2023/24 marked the first year delivering our Financial Strategy 2023-27 . Last year we shared an update on our financial performance in 2022/23 , where we set out our focus on maintaining UCL’s financial sustainability and supporting our priorities over the coming five years.
Over the past year, our continued focus on building financial resilience, controlling costs, and investing strategically has enabled UCL to navigate increasing volatility in student numbers, and ensured that our financial position remains healthy. The determination of colleagues across UCL to improve efficiency and effectiveness has been instrumental in strengthening our financial position, and I want to take this opportunity to thank you for efforts.
Efficiency and improvement will continue to be a priority for UCL, and the Services Simplification Programme presents another opportunity to continue this journey by thinking about how our professional services functions work better together.
Performance in 2023/24
In 2023/24, UCL’s total income was £2.07bn and total expenditure was £1.97bn. For the first time in recent history, UCL - like many across the sector - had to manage a significant shortfall in student numbers and income. Efforts to control spend helped UCL to deliver an operating margin of £103.6m (5% of income), in line with our target. This operating margin is reinvested in maintaining and improving our estate and digital infrastructure.You can find UCL’s Annual Report and Financial Statements on our Finance related strategies, reports and statements webpage.
We continued to implement the UCL pay strategy (agreed in July 2023), designed to make salaries more competitive within and outside the higher education sector. We also prioritised capital investment to ensure UCL maintains and improves our physical and digital infrastructure so that our students and staff can work, study and collaborate in an environment that supports excellence, research and innovation.
We welcomed staff and students to UCL East , which opened in September 2023, and purchased the historic Dr Williams’s Library and Henry Morley Building on Gordon Square to ensure they will be at the heart of UCL’s Bloomsbury campus for future generations to use. We continued the work on implementing MyServices , a university-wide platform aimed at creating a more unified and improved service delivery for UCL shared services. And progress continues as planned on the design and construction of Oriel , a world-leading centre for advancing eye health through a partnership between Moorfields Eye Hospital NHS Foundation Trust, the UCL Institute of Ophthalmology, and Moorfields Eye Charity.
Looking Ahead
Across the sector, financial sustainability will remain a challenge. Universities - including those in the Russell Group - are faced with rising costs and increasingly volatile student numbers. Recognising this pressure, the UK government decided to uplift the cap on home undergraduate fees for the first time since 2017. However, for most universities - including UCL - this increase will not outweigh the additional cost of increases in National Insurance, and the focus on financial sustainability must continue.As 2023/24 came to a close, we received the unwelcome news that our main construction partner for the Institute of Neurology Dementia Research Institute (IoNDRI) was entering into administration. Mace has since been appointed to complete the project , but construction has been delayed, and the cost to complete The programme team are working closely with finance colleagues to ensure careful financial management going forward.
Faced with a challenging environment, the University has strengthened efforts to secure the financial future of UCL. With the support of Academic Board and Council, a plan has been agreed to build financial reserves that, once the reserves are built up, will increase UCL’s financial resilience and ensure UCL is more protected from volatility in income or expenditure in future. Long-term investment in the estate and digital infrastructure will be maintained, and other long-standing priorities around staff pay and academic excellence will remain.
As we continue to navigate an uncertain landscape for higher education, our new Integrated Planning Process presents the opportunity to ensure academic, educational, and financial strategies are aligned across the university. This approach will ensure we invest wisely in priorities whilst maintaining our financial resilience. To support these conversations, Finance colleagues are providing training for Heads of Departments, equipping them with the tools and knowledge to effectively manage their finances. While UCL and the higher education sector face continuing financial challenges, the steps taken last year, and those planned, ensure UCL is in a more secure position to deliver on its strategic objectives.
Charu Gorasia, Vice-President (Finance, Commercial and Estates) and Chief Financial Officer
- University College London, Gower Street, London, WC1E 6BT (0) 20 7679 2000
