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What Do Universities Spend Their Money On?

16/11/2016 13:31

In this era of £9,000 fees and graduate repayments, students - and their parents - are understandably demanding more from universities and asking how their fees are being spent.

Indeed, a recent survey found that 75% of students did not feel they have enough information on what universities spend their money on.

With confirmation that universities in England will be able to increase their fees, in line with inflation, to £9,250 from next year (2017-18), public interest in this area is only likely to increase.

Universities have been responding to this challenge, making the financial information they already publish more accessible and meaningful to students and parents.

But there has not, until now, been an overall picture in terms of university spending across the whole higher education sector. That is why we have produced a new, interactive explainer highlighting what universities across England are spending their money on.

What is clear from this explainer is the range of things universities must spend money on to maintain their excellence in teaching, research and other key areas - and how activity across all of these areas ultimately benefits the paying student.

So what do universities spend money on?

When people think of fees and university funding, often issues such as contact hours and number of lectures spring to mind. But as our explainer demonstrates there is more to the income and expenditure of universities than just fees and lectures.

Here are five areas on which universities spend money to ensure that all students get the best from their time in higher education.

1. The £14.4 billion spent by universities in 2014-15 on teaching and research within academic departments covers not just the cost of employing academic staff but also support and administrative staff, and the costs of designing courses, assessment, lecturers' research projects, and out-of-hours and one-to-one support.
2. In 2014-15 universities spent £1.34 billion on running the student accommodation they own.
3. In the same period universities spent £630 million running 390 libraries. At 94 of 130 universities, libraries are open 24/7 for all or some of the year.
4. Universities between them spent £833.8 million on scholarships and bursaries to support students in need of financial help to be able to go to (and stay at) university.
5. There are a whole host of other services for students that universities need to fund: in 2014-15 universities spent a total of £871 million on careers services, students' unions and societies, counselling and health services, sports facilities, accommodation offices, crèches, and transport for students and staff around campus.

How do universities fund all this spending?

£9,000 a year in fees is a big investment, but in the overall picture of university income it is only part of the story. Only around one quarter (27%) of university income comes from home student fees. The rest comes from a combination of government sources, international student fees, and the income universities get from their business activities, investments and charitable donations.

Along with showing this breakdown of income, our new explainer allows anyone to explore in detail all the different areas of university spending that together make up a UK-wide picture of significant investment in students, their education and overall university experience.

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