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Budget Briefing 2011/12

Budget Briefing 2011/12

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Budget Briefing 2011/12

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  1. Budget Briefing 2011/12 Catherine Whalley - PRAS Stephen Purbrick - Finance

  2. What this presentation will cover • Budgeting process – timeline • JRAM allocations for 2011/12 – informed by: • HEFCE grant for 2011/12 • Fee income for 2011/12 • Services’ budgets for 2011/12 • Infrastructure Charge allocations for 2011/12 • Setting the 2011/12 budget • Future challenges and the University’s response

  3. Budgeting Process • October 2010 • Academic divisions tasked with identifying non pay savings of 5% • Services tasked with delivering year 2 of agreed 3-year savings targets • January 2011 • Divisions and services plans reviewed • February • Service costs for 2011/12 agreed by PRAC and divisional 123 charge allocations for 2011/12 calculated • March • HEFCE grant letter received and JRAM allocations for 2011/12 calculated • April • Budget targets agreed by PRAC • June • Budget review meetings • July • Final 2011/12 budget agreed

  4. HEFCE grant allocations for 2011/12 (1) * Not including HEIF

  5. HEFCE grant allocations for 2011/12 (2) Teaching funding • Continued reductions in T funding. Research funding • QR: concentration through movement of weightings (for 4* – 3* – 2* – 1* – unclass) from 9 – 3 – 1 – 0 – 0 to 9 – 3 – 0.294 – 0 – 0 • Charity support stream: Drop in rate per £ but our volume has increased faster than the sector’s volume. • Business support stream: EU & Overseas volume now included in HEFCE calculations. • PGR funding: the rate of funding per PGR FTE has fallen again.

  6. Fee income for 2011/12 (1) • Fee income for 2011/12 is currently forecast to be £11.6m (8.9%) more than that budgeted for 2010/11. • Some of this has already fed through in the JRAM 2010/11 in-year update (£3.3m above budget), the rest arrives in the 2011/12 initial JRAM allocations. • Current forecasts for 2011/12 are based on current student numbers and next year’s fee levels. • Informed by new SNP forecast intake figures from divisions, PRAS will model fee income for 2011/12 based on next year’s projected student numbers.

  7. Fee income for 2011/12 (2) • Student FTEs grew approximately 2% from 2009/10 to 2010/11. • Very broadly, 35% of students generate 70% of fee income, and it is these students who are growing in number. • Many fee rates are increasing 4% from 2010/11 to 2011/12 and new bespoke fee rates are kicking in too, noticeably for Humanities PGT students. • Fee rates for HEU PG students are rising more than they normally would, to compensate for the loss of Roberts funding.

  8. JRAM allocations for 2011/12 (1):

  9. JRAM allocations for 2011/12 (2): comparing 2010/11 in-year update allocations with 2011/12 initial allocations

  10. UAS [1] ASUC [1] OUED Other Total £m £m £m £m £m 2010/11 budget 57.9 24.9 25.6 0.4 108.8 Inflation adjustment 0.4 0.2 0.4 0.0 1.0 Savings (2.8) (0.6) (0.3) (0.2) (3.9) Unavoidable costs 1.7 0.3 0.9 2.9 2011/12 budget target 57.2 24.8 26.6 0.2 108.8 Difference 11/12 - 10/11 (0.7) (0.1) 1.0 (0.2) 0.0 Savings as a % of budget -5% -2% -1% -4% [1] reflects divisional budget structure for 2011/12 Services budget 2011/12 (1)

  11. Services budget 2011/12 (2) • Savings – split roughly evenly across: • savings in staff costs across UAS and ASUC £1.1m • savings in non-staff costs across UAS and ASUC £1.1m • higher external income generation £1.1m • Other (including charges to colleges) £0.6m • Unavoidable costs – heavily challenged by BSC: • license and staffing costs for agreed IT developments £0.9m • Investment for REF and impact of lost income streams £0.8m • increase in Library materials budget £0.3m • additional resource to cover transfer of R&M responsibilities from academic depts to OUED £1.0m

  12. 123 Infrastructure charge for 2011/12 (1)

  13. 123 Infrastructure Charge for 2011/12 (2) • The total 123 charge for 2010/11 was £112.7m. • Without the addition of the Oxford Super-computer, the 123 Infrastructure charge would be lower in 2011/12 than in 2010/11.

  14. Setting the budget 2011/12 – high level

  15. Setting the budget 2011/12 – divisions Note – figures include £2m transfer from Medical Sciences to Humanities, and £0.8m transfer to the Colleges, under the 2010 ‘SPRIG’ proposals.

  16. Looking aheadMajor changes to funding streams • Reduction in HEFCE teaching funding and introduction of higher student fees from 2012/13 • Significant cuts in HEFCE capital funding • Reduction in Research Council funding

  17. Overall impact of £9k fees(after reduction in HEFCE teaching grant)

  18. HEFCE Capital Investment Fund73% reduction

  19. Research Council Savings 2011/12 – 2014/15 • £428m from HEIs & RC Institutes & Facilities • Oxford to reduce its FEC indirect charge by 2% (5 bands for savings up to 5%) • Inflation reduced to zero • Savings applied to existing and future awards • Future equipment funding needs matched-funding from HEIs (50% +?) • Impact on Oxford unknown

  20. 5 year forecasts – key assumptions • HEFCE teaching grant falls significantly, by up to 33% pa. • HEFCE research grant remains static, on the back of high quality research • £9k fees for HEU undergraduates and above inflation increases for overseas and post-graduates • Falling research overheads, largely as a result of the RCUK savings • No growth in University funded staff & modest pay awards. • University funded capital expenditure capped at £50m pa on average

  21. 5 year forecast - results

  22. Strategies for dealing with the funding environment (1) • Pay costs • Continue with the recruitment protocol • Continue with pensions reforms (USS & OSPS) • Contain pay inflation • Deliver full 10% Service savings • Non-pay costs • New VFM approach • IT & Science purchasing groups • Continue to develop Small Research Facilities • Shared services

  23. Strategies for dealing with the funding environment (2) • Capital • Focus remaining HEFCE CIF on existing space, sustainability and carbon management • Focus capital as much as possible on endowment to generate income to cover existing costs (£60m teaching fund and £192.5m OUP endowment) • Diversify sources of research income ……

  24. Sources of research income

  25. Any questions?