this income for a wide range of activity including teaching and learning, cutting-edge research, knowledge exchange and community engagement. Research-based teaching and learning excellence, a high-quality student experience and successful student outcomes are at the centre of everything we do at the University.
In 2019/20 we received income of £432 million from student fees and education contracts, alongside £140 million from research grants and contracts. This was supported by government grants of £83 million, with £26 million of this relating to teaching activity and £57 million to research. The remainder of our income was made up of £45 million for residences, catering and conferences and £94 million from other income streams, such as income from hospitals and health authorities for direct support from the University, our National Institute of Health Research (NIHR), capital grants from funding bodies and donations. As noted, the COVID-19 pandemic significantly impacted some of these income sources.
Our University is a charitable, non-profit making body which reinvests its surplus. We carefully manage our finances so this surplus contributes towards major projects underpinning the University strategy. We have recently launched our new 2020-2030 strategy which sets out our ambitions to build a thriving community and a collaborative culture to make an impact locally and globally in the areas of research and innovation, student education, digital transformation and international.
Delivering this strategy will require significant investment in our digital and technological capabilities, as well as in the further development of our campus, buildings and facilities. It will also require investment to enable further innovation in the way we teach, carry out research and collaborate with other universities and organisations.
As described previously, COVID-19 has presented additional financial challenges which increase the importance of carefully managing the University’s financial position.
Breakdown of expenditure
Note: Percentages have been rounded to the nearest percentage point for clarity.
Expenditure plus surplus for re-investment in 2019/20 totalled £794 million. Of this, £636 million supported teaching and the student experience here at Leeds and this is broken down further in the next section. The remaining £158 million spend comprises £98 million of direct research expenditure and £60 million on residences, catering and conferences. Whilst neither of these areas of expenditure are funded by student tuition fees, our research partnerships with external parties help enhance the student experience, for example by leading to industrial placements and further research projects.
How do student fees contribute to the costs of running our University?
Note: Percentages have been rounded to the nearest percentage point for clarity.
Student fees refer to the collective amount of student tuition fees from international and home students and our education contracts. Our home fees are supported by the tuition fee loan system where repayments are made when the student earns more than a threshold set by the Government.
Student fees and education contracts totalling £432 million represent a significant portion of our University income, which contribute to the £636 million costs necessary to support teaching and research-based teaching.
Our students' fees pay for lecturers and other academic staff, buildings maintenance, as well as maintaining equipment and laboratories. At £272 million, this makes up a significant proportion of our expenditure, as we want to ensure our students get the best possible education. We provide this by investing in teaching facilities and attracting teaching staff who are actively engaged in pioneering research.
Student fees also contribute to our student support and academic services, which are important to the student experience. In 2019/20 we spent £31 million on student support, which includes services such as counselling, disability support, financial advice and mental health support. We also spent £99 million on our IT, library and academic services whose facilities aid learning outside of the lecture theatre and are accessible to all of our students. This figure also includes £19 million of expenditure on our National Institute of Health Research (NIHR). Furthermore, we are proud to invest £49 million in scholarships and bursaries to ensure all our students have the opportunity to realise their potential, regardless of background.
We also need to spend money behind the scenes on essential things that keep our University running, like utilities, insurance, maintaining the estate and the wide range of staff who provide essential services, for example cleaning, human resources and finance. In 2019/20 we spent £163 million on these activities – £90 million on our estate, £59 million on general running costs and £14 million on other expenditure.
As noted, in 2019/20 whilst the lockdown resulted in some reductions in the areas of expenditure set out previously, we also incurred additional costs to enable remote teaching and working. In the 2020/21 financial year, we are incurring further costs to support digitally enabled methods of teaching and making our campus safe to function in line with government COVID-19 requirements. This includes additional cleaning, equipment, signage and hygiene costs. We are also significantly increasing our investment in eBooks.
Investment in our campus
Our programme of investment to transform the University campus was well advanced before the pandemic began. Work on existing capital developments has continued where contracted or essential, albeit at a slower rate since March 2020.
The following developments were either completed in 2019/20 or are due for completion in 2020/21:
- £96 million development of the Sir William Henry Bragg building.
- £29 million refurbishment of the Faculty of Biological Sciences, the first phase of an overarching programme of development of the faculty estate, which includes the reconfiguration of research and teaching laboratories.
- £12 million development of the Centre of Innovation Excellence in Livestock (CIEL) at the University farm to provide livestock research facilities.
- £8 million acquisition of Cloth Hall Court, a conference and meeting venue in Leeds city centre which provides a new base for the University to build on its strong reputation for innovation and enterprise, and develop its provision of professional education.
We intend to begin further capital development schemes, including investment in reaching a net zero carbon footprint by 2030, however the timing of this work is still to be confirmed. This is because we need to be confident that we are through the worst of the financial impact of COVID-19 and are generating a surplus which helps us afford the necessary investment.
For more information about our investments, visit our campus developments page.
For more detailed financial information, you can download our annual accounts from our corporate publications webpage.