The University's finances at a glance 2021/22
Here are some of the headline messages to give you a better insight into how we are funded, where we invest our income and the financial opportunities and challenges ahead.
The year in review was marked by a number of global challenges. The University moved quickly to adapt and provide immediate support to our staff and students while engaging in an ongoing reprioritisation of activities in line with our strategic plan (Our future).
The rapidly rising cost of living is a cause for serious concern – we do not underestimate the difficulties it is creating for our community and wider society. We have introduced numerous financial and non-financial measures to help alleviate the pressures.
Against this backdrop, our financial results covering the 12 months to 31 July 2022 were strong. We report an improved adjusted operating surplus of £119.7 million (9.8% of income) compared to £61.4 million (5.6% of income in 2020/21). This is partly due to ongoing delays in spending post-COVID and much higher than usual staff vacancies which are negatively impacting on staff workloads and delivering our core mission. Labour shortages are a national phenomenon.
The adjusted operating surplus excludes the impact of a one-off non-cash charge of £219.5 million in relation to the Universities Superannuation Scheme (USS), which recently extended the deficit recovery period by ten years
To find more detail and commentary on the University's finances, you can look at our 2021/22 Financial Statements on our corporate documents page.
Where our money comes from
In 2021/22 total income increased by £116.8 million to £1,217.1 million, an increase of 10.6%. Our two major sources of income are tuition fees – 53% of the total income (2020/21: 53%) – and research grants and contracts at 22% (2020/21: 22%).
The University of Manchester does not make a profit on the income it receives; all income is reinvested to fulfil the University's strategic priorities.
Where our money is spent
During 2021/22 we continued to invest in supporting our three goals of research and discovery; teaching and learning; and social responsibility.
The largest proportion of our income is spent on our staff, who support the delivery of these core goals. Our staff costs this year total £816.8 milion and include a one-off non-cash charge of £219.5 million relating to USS. Underlying staff costs (excluding the significant USS pension adjustment) have increased by 2.4% to £597.3 million.
International student fees
International students are greatly valued by our University, the city of Manchester and the UK and are highly sought after by employers across the world. They bring rich diversity, widening the university experience of other students in what is already a city where up to 200 languages are spoken. They are also valuable members of our alumni community of over 500,000, often acting as ambassadors and important links for the University across the world.
At undergraduate level, we have around 22,000 UK students and about 8,000 international students. These include 2,000 EU students, the majority of whom are paying legacy home/UK fees whereas newly enrolled students from the EU from 20/21 onwards pay an international fee. We have many more international postgraduate taught (master’s) and research (PhD) students, but the fees are set very differently.
The information below mainly covers undergraduate students, but many aspects also apply to postgraduate students.
The fee for UK undergraduate students has been fixed at £9,250 for about 10 years. By 2024–25, the £9,250 annual fee will only be worth £6,600 in 2012–13 prices. If the fee had kept pace with inflation, it would be £13,000 in today’s prices. The value is further declining as a result of today’s high inflation.
The University receives a further teaching grant from the government for some UK students only. This varies by subject, but in 2021/2022 was about £37 million, which works out as, on average, a further £1,700 per UK student. Even with the annual fee and the extra teaching grant from the government, which only covers certain ‘high cost’ subjects, overall UK universities lose money on UK undergraduate teaching. This is set to get worse as inflation is high and increasing.
Most UK students take out a loan to pay their fee, but a significant portion of loans are not paid back for a whole variety of reasons. The extra costs on non-repayment (known as the RAB charge) are about 45% – or an additional £4,000 per UK student. This is paid by UK taxpayers, not to universities but to the Student Loan Company to cover unpaid debts.
There are further subsidies by the UK government, charities and businesses which benefit all students, whatever their domicile. For example, around 1,500 of our teachers are graduate teaching assistants (GTAs). They are paid extra by the University to teach, but their main stipend or salary is paid from the above sources, particularly the UK government. A number of our staff who teach students (academic and research staff) have part or all of their salaries paid directly or indirectly by the UK taxpayer, usually through research grants and contracts and research fellowships.
These subsidies, together with an element from international student fees, enable the University to achieve its exceptionally high global standing in research and recruit top quality staff to provide teaching, both of which are key reasons that international students (and their sponsors) choose The University of Manchester as their destination against the backdrop of a highly competitive global market. The outstanding career and personal achievements of our global alumni provide further evidence of the value conferred by a Manchester degree.
A number of our buildings and equipment are paid for by UK taxpayers. Over the past 10 years this has amounted to around £280 million for buildings alone, not including equipment, books and so on. Some of these are research buildings, but many are used by students for teaching and study.
There are also extra costs necessary for recruiting and supporting international students, such as agents’ fees, visa support, international visits and so forth. These add up to about £18.5 million per annum.
We are not permitted to charge a fee above £9,250 for UK undergraduate students, but each university set its own fees for international students each year. This is based on consideration of costs, relative market pricing and demand – in some areas we are very heavily oversubscribed and from high quality students. We have other measures in place (see below) to support international applicants who could not afford to pay higher fees – though we recognise that this support is limited.
Once a fee is advertised, students do not pay more during their study. Hence, an international student joining in 2022 will pay the same fee for each year of their study even though costs are currently rising by about 10% per year.
Support for international students
We fully recognise the financial impact of international fees on top of other costs such as travel and visas, which UK students do not have to pay, and that there are only a very limited number of scholarships. We have a Cost of Living Support Fund for any student who is struggling, irrespective of whether they are UK or international. International students can also access, free of charge, our counselling and mental health support services. We are also trying to raise funds to support international students ‘in country’ – for example, for Indian students from sources in India and for Chinese students in China.
The Students’ Union has an International Society that puts on a range of activities to make international students feel included and part of the community at Manchester, including English classes, parent-toddler groups and social events.
Learn more about being an international student at Manchester.