finance briefing presentation april 2013

8/13/2019 Finance Briefing Presentation April 2013

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Financial Outlook 2013/14

Tom Wale - PRAS

Helen Knight - Finance


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What this presentation will cover

Budgeting process and timeline

JRAM allocations for 2013/14informed 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


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Integrated planning and budgeting processnew this year

Page 4

Divisions can

start to address

key planning

issues

Budget

preparation

begins

PRAC approves

budget targets

Budgets & plans

submitted and

reviewedBudget approved

by Council

PRAC receives

three-year

financial forecast

Resolution of

tension between

divisional

investment &

central surpluses

Divisionalspending plans

approved

H

T

M


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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 budgettargets the following Autumn Based on final 2013/14 budget

Known before Christmas

Updated in March / April for final JRAM, infrastructure and capital

charges

This yearcombined Q2 / budget template

Page 5


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JRAM Overview

The Joint Resource Allocation Method is the way of distributingfunds 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


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HEFCE Grant Allocations 2013/14

All sums in m

2012/13(March 13)

2013/14(March 13)

VarianceSums 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%

Page 7 T

Teaching changes in line with move to new fee regimeoffset by fees

2012/13 includes additional 778k as at March 2013 (not in JRAM 1213iya)

PGR volume upbigger share of national pot

Mainstream researchCharities & Business QR increased volumes

rates down but bigger share of national pot


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HEFCE Grant Allocations 2013/14Teaching

All sums in m

JRAM1213 iya

JRAM1314 i


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%

Page 8 T

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)


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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 QRrates down but volume up

Page 9 T

All sums in mJRAM1213 iya

JRAM1314 i


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%


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University & College Fees 2013/14

All sums in m

JRAM1213 iya

JRAM1314 i


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 years students undertaking next years

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


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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-basedno additional funding

Price group A is clinical medicinehighest 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

Page 11 T


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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

AddlHEFCE 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 newfee regimebut overall resource is increased for both

Amounts are before allocation between departments and Colleges


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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%

Page 13 T


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Change in JRAM Allocations for 2013/14Comparison of 1314 i with 1213 i & 1213 iya

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

100.0

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 i

MSD MSD MSD SSD SSD SSD MPLS MPLS MPLS Hum Hum Hum OUDCE OUDCE OUDCE

m Charities & Business QR

Mainstream QR

Fees

HEFCE T & related

Page 14 T


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Services budget 2013/14

Page 15 H

ASUC'm

UAS'm

Estates'm

Total'm

2012/13 budget 25.0 57.3 30.9 113.1

Inflation 0.5 1.3 0.5 2.2

Growth in size of University estate 1.2 1.2

Expansion of Development Office 0.9 0.9Other changes 0.4 0.4 0.4 1.2

2013/14 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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Page 16 T

123 Infrastructure charge for 2013/14

mServices 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%


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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

-35

-30

-25

-20

-15

-10

-5

0

MSD SSD MPLS Hum OUDCE colleges Other

2012/13

2013/14


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Page 18 T

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 6Weightings 2.5 2 1.5 1 0.5 0.5 per sqm 95 76 57 38 19 19


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Budget v Actualshistoric trends

Page 19

(20.0)

(10.0)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

'm

Budget

Actual


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Looking back at 2011/12

Budget - 22.5m Actuals - 52.3m. Difference 29.8m

13.1m of this arose in the divisions and servicesmainly

Medical Sciences and Social Sciences. 16.7m arose in Central Costs & Adjustments

Current indications are that the 2012/13 budget is much morerealisticQ2 forecast is in line with budget

Page 20


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Why has our position improved?

Higher fee income

More money from OUP

Increased investment income

Flat staffing levelsimpact of the recruitment protocol

Low pay awards

Page 21


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Russell Group Surpluses / Deficits 2011/12

Page 22

-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


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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%


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Setting the budget 2013/14

Page 24

Notefigures include 2m transfer from Medical Sciences to Humanities

Division

Budgettarget

'm

Medical Sciences 9.0

Social Sciences 5.1

MPLS 3.7Humanities (1.4)

Continuing Education 0.6

Services 1.6

Central Costs & Adjustments 12.5

Target 2013/14 31.1


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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

Page 25


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Threats to future surpluses

OUP funding may reduce

Increased pay awards

Cost of maintaining existing estate

Expansion of estate sizeROQ, Medical Sciences

Reduce funding from Research Councils

Move towards EU and other research funders

Desire of surplus departments to invest for the future

Page 26


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EBITDA ProjectionsDue to increase in staff costs, sustainability gap widens in later years

Page 27

0

20

40

60

80

100

120

2006/07

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

Surplus

'm

EBITDA surplus

Target EBITDA s urplus

88m = 7 .3

45m = 3.7


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Page 28

reconcile

Developing the capital plan

123

4

5

6

78...

trac

growth

surplus

grants

disposal

philanthropy

debt

conditio

n

depreciation

growth

projects

PRAS OUESFinance

Estimate demand Estimate supply

Capital planning

due to completein Michaelmas

Strategic financing

plans now beingdeveloped


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Any questions?

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Further information

Tom 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
http://www.admin.ox.ac.uk/finance/processes/planning_reporting/mailto:[email protected]:[email protected]://www.admin.ox.ac.uk/finance/processes/planning_reporting/

finance briefing presentation april 2013

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