The University's finances at a glance 2023/24

Understand where our money comes from, how it's spent and the financial opportunities and challenges ahead.

• Summary of key financial results
• Where our money comes from
• Where we spend our money
• Key activity spend
• Investing in the student experience
• University reserves and resources we can spend

Summary of key financial results

The continued strong demand for student places at Manchester, combined with excellence in world-leading research has led to a marginal increase in total income and another year of record levels of income at £1.4 billion. Despite cost pressures and increasing levels of expenditure (excluding changes in USS pension deficit recovery plan), the University has managed its finances to continue to generate positive cash-flows for reinvestment to deliver the strategic objectives.

The University’s total adjusted operating surplus for the year (excluding changes to the USS deficit recovery plan) is £41.6 million, 3% of total income, a reduction of £65.2 million on the previous year.

The University does not make a profit; all surpluses are reinvested to fulfil our core goals.

In 23/24 our income grew by £20.1 million to £1.4 billion due to:

• an increase in international tuition fees of £53.9 million;
• a continued uplift to our research funding following the results of the Research Excellence Framework 2021;
• higher interest income on our deposits.

These were partially offset by decreases in funding body grants of £33.2 million, other income of £21.3 million and donations and endowments of £10.3 million. Note that prior year income included substantial receipts for the Paterson Building which were not matched in 2023/24.

Expenditure for 2023/24 includes a credit of £299.2 million in relation to the 2023 valuation of the USS pension scheme and the resultant changes to the deficit reduction plan. Excluding this one-off credit, total expenditure for 2023/24 of £1,323.2 million has increased by £85.4 million or 6.9%. The majority of the increase (£68.5 million) relates to pay costs driven by a consolidated increase of 792 FTE staff, which equates to a growth of 7.5% on the previous year.

Where our money comes from

Tuition fees represent 52% (£714 million) of the University’s total annual income (£1.4 billion): 37% UK and 63% international student fees. In 2023/24, UK undergraduate fees remained at £9,250, so are declining in real terms as inflation increases the costs of teaching delivery.

Our other main source of income is research-related, which has been impacted by an increase across all areas of the research project portfolio in 2023/24. Most of the increase in government funding is attributable to Research England funding as the University benefitted from excellent REF 2021 outcomes.

Capital income is grant income for the purchase of research equipment and, on occasions, towards a building.

Other income includes other grant income and donation and investment income.

Where we spend our money

The largest proportion of our income is spent on our staff (£693 million annually or £58 million per month), who support the delivery of our core goals. Our staff costs have grown significantly over recent years due primarily to inflationary pay awards, automatic pay increments and increased pension costs.

The University invested in new posts to support student experience, increased student recruitment and strategic change programmes. The increased research activity also increased staff costs, but this was offset by significant staff vacancies across the University. This has meant that staff costs are now 52.0% of income versus 49.4% in 2022/23.

Other operating expenditure (OOE) across research, teaching and general administration of the University has increased by £17 million due to growth in academic and related expenditure linked to additional research spend, an increase in student support, additional library costs and increased travel, especially fieldwork trips. Residences, catering and conferences costs also increased due to increased halls of residence lease costs. These were partially offset by a decrease in administration and central services costs due to costs of living payments made to students in the prior year.

The University spent £120 million on pensions in the year and pays £18 million per annum in loan interest.

Key activity spend

Excluding the one-off pension scheme adjustment, expenditure is up by £85 million (7%) due to increases in pay costs and general high inflation.

The University’s largest areas of spending by activity are in our academic teaching departments (£526 million), research (£213 million) and running our estate of buildings (£201 million).

Investing in the student experience

In the year in review, we invested £3.3 million in the Fallowfield Campus Redevelopment Project, which will replace existing bed spaces with up to 3,300 new state-of-the-art bed spaces, increasing the number of beds by up to 950. A further £5.2 million was spent on capital improvements across halls of residence.

Other key investments include:

• £1.9 million investment in new teaching capacity and new course development in Humanities;
• £4.2 million on enhancing the student experience, providing greater flexibility and personalised services;
• £3.0 million grant given to the Students’ Union (increase of £0.1m from 2022/23).

University reserves and resources we can spend

Cash and short-term investments is the only resource the University can spend. We need to keep £280 million of cash to fund our next three months operating costs (largely staff costs). At the end of July 2024, the University had £489 million in cash and short-term investment.

The University has many areas it continues to need to invest in: student and staff-related facilities and support, IT infrastructure services and further cyber-attack prevention, maintenance of its substantial and diverse estate, and general improvement of its processes. With these challenges, the University’s need for continued and extensive investment means that cash generation for re-investment is critical.

Over the next 10 years, based on an exercise a couple of years ago, it was anticipated that we will need to spend approximately £2.3 billion on residences, building maintenance, IT infrastructure and on our journey to zero carbon. We are currently embarking on a major infrastructure strategy review which will take up to 18 months to complete. The quantum of the funds required and what we have available will be properly assessed then and may have increased. The amount available that we can fund is dependent upon the University being able to deliver sufficient annual surpluses and it is certainly anticipated that we will not be able to afford at least half of the likely cost which will be a huge challenge for the University.

Download our finances at a glance infographic (PDF, 1.97MB) to learn more about our 2023/24 results.