British endowment slump outstrips US percentage losses

Universities’ income from endowments and investments fell by 32 per cent in the past financial year, down from £521.8 million to £356.9 million.

The decline from 2007-08 to 2008-09, following the economic slump, is revealed in figures published today by the Higher Education Statistics Agency.

In the US, the value of endowments at leading universities fell by an average of 23 per cent in the year to June 2009, according to a recent survey by the National Association of College and University Business Officers.

Harvard University’s endowment fund lost .3 per cent of its value, while Yale University’s fell by 28.6 per cent.

The Hesa figures show that all other sources of income for UK universities increased during the period, resulting in an 8.3 per cent rise in income for the sector as a whole to £25.4 billion.

Funding bodies provided £8.8 billion, while tuition fees and education contracts contributed £7.3 billion.

However, the rise in income was outstripped by an increase in the sector’s expenditure, which rose by 9 per cent to £24.9 billion.

Staff costs contributed £14.2 billion towards this total, a rise of 7.9 per cent, although the wage bill fell as a percentage of total expenditure to 56.8 per cent, compared with 57.4 per cent the year before.

The University and College Union said that this was the lowest percentage since Hesa started publishing data on the higher education sector in 1994-95, and “made a mockery” of claims by some universities that rising wage bills were the reason they were looking to cut jobs.

Interest and other finance costs increased by 33.3 per cent year on year.

Hesa has also published the results of its annual Higher Education Business and Community Interaction (HE-BCI) survey, which measures relationships between universities, business and the wider community.

The survey shows that in 2008-09, universities received £938 million under research contracts with external partners, £332 million from consultancy contracts and £559 million from providing courses for businesses and the community.

A further £56.5 million was earned from licensing fees and royalties. Spin-offs in which universities retained some ownership earned £548 million.

melanie.newman@tsleducation.com