FINANCIAL STATEMENTS 2018 for the YEAR ENDED 31 JULY 2018 Officers and Advisers
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FINANCIAL STATEMENTS 2018 FOR THE YEAR ENDED 31 JULY 2018 Officers and advisers CONTENTS OFFICERS Chair of Nominations Committee Chancellor Mrs Gillian Easson, MA, FRSA Mr Lemn Sissay, MBE Chair of Staffing Committee 1 Chair’s foreword Pro-Chancellor Mr Paul Lee, DL, MA, LLM, (from 1 December 2017) Mrs Gillian Easson, MA,FRSA 2 Review of the year by MEMBERSHIP OF THE BOARD OF GOVERNORS President and Vice-Chancellor Professor Dame Nancy Rothwell, From 1 September 2018 Professor Dame Nancy J Rothwell, DBE, DL, BSc, President and Vice-Chancellor PhD, DSc, FRS, FMedSci, FRSB, FRCP(Hon), FRSA Category 1, ex officio members (2) Deputy President and Deputy Vice-Chancellor 5 Key performance Professor Dame Nancy J Rothwell, DBE, DL, BSc, Professor Luke Georghiou, BSc, PhD, MAE, FRSA indicators PhD, DSc, FRS, FMedSci, FRSB, FRCP(Hon), FRSA Chair of the Board of Governors President and Vice-Chancellor 6 The year in pictures and Pro-Chancellor Miss Fatima Abid, BSc (Hons), General Secretary Mr Edward M Astle, MA, MBA of the Students’ Union 12 Financial review by Deputy Chair of the Board of Governors Category 2, lay members (14) Mr Stephen Dauncey, Dame Susan Ion OBE, BSc, PhD, FREng, FRS, Director of Finance FIMMM, FINucE (until 31 Aug 2018) Mr Edward M Astle, MA, MBA, Chair Dr John Stageman, OBE, PhD, CChem, FRSB Mrs Ann Barnes BA (Hons), Diploma IHM 22 Corporate governance statement (from 1 September 2018) Mr Gary Buxton, MBE, BA (Hons.) MIoD Registrar, Secretary and Chief Operating Officer Mr Michael Crick, BA 26 Remuneration Mr Will Spinks, BSc, Chartered MCIPD Mr Colin Gillespie, BSc (Hons), FCA Committee report (until 30 September 2018) Mr Nick Hillman, MA Mr Patrick Hackett BArch (from 1 October 2018) Mrs Bridget Lea, BA (Hons) 30 Modern slavery and human Director of Finance Mr Paul Lee, DL, MA, LLM trafficking statement Mr Stephen Dauncey BSc, FCCA Dr Neil McArthur, MBE, CEng, FIMechE, FIET Mr Robin Phillips, BA (Hons) 34 Statement of the Board of VICE-PRESIDENTS (POLICY) Mr Andrew Spinoza, BA, MCIPR Governors’ responsibilities for Teaching, Learning and Students Dr John Stageman, OBE, PhD, CChem, FRSB, the year ended 31 July 2018 Professor Clive Agnew, BSc, PhD Deputy Chair Research Mr Richard Solomons, BA (Econ) (Hons), ACA 35 Independent auditor’s report Professor Colette Fagan, BA, MSc, PhD, FAcSS Mrs Alice Webb, M.Eng, Hon DA to the Board of Governors of The University of Manchester Social Responsibility Category 3, members of the Senate (7) Professor James Thompson Professor Aneez Esmail, PhD, MRCGP, MFPHM, 41 Financial Statements for the VICE-PRESIDENTS AND DEANS OF FACULTIES FRCP year ended 31 July 2018 Science and Engineering Professor Danielle George, MBE, BSc, PhD , FIET Dr Reinmar Hager, MSc, PhD 42 Statement of principal Professor Martin Schröder, BSc, CChem, PhD, accounting policies DIC, FRSE, FRSC, MAE Dr Steven Jones, PhD, PFHEA Humanities Professor Silvia Massini, Laurea, MSc, PhD 47 Consolidated statement Professor Keith Brown, MA, PhD, FRHS, FRSE Professor Nalin Thakkar, BDS, MSc, PhD, FRCPath of comprehensive income Biology, Medicine and Health Dr Delia Vazquez, B.A. Hons, MPhil, PhD Professor Ian Greer, MD, FRCP(Glas), FRCPE, Category 4, members of staff other than 48 Consolidated statement FRCP, FRCPI, FFSRH, FCCP, FRCOG, FMedSci academic or research staff (2) of changes in reserves (until 31 July 2018) Professor Peter Clayton BSc MB ChB, MD, MRCP, Mr Shumit Mandal, BSc 49 Balance sheet FRCPCH Interim Vice-President and Dean Ms Rosalyn Webster, BA MA (from 1 August 2018) The following were members of the Board of 50 Consolidated statement Professor Graham M. Lord MA, MB BChir, PhD, Governors in the previous academic year, to the of cash flows FRCP (from early 2019) dates shown: Dapo Ajayi, B. Pharm, MRPharmS (31 August 2018) 51 Notes to the financial statements CHAIRS OF COMMITTEES OF Professor Colette Fagan, BA, MSc, PhD, FAcSS THE BOARD OF GOVERNORS (31 August 2018) Chair of Audit Committee Dame Susan Ion, OBE, BSc, PhD, FREng, FRS, Dame Susan Ion, OBE, BSc, PhD, FREng, FRS, FIMMM, FINucE (31 August 2018) FIMMM, FINucE (until 31 Aug 2018) Dr Caroline Jay BA, MSc, PhD, CPsychol Mr Colin Gillespie, BSc (Hons), FCA (31 August 2018) (from 1 September 2018) Ms Isabelle Perrett, MA (31 August 2018) Chair of Finance Committee Dr Dame Angela Strank, DBE, BSc, PhD, Ceng, Dr John Stageman, OBE, PhD, CChem, FRSB FREng, FIChemE, HonFEI (31 August 2018) Chair of Remuneration Committee Mr Alex Tayler, BA (30 June 2018) General Mr Gary Buxton, MBE, BA (Hons) MIoD Secretary of the Students’ Union (from 18 April 2018) Chair’s foreword In a difficult year for the whole higher education sector, the University continued to make strategic progress but our financial performance deteriorated compared to the previous year. It continues to be a testing time for British University’s social and economic importance with the HE Senior Staff Remuneration Code universities. Their financing is under scrutiny, to the region and the nation, along with its – you can read our Remuneration Committee’s with the Review of Post-18 Education and growing portfolio of global programmes and report in this publication. The Board has Funding, launched by the government in partnerships, illustrate its continued impact and continued to make progress in implementing February, seeking answers to questions around focus on the future. On behalf of the Board of recommendations from the external review of choice, access, value for money and skills Governors I would like to thank the President governance effectiveness which was completed provision. and Vice-Chancellor, the Senior Leadership in 2016/17, resulting in enhancements to Board Team and all academic and support staff for practice. This work has included a review of Economic conditions have also been extremely their ongoing dedication. the University’s governing instruments, which difficult. Brexit continues to be a source of will conclude in 2018/19. We also refreshed uncertainty, competition is increasing globally In addition to the highest calibre of strategic our Board’s membership with four new lay and tuition fees have been frozen for a further leadership and financial management, the members. year, putting pressure on funding. We have seen University can count on robust governance. particular difficulties in relation to the funding This year saw the University continue its With these leadership, financial management of pensions, with some staff taking industrial rigorous approach to senior remuneration and and governance structures in place, I am action in protest at proposed changes. performance evaluation, and fully comply confident that the University can respond to the present climate and pressures, deliver As you will see on the pages that follow, the its strategic objectives and continue to bring University reported a drop in its underlying benefits locally, nationally and internationally. operating surplus, owing to income levels being below expectations and ongoing challenges to operating costs. Some actions have already been taken, and others are in hand, to bring our operating surplus back to our target Edward M Astle range of 5–7% of income. This is essential for Chair of the Board of Governors our ongoing investment and the University’s and Pro Chancellor sustainability. At the same time, the University continued to make progress against many of the strategic priorities set out in its Manchester 2020 vision. There were local and international successes in research, a strong level of undergraduate applications, and national recognition for our social responsibility initiatives, as outlined in the President and Vice-Chancellor’s review. The FINANCIAL STATEMENTS 1 These financial statements cover a challenging year for all UK universities. Amid increasing external pressures and competition, we saw a fall in our operating surplus. We continue to invest in our strategic priorities, but we must address the level of our surplus to ensure the sustainability of our University. 2 FINANCIAL STATEMENTS President and Vice-Chancellor’s review of the year Even by recent standards, 2017/18 was an University of Manchester Superannuation while we received two national awards from eventful year for the higher education sector. Scheme (UMSS), which also faces major Understanding Animal Research for our sector- Universities were under stronger scrutiny financial challenges. For both schemes, leading transparency. than ever, with significant media coverage and communication between all parties remains political debate relating to value for money. key as we seek to find ways forward. Research grant and contract income, including The financing and sustainability of the sector’s research capital income, was £298.7 million, defined-benefit pension schemes was a major It was also a year of organisational change. a growth of 14% compared to the previous concern too. As examples, we established University of year. A number of significant funding awards Manchester Worldwide as the vehicle for the were received by the University. Among the In February, the government announced the University’s expansion of distance and blended highlights were a £13.3 million core award for Review of Post-18 Education and Funding to learning. We also gained approval to change our Cancer Research UK Manchester Institute, examine questions of choice, access, value and the structure of the Faculty of Science and £7.5 million from the Science and Technology skills provision in the sector. In this context, Engineering from nine Schools to two, a change Facilities Council for the eMerlin/VLBI National positive news – such as the Russell Group intended to raise the quality of all academic Facility, £5.8 million from the National Institute report that showed its 24 member universities activities, build new collaborations and help to of Health Research for the Greater Manchester generated almost £87 billion gross value simplify and standardise processes. Patient Safety Translational Research Centre added for the UK economy in 2015/16 – was and almost £4.3 million from the Economic sometimes lost.