Integrated Annual
Report
2019-20
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Contents
Contents
Review of the year Relationships and resources Highlights of the year 4 Our People: students and colleagues 39 Introduction from the Chair of Council 6 Infrastructure 44 Conversation with the Environmental sustainability 47 VIce-Chancellor and President 8 Networks and partnerships 48
Effectiveness and The University financial sustainability 49
Overview 10 The University at a Glance 2019-20 14 Financial Review 50 Charity status and Public Benefit Statement 16 Value creation model 18 Corporate Governance 56 Materiality and risk 20 Remuneration Report 62
Strategic review Financial Statements
Our Vision and Strategy 24 Independent Auditor’s Education for life 26 Report to Council 65 Research for discovery Statement of Principal and impact 30 Accounting Policies 67 Engagement and place Consolidated and for Society 33 University Statement of Comprehensive Income 72 Global 36 Consolidated and University Statement of Changes in Reserves 73 Consolidated and University Statement of Financial Position 74
Consolidated Cash Flow Statement 75
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Contents
2019-20 Integrated Annual Report
Our 2019-20 Integrated Annual Report
provides an overview of the University and our strategic objectives summarises our value creation model describes our key stakeholders and partnerships explains our approach to materiality and risk outlines key factors influencing performance reports on relationships and resources describes our governance structure reviews financial performance over the past year provides a view of our future prospects This year’s report is inevitably and significantly shaped by the Covid-19 pandemic and we will aim to show the impact the pandemic has had on the University during the past year and how we believe it will shape our future.
We are working to be at the forefront of integrated In relation to the IIRC Framework for integrated thinking and reporting in the higher education sector. reporting, we confirm that Executive Board and Our annual report is informed by the Integrated Council have been involved in the development of this Reporting framework developed by the International Integrated Annual Report. Council acknowledges its Integrated Reporting Council (IIRC). This framework overall responsibility for the accuracy and integrity of has been adopted across the globe to make more the Report’s contents. We recognise that this report effective use of resources, improve decisions and does not yet fully comply with the IIRC Framework enhance accountability, stewardship, transparency and more work will be carried out in the coming year and trust. We use the framework to help us to develop our approach to reporting. This will be understand the strategic enablers and co- informed by external peer review arranged by the dependencies that materially affect our ability to IIRC. create value for our colleagues, students and external partners, and thereby to deliver our Vision and Strategy.
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Review of the year
Highlights of the year
November 2019
The Frederick Douglass Centre, our new learning and teaching centre, is officially opened by Kenneth B Morris Jr, a direct descendant of the world-renowned activist, author and abolitionist.
August 2019
Students, staff and alumni come together to celebrate a decade of teaching at our NUMed campus in Malaysia.
December 2019
Newcastle expert Professor Francisco Figueiredo becomes the first in the country to provide sight- saving NHS stem cell treatment to patients.
September 2019
Newcastle and Groningen universities reaffirm their long-standing partnership and commitment to climate change action.
January 2020
Scottish Makar and Professor of Creative Writing Jackie Kay is awarded the CBE for services to literature.
October 2019
Students get a helping paw to manage their mental health, thanks to the University’s newest recruit – Bessie, the Jack Russell.
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Review of the year
May 2020
Newcastle will lead a new National Centre to support enterprise, resilience and innovation among rural firms and unlock the untapped potential of rural economies across the UK.
February 2020
Blue Shield signs a Memorandum of Understanding with the International Committee of the Red Cross in Geneva, bringing Professor Peter Stone's ambition of preventing the destruction of cultural property during conflict a step closer. June 2020
Dr Meenakshi Choudhary, a leading fertility specialist, is a finalist in this year’s Asian Women of Achievements Awards.
March 2020
Newcastle is selected to lead a national network of four cutting-edge centres to enable faster collaborative research and development of electric July 2020 machines - including cars, planes and ships. Selfless students are recognised by the city’s universities for going above and beyond to support their neighbours during lockdown.
April 2020
Some 300 medical students graduate five weeks early to enable them to begin their careers as doctors and support the NHS during the unprecedented Coronavirus pandemic.
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Review of the year
Introduction from the Chair of Council
As Chair of Council, it is my pleasure to present to you this report on behalf of all those who contribute to the ongoing success of Newcastle University. I would like to begin by thanking my Council colleagues, the University Executive team and the wider University community of students, staff and external partners for their outstanding levels of hard work, commitment and flexibility in navigating our way through a very complex, uncertain and turbulent year.
Paul Walker Chair of Council and Pro-Chancellor
Covid-19 presented higher Whilst Covid-19 has undoubtedly education with an existential crisis, had an impact upon the pace of impacting the entire range of our implementation of our strategy, we activities. It highlighted the shouldn’t lose sight of the progress importance of the inter-relationship that has been made across all of research and education in areas of the strategy. The rapid maintaining our position as the transition to delivering blended North East’s largest research learning was enabled by University. underpinning work with our Virtual Learning Environment and The fast and decisive action taken Technology Enhanced Learning by the Executive team in reaction strategy. This has been matched by to Covid-19 enabled the University developments in our physical to maintain a strong financial campus and estates, including the position and protect jobs. opening of the Frederick Douglass Colleagues rapidly transitioned Centre, a new dedicated learning from on campus and face to face to and teaching centre named after virtual, blended and online ways of the world-renowned activist, working and teaching, enabling our author and abolitionist. 2019-20 students to graduate and Overall the recruitment of our 2020-21 The pandemic has increased the Student Satisfaction intake. emphasis on the University’s 2019-20 regional role and contribution Covid-19 is not the only major responding to the challenges of the threat we have been responding to. levelling-up agenda. University National Student Survey In last year’s report I highlighted researchers across a range of three significant external disciplines were quick to respond 82% challenges facing the University; to the national challenges Covid-19 Brexit, the Philip Augar Review of presented. The University has Postgraduate Taught Post-18 Education and the financial played a key role in the North East Experience Survey sustainability of our pension Covid-19 economic response schemes. group. 82%
International Student Barometer
93%
Read more pages 26-29
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Review of the year
We have continued to strengthen prestigious Global Challenges Kay was awarded the CBE for our position as the North East’s Research Fund Hubs. services to literature. largest research University supporting vital UK research and I am proud of the University’s Imtiaz Dharker, the renowned poet innovation. This includes further long-standing commitment to and artist, was announced as the investment in high profile National social and environmental justice new Chancellor. Professor Muzz Research and Innovation Centres and equality, diversity and Haniffa was awarded the Foulkes leading advancements on data, inclusion. Last year we were ranked Foundation Medal. ageing and Rural Enterprise. The 11th in the THE world rankings for As we move into 2020-21, my University was awarded £33m to our impact on society and priorities are to ensure that the lead the UK network of centres that leadership in sustainable University emerges from Covid-19 will deliver the Driving the Electric development. We were also one of in a stronger position, having Revolution programme that will the first universities in the UK to learned lessons from the crisis and help propel UK manufacturing to declare a climate change worked hard to put in place the forefront of global efforts to emergency and are committed to a measures to mitigate risks. We will tackle climate change. We were net zero future. We became a continue to focus on improving also awarded Academic Health member of the Race Equality student satisfaction, advancing Sciences Centre status for Charter last year and stood firmly in knowledge, growing the economy Newcastle Health Innovation support of all our colleagues and and championing social justice. Partners. students in supporting Black Lives Matter, Black History Month and Whilst our expectations of financial We have invested in future decolonising our curriculum. performance in 2020-21 as we research leaders strengthening our recover from the Covid-19 impact inter-disciplinary research portfolio. I would like to record and celebrate are lower than for a normal Two of the eight Royal Academy of the achievements and contributions operating year, the strategy, vision Engineering Chairs in Emerging of some outstanding individuals and priorities we set in 2018 remain Technologies Awards were made who have enriched our University. true. to colleagues at Newcastle Dame Teresa Graham, one of our
University. We remain the only UK Council Lay Members, was institution to have won two awarded the DBE for services to small businesses. Professor Jackie
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Review of the year Conversation with the Vice-Chancellor and President Professor Chris Day reflects on a year like no other
2020 has been dominated by Covid-19. How well do you think the University has responded? Looking back over the past eight months, I’m extremely proud of our response. Thanks to the dedication and sheer hard work on the part of every single member of our Newcastle community - academic and professional services, colleagues and students alike - we were able to adapt to circumstances that none of us could have possibly predicted at the beginning of 2020. Naturally, at the onset of the pandemic our immediate priority was safeguarding the health and wellbeing of our colleagues and students on campus and communicating the constantly volunteering initiative providing needed more urgently than ever. It evolving government advice. As the practical help for overstretched would be hard to envisage a more situation progressed rapidly to full health workers, while Computer ringing endorsement of the lockdown, our focus changed to Science students volunteered to resilience and civic spirit that the critical task of ensuring that we support NHS IT helpdesks. characterises our University. could continue to deliver a high standard of teaching and learning Our estate played its part too. We How confident are you that the to our students remotely. We also loaned equipment to the national University will recover during the quickly put measures in place to screening centre in Milton Keynes, coming year? support students who were and offered free accommodation in struggling with access to IT and University Halls of Residence and I think ‘cautiously optimistic’ would broadband, including distributing free parking on campus for be a good way to describe our laptops and ‘dongles’ to students healthcare professionals at our current position. That said, as it without their own equipment. local hospital. becomes clear that Covid is very much still with us and will be for At the same time, researchers from These are just a few examples of some time to come, there are all three of our faculties mobilised our response, but none of it would undoubtedly challenges ahead. to redirect their expertise towards have been possible without the the national and international effort efforts of our colleagues and Throughout the summer, we have to combat Covid-19. Our scientists students. As Vice-Chancellor, I been putting detailed plans in joined the race to develop rapid could not have asked for more, and place to enable us to welcome diagnostics and targeted I owe a huge debt of gratitude to students back to campus to start or experimental therapy for the virus, them all. recommence their studies through our rural economists worked on a combination of present-in-person advice for the government on the So yes, I am incredibly proud of our teaching and remote study. resilience of food chains and food University and all we have Lockdown also resulted in many of security, our energy experts achieved during the pandemic. our valuable research projects studied the effects of the lockdown being paused, so we have ground on energy use across the UK, while Perhaps, though, my proudest to make up. our data scientists monitored the moment of all came when I impact on our urban environment. presided over a virtual graduation The financial impact of the ceremony for some 300 of our final pandemic, in terms of the A team of fourth and final year year medical students. These brave availability of research funds, is students set up the North East young doctors graduated early to potentially far-reaching. We group of Medical Students Helping start their careers supporting the worked closely with the Russell Hands, part of a national NHS at a time when their help was Group and Universities UK to lobby
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Review of the year the government to provide Black Lives Matter has also been a institutional and cultural barriers additional funds to bolster the key issue in recent months. How is that stand in the way of our research and innovation efforts that the University reacting to the colleagues and students from will be vital to the recovery of the challenges of racism? minority ethnic backgrounds. As UK and our ability to compete on a part of this, we conducted a Race global scale in the long term, and Recent events, among them the Equality Survey among colleagues are pleased with their response. appalling circumstances and students, the results of which surrounding George Floyd’s death have been analysed and now form The pandemic has also placed in the USA, have been felt deeply the basis of our action plan for the renewed emphasis on the by our University community. We year ahead. government’s levelling-up agenda. have witnessed the outpouring of Our areas of research strength align hurt and anger towards the What have been some of the closely with the government’s continued existence of racism highlights of the past year? industrial strategy, and I believe we around the world, despite the best are well placed to leverage support efforts of so many people to foster Although it might feel a little for the crucial role we have to play a more equitable society. strange to talk about highlights in bringing about our region’s future while everyone’s lives have been economic stability. Our long-standing commitment to turned upside down by Covid-19, I our core values of social and think it’s really important that we How will Covid-19 change the environmental justice and equality, don’t lose sight of the many University’s Vision and Strategy? diversity and inclusion is something positive developments during the we take very seriously. We year, before and during the It's not so much a question of continually strive to create a safe pandemic. changing it - our Vision and and welcoming environment for Strategy was never intended to be our diverse international Among our notable highlights, in a once-and-for-all document that September 2019 we celebrated the community of students and th gathered dust on a shelf, but to colleagues – one in which 10 anniversary of our medical serve as a roadmap to guide us everyone has the freedom and school, NUMed, in Malaysia, and towards achieving our ambitions. It opportunity to succeed, regardless that was followed in November by is, and always has been, a bold of their background. the official opening of our new statement of who we are and how learning and teaching centre, the we act. Our values, and our We pride ourselves on instilling our Frederick Douglass Centre. aspiration to be a world-leading values in successive generations of university, advancing knowledge, students, encouraging them to We started the new year with the providing creative solutions and become good citizens as well as announcement of renowned poet solving global problems, hold true providing them with an excellent and artist, Imtiaz Dharker, as our no matter what. education. That said, we recognise new Chancellor. Despite not yet that there is still work to be done if having had an opportunity to Rather I think it is a case of viewing we are to help bring about a real undertake any duties in person due our activities through a ‘Covid lens’ and lasting change. Our efforts in to the postponement of the and adapting to the new world in this respect are being led by my Summer Congregations, she has which we find ourselves. The deputy, Professor Julie Sanders, already proved to be a very strength of our four underpinning working very closely with the engaged Chancellor, recording strategies lies in the fact that they Students’ Union and our BAME several encouraging and uplifting were designed in such a way as to colleagues’ network. Earlier this video messages and specially enable us to flex and respond to year, in the aftermath of events in penned poems. rapidly changing external the USA, we joined the Students’ We have been awarded another conditions and the challenges Union in hosting a Black Lives National Innovation Centre, for facing not just our sector, but Matter: Our Collective Humanity Rural Enterprise, and will lead a £30 society as a whole. Amid the forum, and this will be followed up million national network of Driving current crisis, this has been with more opportunities for the Electric Revolution centres that evidenced by the speed at which colleagues and students to discuss will help propel UK manufacturing we have been able to redirect their experiences and concerns as to the forefront of global efforts to some of our research and part of our anti-racism agenda, and tackle climate change. resources towards the national and to get involved with ongoing work global effort to combat Covid-19. to decolonise our curriculum. That there are simply too many The foundations laid by our more instances of individual and Engagement and Place Strategy Since becoming a member of the collective success to mention here also mean we have been well- Race Equality Charter last year, is testament to the resilience of our placed to take the lead in defining which was a milestone for us in University and the unending the crucial role of universities in terms of our progress towards commitment and hard work of securing the post-Covid economic addressing racial inequalities, we every one of them for their and social recovery of our region, have been working hard to embed patience, support and positivity working in partnership with the City, the principles of the Charter in all throughout the course of a year local authorities, the NHS, business our policies, procedures and that has been like no other. We practices. This is helping us and cultural organisations. expect 2020-21 to be just as to identify and reflect on the successful.
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The University
Overview
Newcastle University can trace its origins to a School of Medicine and Surgery, established in Newcastle in 1834, and to the College of Physical Science, later Armstrong College, founded in the city in 1871. These two colleges formed one Our Vision and Strategy is to be a Delivery of the core academic division of the federal University of world-leading university, advancing functions occurs in our three Durham, the Durham Colleges knowledge, providing creative faculties, each led and managed by forming the other division. The solutions and solving global a PVC: Newcastle Colleges merged to problems. form King’s College in 1937 and, in Faculty of Humanities and Social 1963, when the federal University The Vision is supported by four Sciences was dissolved, King’s College core strategies covering: became the University of Faculty of Medical Sciences Education for Life Newcastle upon Tyne, latterly Faculty of Science, Agriculture trading as Newcastle University. Research for Discovery and and Engineering We were a founding member of Impact the Russell Group, comprising the Each faculty consists of a number UK’s leading research-intensive Engagement and Place of academic units, typically schools universities. or research institutes, each led and Global managed by a head or director. The The University: core academic functions and line- Strategic leadership of each of management structures combine is home to over 29,000 students these is provided by our Deputy to form the academic map of the Vice-Chancellor, three ‘cross- University in which we envisage the offers undergraduate, cutting’ Pro-Vice-Chancellors faculties as vertical columns, with postgraduate taught and (PVCs) and a number of Deans with the core functions as cross-cutting research degrees in over 60 University-wide remits. We institutional activities. subject areas collaborate with a range of partners on strategic initiatives, helping to leads world leading research, Interdisciplinary and cross- extend the University’s influence spanning a wide range of activity disciplinary activities are and reinforce our ties with the city, with a strategy to address major coordinated and supported by the region and beyond. These include global societal challenges cross-cutting PVCs. The academic Newcastle City Council, local NHS enterprise is supported by a enjoys strong research links with Trusts, North East Local Enterprise number of corporate activities many European and other Partnership and partner universities within the Professional Services international universities in the North East of England. teams. is one of the largest employers in the North East of England, with just under 6,600 colleagues (5,969 full-time equivalents) sits in the heart of Newcastle city centre with campuses in Malaysia and Singapore and a site in London
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The University
Faculty Highlights
Medical Sciences Humanities & Social Sciences Science, Agriculture & Engineering We launched a new Faculty structure as part of our Good-to- Last year we reviewed our Great programme in November management structures following 2019. Faculty research applications the reorganisation to five academic increased by 25% and awards by units in 2017. A highly successful £10m compared with 2018-19. collaboration with academic colleagues led a structure that We celebrated two new Academy supports our plans for excellence in of Medical Sciences Fellows education and research and our (Professors Muzlifah Haniffa and social justice aims. We started to Sophie Hambleton) and four new implement recommendations of NIHR Senior Investigator awards recent international reviews of our (Professors Eileen Kaner, Colin degree programmes, with the first Rees, Lynn Rochester and John initiative being a flexible stage 1 in Simpson). Professor Nigel Harkness engineering. In March 2020, the Faculty led on Faculty PVC We launched the new Research the application and subsequent In the face of disruption as a result England funded National innovation award of an NIHR/NHS England of the Covid-19 pandemic, Centre for Rural Enterprise. This will Academic Health Science Centre colleagues and students rose to the sit alongside our existing successful award, in partnership with our two challenges of the pivot to online National Innovation Centres for local NHS Trusts, Academic Health learning and demonstrated Ageing and Data. Science Network and Newcastle exemplary commitment in City Council. successfully managing end-of-year Our School of Engineering will lead online assessments and ensuring the national ’Driving Electric We were delighted to receive the Revolution’ scheme run by Innovate Times Higher Education that our students could complete their studies successfully. UK to grow the activity in the UK of ‘Outstanding Support for Students’ power electronics, machines and award in 2019, based on an Research income grew by 33% and drives. We will run both the national innovative psychological therapies the Faculty achieved almost £11m programme and the north east training and research clinic model. in new awards. Faculty colleagues centre, building on the expertise of Despite the hurdles of Covid-19, the led the development of two our Electrical Power Group, widely virtual degree ceremony for our NUCoREs in areas of major cross- recognised for its excellence in MB BS students was a triumph, Faculty research excellence: Cities research and teaching in this field. and Heritage. In conjunction with permitting newly qualified doctors Royal Academy of Engineering to work sooner in the NHS, at a time Northumbria University we launched the world’s first Hub for awarded a number of prestigious when they were desperately fellowships, including two Chairs in required. Biotechnology in the Built Environment with £8m funding Emerging Technology (Nat There have been some fantastic from Research England. Krasnogor and Ian Metcalfe) and a individual achievements over the Research Fellowship (Greg Mutch). Our strategic cultural partnerships We are delighted to have recently year, but a highlight has been how played a key role in the University the Faculty has worked together to become part of the EPSRC’s new ranking sixth in the world under ‘top 20’ Tier 1 partners. navigate some of the stormiest SDG 11 ‘Sustainable Cities and waters we have ever encountered. Communities’ in the Times Higher Education’s Impact Rankings. We were delighted to see our colleagues recognised nationally: Jackie Kay, Professor of Creative Writing, was awarded a CBE and Professors Robert Hollands, Alex Hughes, Janice McLaughlin, and Liz Todd were elected as Fellows of the Academy of Social Sciences. We celebrated Athena SWAN bronze awards for two additional schools recognising their work in support of Equality, Diversity and Inclusion, and our Business School was awarded AACSB accreditation Professor David Burn, Faculty PVC for a further 5 years. Professor Phillip Wright, Faculty PVC
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The University
Our principal stakeholders
An organisation as diverse as the University naturally works with a wide range of stakeholders. The principal stakeholders are listed here together with a summary of how we seek to engage with them.
Students Alumni NCLspark, our online alumni networking and mentoring We have over 29,000 students We have more than 235,000 platform, connects current from more than 140 different alumni in 186 countries across the students and alumni to provide countries and they are key to our world and we support a number of career inspiration, personal work. Their activity and success is alumni societies and chapters. development through mentoring described in more detail on pages and professional development In 2019–20, we organised more 39-40. The student voice and opportunities. student engagement are important than 70 events ranging from features of our governance and informal reunions to international Our global alumni community strategic planning processes. As leadership events and the annual joined in the unprecedented virtual active members of the University meeting of Convocation in graduation celebrations for community, students trained by Newcastle. Due to Covid-19 21 Newcastle University’s students Newcastle University Students’ events and some volunteer graduating during the global Union contribute through our initiatives planned for 2020 did not pandemic. We celebrated just consultation system as course take place, however alumni have some of our inspiring global alumni representatives and student chairs continued to engage with and their outstanding personal and of staff–student committees. Newcastle University, supporting professional achievements through Council, Senate, Court and many students affected by the global our ‘Alumni Achievement Awards’, key University committees and pandemic and over 4,500 taking hosted virtually for the first time. groups include student members. part in global research to develop In 2019–20, they contributed more new network initiatives. The local community than 50% of our total income We produce an annual magazine We recognise the importance of through tuition fees and Arches for our graduate community engagement with our local accommodation payments, either which features the latest news from community and businesses and directly or via the Student Loans our campuses and our graduates have key partnerships with civic Company or sponsors. around the world. Alum News is a organisations such as Newcastle Colleagues supplementary digital publication City Council, Newcastle Upon Tyne produced bi-monthly for our alumni Hospitals Trust and Northumbria We have just over 6,600 community. University. These partnerships are colleagues drawn from 98 vital in our plans to develop a Civic countries, including some 585 from The NCL Professional Network University Agreement. the European Union, and they are series supports our alumni’s critical to our success. Their professional development, We have a formal partnership with activities and successes are enabling them to enhance their Newcastle City Council through the described in more detail portfolio of contacts, meet fellow Newcastle Helix partnership and throughout this report, and in alumni and friends working in a we work with Northumbria particular, on pages 41-43. There range of professions, and hear from University and our respective are formal opportunities for sector leading speakers. Many students’ unions to promote good colleagues to be represented in the alumni continue to retain an relations between our students and University’s governance process involvement with the University the local community. We are through elected membership of today and more than 800 of them members of the Confederation of Council and Senate and through volunteered over 1,900 hours of British Industry and the North East engagement with our three their time and their expertise on Chamber of Commerce and have a recognised trade unions: University behalf of the University in 2019–20. regular programme of engagement and College Union, Unison and with businesses and voluntary
Unite. There is also an extensive organisations in the region. internal communications programme.
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The University
We are particularly proud of our education for disadvantaged in the region to promote widening partnerships with local cultural groups. Given its regulatory role, access to higher education through organisations including Tyne and our engagement with the OfS is the National Collaborative Outreach Wear Archives and Museums, predominantly formal and they Programme (NECOP), which we Seven Stories, Northern Stage, The would see the Vice-Chancellor and lead in the North East, and other International Centre for Life and President, as the Accountable initiatives. Sage Gateshead. We have a wide Officer, as their principal contact. programme of engagement with We also work with universities in local schools and colleges and More than 700 funders, drawn from the UK, Europe and across the accredit foundation degrees government, the third sector and world to further our research offered by Sunderland College. The the private sector, contributed interests. We have strategic Great North Museum attracts around £97.7m of research income partnerships with several around half a million visitors every to the University in 2019–20. Many universities including Groningen in year. The University has twice- of these funders have formal the Netherlands and Monash in yearly meetings of Court, with over programmes of engagement and Australia. We have close 40 lay members representing assurance with the University as relationships with our neighbouring business, politics, local government well as a wide range of informal universities in the North East of and the voluntary and community relationships. England. sectors. Partner organisations We are members of Universities Funders and regulators UK, the Russell Group (comprising It is in the nature of the higher the 24 leading research-intensive The Office for Students (OfS) is the education sector that we compete universities) and the N8 Research principal regulator for higher and collaborate at the same time. Partnership (of eight research education providers in England. Its Our principal competitors are intensive universities in the north of responsibilities include those research-intensive universities in England), as well as numerous previously exercised by the Office the UK and, to a lesser extent, other sector-wide bodies that work to for Fair Access to promote universities in the North East. We promote shared services and widening participation in higher work closely with other universities common understanding.
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The University
The University at a glance 2019-20
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The University
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The University
Charity Status and Public Benefit Statement For the year ended 31 July 2020
In developing and overseeing the University’s strategy and activities, Council has had due regard to the Charity Commission’s guidance on public benefit.
It is also aware that, because the restricted. We have a range of phased out following guidance University is charging high fees, it schemes to encourage from the Office for Fair Access to must make provision for those from participation in our academic reduce spend on scholarships and lower income backgrounds to have programmes by students from invest more in outreach. We have the opportunity to benefit from the under-represented socioeconomic retained our core means-tested services provided. The principal groups and those from low income scholarship scheme for students beneficiaries of the University’s households. from low income families. We have services are our students and the committed £42.7m through our public at large. In 2019–20 we provided £2.4m in Access Agreement to student means-tested scholarships to financial support over the next five The Office for Students is the support 1,418 new undergraduate years. We supported 40 mostly principal regulator for most English entrants who might otherwise have full-time taught postgraduates higher education institutions under been unable to afford the costs of from widening participation the Charities Act 2011 and is the going to university. This constituted backgrounds with scholarships of regulator for this University. 25.5% of our 5,564 full-time UK and up to £5,000, costing £178k in total, EU undergraduate entrants in 2019. to supplement the Postgraduate Our statutes define the object of We also paid a further £5.5m to Masters’ Loans now available from the University as ‘for the public support 3,082 undergraduates the Student Loans Company. benefit, to advance education, continuing their studies. The learning and research’. Public 2019–20 UK and EU undergraduate We alert all prospective and benefit is embedded in our Vision financial support of £7.9m for a total current students to the financial and Strategy. The University takes of 4,500 students represents a support opportunities, through our seriously its commitment to ensure decrease of £324k compared to website, brochures, talks, that it satisfies the Charity 2018-19, primarily due to the workshops, mail shots, e-mail, Commission’s public benefit test phasing out of the high value social media, and plasma screen that there be identifiable benefits Promise Scholarship Scheme as reminders throughout the year. and that the opportunity to benefit well as the Access Scholarship must not be unreasonably Scheme. These schemes were During 2019–20 we awarded more than 9,500 undergraduate and postgraduate degrees. We are the largest research university in the North East. During the calendar year 2019 our academic colleagues published 5,607 research articles, books, book chapters and conference proceedings, a slight decrease from 5,760 in 2018. Our total research income in 2019–20 was £97.7m, despite the suspension of much of our research during the Covid-19 pandemic.
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The University
To support our charitable work, we The Charities (Protection and Social We expect that useful knowledge received £8.1m in philanthropic Investment) Act (2016) requires acquired through research will be donations and legacies during charities to state the approach disseminated to the public and 2019–20. In addition, £1.9m of our taken in fundraising. We seek, others able to benefit from such research activity was funded steward and accept benefactions in research. We normally expect that through philanthropy. We receive support of its charitable objective. any private (non-charitable) benefit funding from a wide range of We do so under the leadership of will be legitimately incidental to the benefactors, based in the UK and the Director of Advancement. We achievement of our charitable aims overseas, including many of our partnered with Rux Burton for public benefit. The terms and alumni and we are grateful for their Associates for some of our conditions of all externally funded support. In 2019–20, our telephone fundraising and Bluefrog research activity are assessed prior community of donors made valued for direct mail. In our fundraising to acceptance in terms of the contributions for the benefit of activities we follow the Principles of public benefit test for charitable student support, enterprise and Practice for Fundraising purpose. entrepreneurship, medical and Professionals at Educational non-medical research, and campus Institutions approved by the More information on our work and development. We thank them for Council for Advancement and the way it fulfils our charitable their commitments and continue to Support of Education’s Board of purpose is included in this report build relationships with individuals Trustees in July 2014. This sets out and on our website ncl.ac.uk. and organisations who resonate ethical principles of personal with the values and vision of the integrity, confidentiality and public University. trust. We complied with these standards in 2019–20.
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The University
Our Value Creation Model
We exist for the public benefit to advance education, learning and research. In this section, we use a value creation model to describe how we create and sustain value for our many stakeholders.
Inputs How we create value
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The University
Aspirational Outputs The value shared
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The University
Materiality and risk
This section (pages 20-23) describes our approach to risk management, our key risks and opportunities and how we seek to manage them
Like all organisations, we are affected by a large number of different risks that could have a material impact on our ability to create value over time. Although some of the risk factors are macroeconomic and likely to affect the performance of the higher education sector as a whole, others are particular to us and to our stakeholders. In line with Integrated Reporting guidance, our approach to materiality is driven by the views of our stakeholders, both internal and external. Risk cannot be eliminated entirely and our approach is to be risk aware rather than risk averse. Taking risks is part of our normal business process, and effective risk management is key to ensuring that we achieve our strategic objectives. We regard effective risk management to be the systematic identification, evaluation and control of risks that threaten the strategic objectives, service delivery and assets of the University. The systems and procedures that we have put into place will allow the risks we face to be identified and understood so they can be better managed in order to reduce the likelihood of occurrence and the potential impact.
Colleague Engagement and Culture Stakeholders impacted: Students, Colleagues, our local community We have a commitment to our people and to promoting a positive and inclusive culture that encourages our colleagues and students to engage and excel. Industrial action during the academic year caused disruption for our students. Some colleagues remain unhappy regarding pensions, pay, casualisation and workload issues. We continue to review and monitor the situation and seek to engage positively with colleagues on key issues.
Risks Opportunities
Challenges to recruit and retain talent to deliver To respond positively to the casualisation agenda the ambition of our vision and strategy. via key policy changes. Colleague satisfaction and engagement may be To address the gender pay gap and other reward affected by issues relating to parity of esteem matters to ensure fairness and consistency. between activities and functions, and perceived inaction around poor behaviours. To work with key stakeholders on the future shape of the USS pension scheme. Constraints on budgets and physical distancing requirements may reduce development options To work on attracting talented people to the for our colleagues, impacting skills and satisfaction. region who can drive implementation of our strategy. Proposed changes to the USS and national pay negotiations may negatively impact colleagues Colleague development work will continue to satisfaction and lead to further industrial action. focus on culture, values and behaviour. Impact on our strategy
We have a clearly articulated and owned People Strategic Enabler and an annual people plan to help us attract and retain the best people regardless of background. It also aims to create a culture of innovation and aspiration. Our Engagement and Place Strategy includes an initiative to embed the values and practices of social justice across the work of the organisation.
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Student Experience Stakeholders impacted: Students, Colleagues, our local community Our students expect a high-quality provision that enables them to succeed and thrive as a result of their studying. Our NSS results suggest some students are not satisfied with the provision received. New consumer laws have led to an increase in complaints, appeals and legal action from students. Supporting student mental health and wellbeing is paramount but has become increasingly difficult due to rising cases. Risks Opportunities
If we do not offer a high quality education we risk Students bring with them a broad range of losing market share. economic, social and environmental benefits to our region. Students may not feel the overall experience is what they expected. Our Graduate Framework aims to ensure that our graduates achieve appropriate graduate level Lost fee income following full or partial employment and shape the societies in which they compensation claims from students. live when they leave us. There is risk that we fail to offer opportunities to We are working to ensure that students from a those from disadvantaged backgrounds. wide range of diverse backgrounds are able to access a university education, thrive and feel a sense of belonging. Impact on our strategy
Our Education Strategy is predicated on a programme of investment into teaching and learning facilities that includes technology enhanced learning and student systems as well as appropriate academic capacity. This is to ensure our students are supported to fulfil their potential. Our Engagement and Place Strategy brings together the civic contribution of our education and research. It also aims to improve the social mobility of people from under-represented and disadvantaged backgrounds.
Threats to research power and intensivity Stakeholders impacted: Students, Colleagues, Our local community, Our partners Through our research we are creative and make discoveries that benefit society and the economy, and we train the next generation of researchers and innovators. Although the UK Government has signalled increased future spending on research, the Covid-19 pandemic has exposed intrinsic weaknesses in the cross-subsidy of research from other university income that might undermine our continued success.
Risks Opportunities
Completion of projects is disrupted. Students and colleagues have been inspired to engage in research by the recent prominence of Research funding available from charities, business science in the public discourse. partners and the EU is lost or markedly reduced. The recent experience of online working will help Our colleagues are unable to devote time to us to grow our research networks and reduce time research in the face of other demands. lost to travel. Recruitment of leading investigators is inhibited by We are well-placed to research the consequences temporary financial constraints. of the Covid-19 pandemic. We are unable to invest in our research Our relatively strong financial position and the infrastructure. potential for further support for research sustainability from UK Government, should allow us to recruit and retain researchers and trainees. Impact on our strategy We retain the ambition of our Research Strategy to grow research power and intensivity but will adjust our anticipated trajectory for growth. We will continue to implement the Priority Actions of the Research Strategy, while supporting new ways of working and communicating for researchers. We are taking steps to maintain our research capacity over the next year.
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The University
UK Political environment Stakeholders impacted: Students, Funders, Regulators, Colleagues The importance of universities and their contribution to the economy is recognised but with increased regulation and intervention the political environment in the UK is changing. The response to the Philip Augar Review of Post-18 Education Funding recommended a cut in tuition fees for all subjects from 2021 entry and replacement of that funding has still not yet been confirmed. A number of other government polices including the positioning of the Office for Students as our regulator, levelling up, social mobility and research concentration are also expected to have an impact upon universities in the coming years. Risks Opportunities
Lost fee income following a reduction in student We will ensure that via membership of various fees would not be replaced in full. national bodies we are acting effectively, and that we are constantly seeking opportunities that allow The University is seen as not offering value for the University and the region’s voice to be heard money for students or taxpayers. on a national scale. The University does not offer opportunities to We will work to improve the social mobility of talented individuals from less privileged people from under-represented and backgrounds. disadvantaged backgrounds by ensuring our education is accessible as widely as possible. The University does not maximise research opportunities and funds available. We will enhance the visibility of our research strengths to support us to recruit and retain researchers and trainees. Impact on our strategy Our Engagement & Place Strategy seeks to develop cross-university academies which equip academic and professional staff with the skills to influence policy debates locally and globally.
Global uncertainty Stakeholders impacted: Students, Colleagues, Global Community, Funders, Regulators Brexit and continued uncertainty around global mobility, research and funding makes planning difficult. There is a need to reassure the global student community that the university’s educational offer and campus safety are strong despite global events outside our control. The Covid-19 pandemic and the rise in cybersecurity attacks on universities, including our own, are two specific critical risks which need to be managed. Risks Opportunities
Loss of income and increased costs resulting from Changes to working and teaching arrangements Covid-19 pandemic. as we learn from the Covid-19 pandemic. Failure to attract and recruit international students We will continue to build collaborative and colleagues due to external factors including a agreements with partners around the world. highly competitive and changing market. We will continue to build national and global Potential worsening of the UK’s relationship with networks and lead the formation of new global China may impact our ability to recruit students. partnerships to promote the North East of England. Reduced research funding for low and middle Potential to use our international branch campuses income countries. for our advantage post Brexit. Loss of IT services for colleagues and students, We will continue to invest in IT hardware, software potentially for an extended period of time, notably and process improvement to protect our networks
Impact on our strategy We do not see Covid-19 as directly changing our Vision and Strategy but it will require up to adapt. How we work. Our Global strategy aims to create an environment in which staff are encouraged to develop global research and educational collaborations. Student mobility in particular needs to develop more virtual opportunities for students. The IT section of our Infrastructure strategic enabler underpins the investment which we have to make in our IT systems and processes, especially to harden our approach to cybersecurity.
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Climate and ecological crises Stakeholders impacted: Students, Colleagues, Partner Organisations, Society – regionally and globally We stand with our students and young people across the world in recognising the climate emergency as the most important challenge of our lifetime. We are committed to achieving net zero carbon within our activities and, through our education and research, to working with our partners on solutions for a net-zero future. As one of the first Universities in the UK to declare a climate emergency and set a net-zero carbon target we aim to be visibly leading the sector.
Risks Opportunities
Failure to meet environmental targets - impacts on National net-zero target will result in funding environment, reputation, recruitment. streams enabling investment in the estate. Risk of climate change impacts e.g. intense Regional partnerships e.g. Net-Zero Newcastle weather events affects financial and environmental allow innovative solutions within City-scale performance and impacts on student experience. projects. Failure to secure funding streams adequate to the We will ensure that our research is addressing scale of the net-zero challenge. real-world problems including climate change. Failure to equip our students with the knowledge Research into energy systems, applied ecology, and skills to make a difference in their futures in behavioural change etc matter more than ever and work and society. the University sector is uniquely placed to lead on this agenda. Impact on our strategy Our Research Strategy aims to transform society through the application of our research. A Sustainable Development Goals Committee has been established to provide leadership in identifying and responding to societal needs including the UNSDG’s. Our environmental management systems identify areas of strategic conflict and well-established governance arrangements and a Sustainability Team is in place to work on projects.
Our approach to risk management Our risk governance arrangements seek to ensure that we have visibility and alignment of principal risks and material issues supported by effective communication. Key to the success of our risk management is collaboration between risk management, sustainability, business continuity, health and safety, finance and internal audit. It is through strong collaboration with both internal and external stakeholders that we are able to identify our principal risks and assess their materiality. As an organisation, we identify risks and assess their material significance through regular discussion of our strategic risk register at Executive Board, Audit, Risk and Assurance Committee and Council. This, and ongoing communication with other stakeholders, has enabled us to identify the material issues that are most likely to affect value creation. We have a Risk Management Adviser, whose remit includes coordination of the risk management strategy, review and maintenance of the strategic risk register, tracking of control measures and ongoing review of risk indicators. Health and safety risks are discussed in more detail on pages 59-60 and treasury risk on page 53.
Role Responsibility
Council Oversight Approves the risk strategy and risk appetite. VC and Executive Ownership Owns and reviews effectiveness of the risk management strategy. Board Members Audit, Risk and Reviews the effectiveness of their approachwith individual risk or Challenge Assurance Committee control owners. Assurance Reports on the effectiveness of the risk management strategy and Internal Audit Testing process. Risk Management Coordination Promotes implementation of the risk management strategy and Adviser Advice maintains and develops systems to support risk management. First line of All colleagues Comply with risk management policies and procedures. defence
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Strategic review
Our Vision and Strategy
The Strategic Review (pages 24-38) describes our Vision and Strategy, maps progress made during 2019-20 and looks ahead to the future.
We exist for the public benefit to advance education, learning and research. Our Vision is to build on this core purpose to address global problems through excellence in education, research and engagement and, in doing so, provide new knowledge and creative solutions that make a positive impact on the society we serve. Our Vision expresses our collective sense of purpose and our aim to work collaboratively to shape brighter futures, grow the economy and champion social justice.
Values
Newcastle University is known for its longstanding commitments to equality, diversity, inclusion, respect and social justice. Our new Vision builds on these core values and identifies three aspirational values that inform everything we do and which guide us as we develop and grow as an institution.
Excellence Enabling our colleagues to realise their twin ambitions of leading the way globally in their areas of research expertise while also providing an outstanding educational experience for our students.
Creativity Being creative and innovative to advance knowledge and engage with society to address global problems.
Impact Working in partnership with governments, industry, the creative and cultural sector and community groups to identify the current and future challenges faced by society and to provide innovative ideas and solutions that make a difference.
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Guiding Principles
Our guiding principles have been identified from the key characteristics of our high-performing academic and professional units. They underpin the objectives of each of our core strategies.
Working together Our aim is to be recognised for effective partnership working; this refers to working together internally – colleagues and students, academic and professional colleagues, across and between disciplinary boundaries and faculties – and externally with our various stakeholders.
Visibly leading We are recognised globally for a number of strengths including Ageing and Health, One Planet, Data, Cities, and Culture and Creative Arts. In all of our activities our aim is to promote and support these existing strengths while facilitating the development of emerging areas of world-leading education and research.
Freedom and Our people, colleagues and students – past, present and future - are at the heart opportunity to succeed of our strategy. Our aim is to support their ambitions and allow them to reach their full potential by providing them with environments and opportunities that inspire excellence, creativity and impact.
Responding to current Our priorities in both education and research will respond more proactively to the and future challenges demand side of the knowledge economy and be guided by the societal challenges facing the world now and in the future.
Core strategies
Underpinning our new Vision and Strategy, we have four interconnected strategies. These cover our core functions of Education and Research and the contexts in which we work to improve the economy, health and social wellbeing and cultural richness of the places in which we operate, and to influence globally.
In the following sections we describe the progress that has been made in 2019–20 against the headings of our core strategies, and we look ahead to the future.
Read more Education for Life Engaging, challenging and supporting students to discover Pages 28-31 and fulfil their potential.
Research for Discovery Catalysing transformative research within and between Pages 32-34 and Impact disciplines.
Engagement and Place Improving the economy, health and social wellbeing and Pages 35-37 for Society cultural richness of the places in which we operate.
Global Being a globally inclusive institution. Pages 38-40
We summarise our progress overall and for specific key indicators using traffic light ratings. The key to these ratings is:
Green: Good – progressing well against our objectives
Yellow: Satisfactory – broadly on track but some issues to address
Amber: Medium Risk – some material issues and risks to be addressed
Red: High Risk – serious concerns
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Strategic review Education for life Engaging, challenging and supporting students to discover and fulfil their potential.
Priorities Provide an outstanding educational experience rooted We have one priority for the in strong disciplines and education we offer, wherever or enhanced by a broad range of however delivered: to provide all experiences. our students with an education for life, that engages, challenges and Encourage and promote supports our students to discover opportunities for multi- and and fulfil their potential both while interdisciplinary encounters. they are studying with us and once they have graduated. To deliver Maintain and promote the this commitment, our strategic academic rigour and stretch of educational aims are to: our programmes. Inspire, challenge, support and care for our students.
Provide an inclusive and international collaborative learning community.
Empower our students to be creative, innovative, enterprising and global in their outlook.
Measuring success
Indicator Target Status Student feedback: the Top quartile of UK HEIs in each of the domains in student feedback from students surveys: NSS, PTES and PRES by 2025/26 with similar targets across all levels of study and at subject level at each campus location Student continuation: Top 10% of UK HEIs for undergraduate continuation and taught continuation and completion postgraduate completion with similar targets to at subject level rates of students who choose Submission rates for research degrees to be at least 80% to study with us regardless of within 4 years for full-time students and 65% within 7 years for background part-time students Graduate destinations: what Top 10% of UK HEIs for graduates progressing to graduate our graduates do and the level employment or further study with similar targets to be proportion in graduate-level reflected at subject level employment Attainment gap: supporting Targets defined in our Access and Participation Plan student success and www.ncl.ac.uk/who-we-are/structure/access-and- progression irrespective of participation/ background
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A key measure of success is our of our education and students, and Each of these national surveys asks performance across a range of therefore did not participate in questions across a number of areas national student experience PTES. The University’s established (e.g. teaching, assessment, learning surveys. In 2020 the University pattern of participation in the resources). The following charts participated in only one of the four Postgraduate Research Experience focus on our comparative major national surveys, the National Survey (PRES) is biennial, and we performance, showing where we Student Survey (NSS). are next due to participate in 2021. are placed against other full service HEIs in terms of the quartile of this The Postgraduate Taught Finally the University, like many of group: Experience Survey (PTES) was due our Russell Group comparators, has to run during the height of the decided to move away from annual Covid-19 emergency (April to June participation in the International 2020) and like many other Student Barometer (ISB) survey and universities Newcastle chose to did not undertake this in 2019-20. prioritise the delivery and support
National Student Survey 2020 2019 Overall Peer group Overall Peer group Question Area score quartile score quartile Overall satisfaction 82 3 85 2 The teaching on my course 83 3 84 2 Learning opportunities 82 3 81 4 Assessment and feedback 64 4 67 4 Academic support 77 4 79 3 Organisation and management 73 3 77 2 Learning resources 88 2 89 1 Learning community 74 3 75 4 Student voice 73 3 73 3
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Strategic review
Progress during the past year increasingly uncertain labour also awaiting the official market. Our cross-faculty modules, confirmation of Benchmarks and A key highlight of the year was the innovation challenges, researcher Performance Indicators for this new opening of our first dedicated training and full-service start-up survey. However in the recent learning and teaching centre at the support all take account of these Guardian league table, the first Newcastle Helix site. needs and have helped to position league table to publish rankings Newcastle University in the Top 5 based on the new data, in the The Centre is named after of UK universities for the turnover sector we ranked 23rd for Career Frederick Douglass, an anti-slavery and levels of investment raised by Prospects, compared to 10th the campaigner – and an escaped our start-up businesses. previous year using 2017 DLHE slave himself – who came to data. Newcastle in 1846 as part of a In terms of career outcomes, there lecture tour and stayed in was a national change from the NSS overall satisfaction fell from Summerhill Grove, immediately Destination of Leavers Survey (6 85% to 82%, placing us 67th among adjacent to the Helix site. months post-graduation) to the full-service universities (34th in Graduate Outcomes Survey (15 2019) and 12th in the Russell Group We celebrated the opening by months post-graduation) because (eighth in 2019). organising a programme of events the survey methodology and exploring the theme of global timelines are significantly different, The downward trend in NSS results social justice. This included our this does not provide us with year at undergraduate level continued, Students’ Union running an on year comparable data. We are with comparative performance extremely successful campaign for declining in four of the eight Black History Month, question areas. Comparative performance did improve for Opportunities to develop graduate Learning Community and Student attributes are threaded through our Voice, two of the three areas that programmes and our co-curricular were a focus of the University’s and extra-curricular provision. 639 action plan to address the issues students from all four of our raised in the 2019 NSS. We are no locations completed our ncl+ award longer placed in the top quartile in in 2018–19 (543 in 2017–18). This any question area, though our award is included in degree strongest performance (in both transcripts and the Higher absolute and comparative terms) Education Achievement Report. A remains Learning Resources. The further 140 students completed NSS results are being reviewed by one of our five ncl+ advanced academic units to generate action awards and 650 students were plans to identify areas of provision nominated for Pride of Newcastle for enhancement, with a continuing University Awards (595 in 2018). focus on the three areas on which Work experience opportunities are we have been concentrating in made available through paid 2019-20 – Learning Community, internships with local businesses Student Voice and Assessment and (184 internships in 2018–19) and Feedback. In addition, the priorities 1,293 students worked part-time on identified in our education strategy campus. The number of students will seek to deliver improvements undertaking a placement year in the educational experience for all increased by 26% to 546, some 10% our students. of our eligible students and 440 ‘We built on the success of students completed a career our existing approaches to Transformative initiatives development module (498 in online assessment, to pivot to 2017–18). In 2019-20 we focused on entirely remote assessment implementation of four Additionally, we believe that it is and marking across the transformative initiatives as essential to promote and support University in spring 2020, in priorities in the delivery of our student and graduate education strategy. entrepreneurship as a viable career response to the Covid-19 option alongside employment. We situation. We are continuing Implementing our technology- are in the business of developing to build on this for the year enhanced learning roadmap so new employers and occupations as ahead - such as continuing that we are recognised as a well as new employees. In addition the comprehensive use of leading university for the use of to those starting and growing technology to support businesses, many students will online submission and campus-based education experience periods of self- marking of assessed work employment through freelance required for the academic We built on the significant success working and the gig economy, and year 2020-21.’ of our existing approaches to online will develop a portfolio of roles to assessment, to pilot diversified and support career resilience in an Professor Suzanne Cholerton expanded opportunities for online PVC Education
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We implemented a new Newcastle campus, in HaSS and institutional Virtual Learning SAgE to ensure parity across all Environment across the University, three faculties. The Doctoral which will provide enhanced College has provided a nexus for functionality and capability to our responses to supporting support our ambitious plans in postgraduate research students technology enhanced learning. during the Covid-19 emergency. Enhancing our approaches to Developing and implementing a supporting students to succeed in new Graduate Framework to their education, and fulfil their support and prepare students to potential shape the societies in which they will live and the professions they We implemented projects to choose to enter review and enhance both the personal tutor system that supports We developed and approved our assessment, and our achievements our students, and the academic new Graduate Framework in this area were recognised in skills support we provide for our (www.ncl.ac.uk/careers/planning/ winning the 2020 International students. Both projects were graduateframework/). Our central eAssessment Award in the Best making significant progress prior to careers, employability and Use of Summative Assessment the Covid-19 emergency, for enterprise offering is being Category. This provided the basis example through agreement of the developed to support delivery of for our successful pivot to entirely first phase of implementation of the new Framework, and we have remote assessment and marking increased academic skills support. started to embed the new across the University in spring We have now taken this work and Framework within our academic 2020, in response to the Covid-19 applied it to the changed situation, programmes. situation. developing a revised, bespoke approach to personal tutoring for Aiming to establish an inter- We are continuing to build on this - disciplinary school to facilitate for example continuing the 2020-21 and significantly revising and expanding our academic study multi- and interdisciplinary comprehensive use of online opportunities submission and marking of skills provision including a assessed work required for particular focus on supporting We approved the establishment of summer 2020, into 2020-21. students to be effective online School X as a new academic school learners. of the University. Significant work We successfully implemented has also been undertaken on the projects to develop innovative new Working to create a Newcastle Doctoral College as a world-class development of the new BASc blended learning programmes in Liberal Arts and Sciences, working Engineering and the Newcastle centre for research training to support our research students towards its launch (now scheduled University Business School, which for September 2022 in light of will launch in 2020-21. This has We developed and launched a Covid-19) as a flagship initiative for played an important role in new Doctoral College website the new school. Staff in and linked developing the institutional (www.ncl.ac.uk/doctoral-college/) to the new School will also provide knowledge and expertise that has to provide a single point of important contributions to allowed us to move swiftly and information for prospective Enrichment Weeks, a new initiative effectively to remote teaching in research students, current research planned for 2020-21 that we will spring 2020, and which now students and research degree offer taught students in Semesters underpins the blended learning supervisors. We have also 1 and 2 of 2020-21. approach the University is adopting established Graduate Schools, with for 2020-21. a physical presence on the
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Strategic review Strategic review Research for discovery and impact Catalysing transformative research within and between disciplines.
Priorities Nurture excellent research and innovation that expands Through a dozen Priority Actions, fundamental knowledge, our University’s Research Strategy addresses societal and global provides a set of tactics to reach needs, supports sustainable our ambition as a world-class, economic growth and research-intensive University. We promotes health and wellbeing. have been making good progress implementing these, which puts us Equip colleagues and students in a stronger position to maintain at all career stages with the research capacity as we emerge skills to contribute to research from the Covid-19 crisis. and development in the academic, commercial, public Our research strategy sets the and voluntary sectors. ambition for growth of people and resources that will allow us to Foster inter-disciplinary deliver our aims to: approaches and partnerships with businesses and external agencies that extend the reach and impact of our research.
Measuring success The indicators and targets below were set prior to the Covid-19 pandemic. Whilst our ambitions remain unchanged we recognise that we will need to recalibrate the timescales for these targets.
Indicator Target Status Research intensivity: winning Grow research income as a percentage of total competitive funding befitting our status income to the average of our peer group over five as a research-intensive institution years Research power: the number of Increase the total number of Teaching and colleagues who are research active and Research academic employment headcount on a producing high quality research trajectory to grow by 20% between 2018 and 2028
Outputs and Impacts: a quality index, Increase the number of PGR entrants (with a focus comprising a basket of indicators, on those funded externally) by 35% by 2024/25 evidencing sustained quality and impact Knowledge Exchange quality index - HEBCIS and of publications and other research KEF metrics evidencing collaboration with external outputs partners for research and skills provision Research culture index, comprising a basket of indices (primarily qualitative)
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We will know that we are achieving our ambition if we Progress during the past year have the characteristics of a typical institution in the Russell Group, the network of world-leading research- Despite the challenges associated with intensive UK universities of which we are a founding Covid-19 we have made substantial progress in member. Trends against Russell Group comparators implementing our research strategy. are shown in the graphs below. Newcastle University Academic Track (NUAcT) We are growing our research community by recruiting and retaining top early career researchers. Through a hugely popular first open call and other targeted calls, we have appointed our first 29 NUAcT Fellows and are supporting their development as future research leaders. In turn, our NUAcT Fellows are joining a multi-disciplinary and collaborative network of researchers across the institution who champion our values and help us to provide a supportive and inclusive research environment for all. We are already celebrating their success in attracting highly competitive and prestigious external funding. Newcastle Centres of Research Excellence (NUCoREs) We are developing a strong portfolio of NUCoREs in areas where we have excellent research that will benefit from growing diverse teams across disciplines. Our NUCoREs help us to tell a visible story about our leading research, enable our researchers to pursue challenge-led research missions and inform our priorities for investment. During 2019-20 we have expanded the portfolio of NUCoREs to include Centres for Ageing and Inequalities, Cancer, Cities, Data, Energy Healthier Lives, Heritage, and Regulatory Science. NU Academies We worked with colleagues across the University to establish two new Newcastle University Academies to give our people the freedom and opportunity to succeed in a changing world through the vibrancy of our research environments. These serve to coordinate provision of career pathways and training, catalyse interactions between academics and professional services staff from diverse backgrounds, and disseminate best practice. The Enterprise Academy, led by the Dean of Innovation & Business, held its first events to bring academics and commercial innovators together with the business development team. The Skills Academy, led by a newly appointed Dean of Research Culture & Strategy, is working with colleagues across all career stages from doctoral trainees to established faculty.
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Strategic review
Notable developments in the past and award of its Foulkes Our REF preparations have year include: Foundation Medal, and being continued where possible and we profiled in Nature Medicine, a anticipate completing a strong The award of £30m from world-leading scientific journal. submission that reflects our Innovate UK to lead a UK collective excellence. The network of Centres that will We enjoyed particular success beginning of a new 7-year REF deliver the Driving the Electric in the Royal Academy of cycle is always an opportunity to Revolution challenge by working Engineering Chairs in Emerging refresh research plans and with numerous companies and Technologies competition, when accelerate the delivery of research. universities to overcome the two of the eight awards were During this period we are likely to hurdles to electrification of made to colleagues at be launching another cluster of transport on road, rail, sea and Newcastle University. Professor NUCoREs, recruiting new air. Our colleagues were Nat Krasnogor, who develops researchers, and being attentive to responsible for the inception of ways to store data in living cells, developing our inclusive and cross- this scheme when their proposal and Professor Ian Metcalfe, who disciplinary research culture. was selected from more than a develops chemical processes hundred submitted to the UK’s for low-carbon energy Industrial Strategy Challenge production, will both benefit Fund wave 3. from multi-million pound funding to support their work The award by the National over the next 10 years. Institute for Health Research (NIHR) of Academic Health Looking ahead Science Centre (AHSC) status to Newcastle Health Innovation We are confident that we can Partners. This is one of only eight restore our trajectory for growing AHSCs nationally, and three research in a post-Covid outside the ‘golden triangle’ of environment, albeit that in the London and Oxbridge, and meantime we will be obliged to recognises the strength of our make careful and fair choices about consortium with NHS and City deployment of resources to ensure Council partners. that as many research staff and students as possible are able to The opening of The Catalyst on continue their research. In this the Helix campus, co-locating regard, we recognise the financial the National Innovation Centres crisis facing many of our charity for Data and for Ageing and the funders and we hope that ‘As we emerge from NIHR Innovation Observatory in universities will benefit from the UK responding to the immediate an iconic building. We were also Government’s promises to secure challenges of Covid-19, we will awarded £3.7m from the our research expertise during the Research England Development pandemic and invest more in also be grasping the new Fund to create a National research in years to come. opportunities and ways of Innovation Centre for Rural working that have presented Enterprise, helping our world- Following a period of significant disruption, it will be more important themselves during the leading experts on the rural pandemic. We start this economy to deliver social and than ever to nurture our research economic benefits by working community in the year ahead. process from a relatively with rural communities and Through initiatives such as the strong financial position, and companies. Skills Academy, we will foster a with a University research positive and supportive research strategy that plays to external Many of our researchers have culture that will help our been recognised through prizes researchers to progress in their drivers that the UK and fellowships of national careers and receive the government has recapitulated academies. Professor Muzlifah development they need. Through in its Research & Development Haniffa is a dermatologist who giving our people the freedom and Roadmap.’ characterises individual human opportunity to succeed, and cells by their genetic fingerprint, combining our diverse research Professor Brian Walker yielding new insights that range excellence, we will continue to PVC Research Strategy and from the development of deliver innovative research that Resources immune system to identifying meets the world’s challenges. the cells in the nose which bind the virus that causes Covid-19. As a result of the pandemic, the Her work has been recognised submission deadline for the this year by Fellowship of the Research Excellence Framework Academy of Medical Sciences (REF) has been delayed from November 2020 to March 2021.
32 Integrated Annual Report 2019-20
Strategic review Engagement and Place for society Improving the economy, health and social wellbeing and cultural richness of the places in which we operate.
Priorities We recognise that these are artificial boundaries and that Our Engagement and Place innovation in engagement Strategy sets our approach to happens across all of these areas. engagement in six key areas: We are therefore committed to cross-sectoral working in the Engaging for economic benefit implementation of the strategy. Engaging for societal benefit (including improving the health and wellbeing of our place) Engaging from local to global Engaging for cultural benefit Engaging with policy and practice Engaging for access and participation
Measuring success Indicator Target Status Inclusive Growth: the University’s Increase our research income while supporting greater contribution to inclusive growth in diversity in R&D investment in the North East the North East and development of a more prosperous economy Increase the number of sustainable start-ups, jobs created and investment raised by our start-up businesses based in and more equitable society the North East Increase the number and percentage of graduates who progress to graduate-level employment in the North East Social Mobility: improving social Increase the proportion of new entrants from low mobility by making our education participation neighbourhoods to achieve the target in our and research as accessible as Access and Participation Plan possible Increase progression to higher education from low participation neighbourhoods and widening participation students from the North East in collaboration with NECOP partners Mutually beneficial partnerships: Targets to measure mutual benefits eg via stakeholder the strength and breadth of our survey, creation of collaborative doctoral awards and mutually beneficial partnerships KTPs, collaborative grant successes etc Increase the number of student placements and volunteering with partners
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Strategic review
Progress during the past year September. This event signposted In May 2020 we announced that colleagues and partners to our we will be leading our third We were a founding partner of the Climate Change Conversation in National Innovation Centre. The newly-established national Civic November. This half day of National Innovation Centre for Rural University Network, to share best conversations, led by our Enterprise (NICRE) will support practice across the sector. The sustainability team, brought enterprise, resilience and Newcastle Agreement is our Civic together colleagues, students and innovation among rural firms and University Agreement which brings external stakeholders to develop unlock the untapped potential of together anchor institutions in our our roadmap to net-zero, Professor rural economies across the UK. city; to deliver projects that respond Hayley Fowler is co-chairing to the needs of local communities. Newcastle Net Zero with the We carried out a strategic review of Leader of Newcastle City Council. engagement across Newcastle To ensure that we are responding Helix site, a landmark 24-acre to local need this is underpinned by We were ranked 11th in the world hybrid city quarter, built for an analysis of the city using the for our impact on society and international tech and sciences United Nations Sustainable leadership in sustainable businesses, the local community Development Goals alongside the development by the THE’s Impact and residents, including the new development of a policy and Rankings. Newcastle is ranked 6th award-winning Catalyst building – evidence hub to ensure that in the world under Sustainable home to the National Innovation research on issues affecting or Development Goal 11 ‘Sustainable Centres for Ageing and Data. communities is fed into policy Cities and Communities’, in making at a local and national level. recognition of the impact of our We continued both to widen research in the area of access to higher education for We redeveloped our Knowledge sustainability, support for the students from underrepresented Exchange Seminar Series that aims culture, arts and heritage sectors, groups and support aspirations to encourage debate and promote and for sustainable practices. more generally across a range of evidence based policy making. The educational and community programme is delivered in Our business development activity settings by working collaboratively partnership with 5 local authorities, included around 30 projects with partners in the region. the North East LEP and Chamber of through Arrow, our innovation Commerce. In 2019-20 we programme that aims to translate delivered two events in person and University research and innovation then moved to a new online format projects into operational business and have delivered four events as innovation programmes and webinars. We launched a call for services. Arrow continued to deliver contributions to the 2020-21 real value to regional SMEs during programme with a new the Covid-19 crisis, when many collaborative approach to projects were able to be delivered designing the sessions with local remotely. Similarly our activity in partners. company creation has thrived, even during lockdown, and we We delivered Newcastle 150 in completed the creation of three partnership with Common Purpose, new high tech and potentially high a leadership programme for young growth companies to benefit the people asking the next generation regional economy. ‘how do we ensure that by 2032 Newcastle is a city where all of its We continued to build our young people can reach their relationships with corporate ‘We adopted a needs-led potential?’ partners. Just one example this approach to working with year is the Advancing Circular cultural partners, We organised workshops for all Economy Research and staff as part of the Staff Experience particularly during the Development Demonstrator project Covid-19 pandemic when Day in October to gain a deeper which brings together university understanding of how support for and big business to position the the sector has been so engagement is viewed across the region as a leader in greatly impacted. In University and created an environmentally friendly innovation response we have Engagement and Place Fund, a for everyday consumer products. small grants scheme supporting developed 'Wor Culture', Funded by the North of Tyne a forum for discussing colleagues to deliver projects that Combined Authority and in enable the benefits of our research partnership with Proctor & Gamble issues relating to the and teaching to be shared beyond this project will identify new more creative sector in the the University. The fund supported sustainable biotechnologies for North East and 14 projects last year. everyday cleaning products, find contribute to shaping its Contributing to our commitment new ways to reduce domestic future.’ to net-zero carbon by 2040, we water consumption, and investigate held a public engagement event on the potential for a new green Professor Jane Robinson our campus to coincide with the technology centre in the North of Dean of Engagement and global climate change strike in Tyne. Place
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We hosted the Natural History Museum’s iconic Diplodocus skeleton cast, Dippy, at the Great North Museum: Hancock between May and October 2019. The exhibition welcomed 304,928 visitors, provided engaging learning experiences for 10,355 school children and entertained 14,851 people through the supporting events programme.
We reviewed Continuing Institute for Social Science, We developed our social media Professional Development and workshops have focused on social presence and are able to provide lifelong learning at Newcastle justice and gender, and on anti- bespoke events to bring together University. Academic units have racism with resources shared via academics and partners in continued throughout the Covid-19 the Institute webpages. We response to community need. We crisis with their lifelong learning continue to support the Council for have established a single point of offer and adapted to new modes of At Risk Academics by funding three contact for enquiries which delivery and engagement. CARA fellows at Newcastle, and provides sign-posting to the first round of Sanctuary colleagues across the institution. Looking ahead scholarships have been awarded for students starting in the 2020-21 In academic year 2020-21 we will In the coming year, we will embed academic year. Plans are underway be undergoing the National the two transformative initiatives for a webinar on social justice in Coordinating Centre for Public identified in our Engagement and FMS with clinicians and public Engagement’s Engage Watermark Place Strategy to create a step- health scholars, and in Accreditation, an award granted to change in how our research and collaboration with the Social Higher Education Institutions in education activities deliver benefit Justice Advisory Group, a set of recognition of their strategic outside of the University. post Covid-19 priorities are being support for public engagement and developed. their commitment to improve the Embedding social justice support offered. Undergoing this This initiative is about the Embedding engagement process will help us to evaluate our priorities and continue to develop embedding of social justice in all Having Engagement and Place as that we do from our research and our engagement practice one of our four core strategies particularly in light of the Covid-19 educational programmes to our demonstrates how central this is to institutional procedures as well as pandemic. In addition we will be our Vision. We continue to build making our first submission to the the ways in which we collaborate internal structures to support with external partners both locally Knowledge Exchange Framework colleagues to undertake (KEF). The aim of the KEF is to and globally. Social justice is about engagement activities. This year we the distribution of society's benefits increase efficiency and have evaluated our pilot training effectiveness in the use of public and burdens and addressing the programme and using learning unfair outcomes that result from funding for knowledge exchange from the evaluation have refined and to further a culture of the coming together of social the offer particularly taking into inequalities and institutions. The continuous improvement in consideration the effects of the universities. This exercise will allow nine themed areas of social justice global pandemic incorporating identified last year are continuing to us to better understand and sessions on meaningful online improve our performance, as well be referred to and the Social engagement. As a result of Justice Advisory Group has as provide businesses and other Covid-19 we have moved all of our users with more information to help continued to bring together engagement events including our academics and practitioners them access our world-class regular Engage and Learn Forum knowledge and expertise. working in these key social justice online. This has seen attendance challenges in order to co-create numbers rise as colleagues and We will continue to deliver on the interventions and solutions. In partners look to adapt their priorities of the Engagement and 2019–20, the Social Justice Fund engagement practice and develop Place strategy, working with our supported 10 collaborative projects new ways of working. partners to build our understanding and a series of Social Justice of the communities and places we Forums have taken place with Our website includes case studies serve, to ensure our teaching and external partners focusing on to demonstrate how partners and research benefits society locally, asylum and migration issues. communities can collaborate with nationally and globally. Internally, in collaboration with the us.
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Strategic review
Global Being a globally inclusive institution.
Priorities To deliver this, our strategic aims include: Our Global Strategy will extend the international impact of our Foster an environment that education and research. places international ambition at the centre of our activities, and which attracts and supports excellent international students and staff from around the world.
Enhance the global visibility and reputation of our research, education and engagement activities so as to extend the impact of our work. Develop the strength, breadth and impact of our mutually beneficial global networks and partnerships, including those which support the global connectivity of our region.
Measuring success
Indicator Target Status Global research profile: the profile of Increase the number / percentage of internationally our internationally excellent and co-authored papers impactful research Maintain (or improve) our market-share of non-UK research grant income
International student community: Increase the diversity of the non-EU student population the diversity and volume of our by growing the number of countries where the student international student community population is >50 from 12 to 20 across all campus locations Grow the number of non-EU students to at least 20% of the overall Newcastle-based population Increase student mobility for UG students and work towards a target of 25% benefiting from an international experience
Global networks: building our Engage at least 5% of the global alumni population in international partnerships, improving key programmes and ensure visibility of diverse alumni colleague mobility and enhancing community alumni engagement Improve colleague mobility through our Global, Skills, Policy and Enterprise academies to grow capacity and raise the global profile of the region Develop our presence in South East Asia with sustainable growth targets and develop our portfolio of strategic partnerships in other regions
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World University Ranking Tables 2016 2017 2018 2019 2020 Leiden 114 105 132 91 78 QS World Ranking 168 161 141 146 152 Times Higher Education 190 175 171 201-250 178
Progress during the past year Through our new Regional Interest We also discussed the Groups, we are harnessing our interconnectedness of the Before the Covid-19 pandemic, we community’s insight, networks and pandemic, its present and future saw very clear evidence for a ambition to develop more economic impact, the strong drive year on year rise in international impactful engagement plans for for social justice as manifested in students. In 2019-20, enrolments specific world regions. In June, we movements including Black Lives were 5% higher at UG level and 25% held a workshop for 25 academic Matter, and how institutions might higher at PGT level. Applications for and professional services adapt for the future. 2020-21 were 20% higher at UG colleagues to co-develop the next level and 50% higher at PGT level, phase of a strategic plan for Encouraging mobility and compared to the same point a year European engagement. international outlook prior. Covid-19 has since jeopardised our recruitment and Building national and Each year, we welcome a diverse mobility targets but we are international networks in our community of students from over developing innovative ways to areas of strength 140 different countries. We support maintain the flows of global talent. more than 200 Erasmus+ student Over the last six months, we have and staff exchange partnerships Enabling international developed a new Framework for with European institutions as well collaboration International Partnership which will as over 50 non-EU student support the continued exchange partnerships. Fundamental to our Global strengthening of our portfolio of Strategy is the nurturing of an global partnerships. The environment that places Framework will help us to ensure international ambition and activities global partnerships are aligned with at the centre of our everyday our research and education thinking and working. We continue priorities, and underpinned by the to see evidence that our University’s core values. collaborations and operations outside of Newcastle allow us to This year, the Times Higher develop partnerships, perspectives, Education has ranked us 11th in the innovations and solutions for world (4th in Europe) for our education and research that we commitment to addressing the could not achieve in Newcastle Sustainable Development Goals alone. In addition to our two (SDGs). We remain the only UK overseas campuses, we share institution to have won two more than 300 collaborative prestigious Global Challenges agreements with universities and Research Fund Hubs focused on institutions around the world and water security and sustainable welcome colleagues from over 90 development and living deltas. The countries. Hubs – and our global network of offices – are enabling us to develop During the past year, we have additional partnerships around signed Memoranda of SDGs, including with private sector Understanding with global organisations such as Mott university partners including the MacDonald in India. University of São Paulo and the University of Pretoria, and with Covid-19 has caused us to private, governmental and temporarily refocus a number of charitable organisations including our institutional partnerships. In July the Public Health Foundation of we delivered a series of leadership India and the Satya Bharti summits with partners including ‘Whilst the Covid-19 Foundation. Our Pro-Vice- University of Pittsburgh, University pandemic has caused us Chancellor (Global) led a of Groningen, IUPUI, UC Davis, to reassess our productive trip to India in Xiamen University, and Monash mechanisms for delivering November to meet with current University. The focus of the and future partners. Other summits was the impact of Covid- our aims, the scale of our significant international delegations 19 on the future of higher education global ambition remains – including a joint conference with in different world regions, and unchanged.’ the University of Pittsburgh focused included consideration of how on Engagement and Place – were remote working can be conducive Professor Richard Davies delayed due to Covid-19. to forming international Pro-Vice-Chancellor Global collaborations. 37
Strategic review
Outgoing and incoming students accelerating the development of Over a quarter of our graduates are grew from 644 in 2018–19 to 786 in virtual exchange opportunities in based outside the UK, in more than 2019–20. Erasmus+ student and order to maintain our provision, 180 different countries across the staff mobility funding grew by 28% expand access to mobility world. In 2019-20, we hosted a to €1,541k in 2019–20. We were programmes amongst all student series of international ‘welcome one of a limited number of UK groups, and meet our sustainability home’ events for recent graduates, universities to mitigate the objectives. We hosted the as well as events for the wider uncertainty caused by Brexit by International Virtual Exchange international community which committing to underwrite the cost Conference in September 2020. focussed on leadership, networking of Erasmus grants in the event of a and professional development. no-deal Brexit, should the Global networks government refuse to do so. The We offered opportunities for We engage our global alumni total number of our students going graduates to connect across the network through inspiring, value- abroad as part of their degree globe via virtual challenges and our led communications and online platform, NCLspark. Over programme grew from 1,191 in opportunities, and we are always 2017-18 to 1,614 in 2018-19. 250 international volunteers gave looking to provide new and their time to support international The ongoing impact of Covid-19 innovative initiatives to build affinity student recruitment, student has prompted the cancellation of and strengthen Newcastle employability, global education and some parts of our mobility portfolio University’s global reputation. reputation building initiatives. in 2020-21. We are now
Our locations Our sites in Malaysia and Singapore continue to build and strengthen. In Autumn 2019, we celebrated ten years of our NUMed operation in Malaysia. More than 350 guests including the university’s faculty, staff, alumni, and students gathered to join in the celebrations. YBhg Datuk Ir Dr Siti Hamisah Tapsir, Director-General of the Ministry of Higher Education Malaysia, said ‘NUMed has contributed significantly to Malaysia and the region as a whole’. In October, we awarded our first joint degrees with the Singapore Institute of Technology. Our teaching in locations outside Newcastle includes:
Students at Location Provision 1 December 2019
Malaysia Undergraduate Medicine (MB BS), a BSc in Biomedical 746 undergraduate Sciences and some professional development provision 1 postgraduate Singapore Programmes in 827 undergraduate in collaboration with marine engineering Singapore Institute of naval architecture Technology offshore engineering mechanical design and manufacturing engineering electrical power engineering chemical engineering
Singapore A growing portfolio of postgraduate programmes 89 postgraduate
London Degree programmes in business-related subjects and 406 undergraduate in collaboration with pathway programmes 152 postgraduate INTO
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Relationships and resources
This section (pages 39-49) identifies the strategic enablers, or inputs, we draw upon to support our core activities of education and research. Our people: students and colleagues
Our ambition is to be recognised as a forward thinking and people centric organisation which attracts outstanding students and colleagues. The people strategic enabler is built on the robust foundations of our guiding principles and core values. The values of equality, diversity and inclusion, social justice and academic freedom encourage excellence and creativity with the desired impact in our colleagues and students. We place a strong focus on colleague development and progression based on the current and future requirements of the University’s vision, goals and aspirations.
Students Participation Plan, prepared for the induction and transition programme Office for Students, sets out our aims to support students at all Our students are the lifeblood of ambition for supporting the success levels to make an effective our University and we put them at and progression of students from transition into university life. Within the heart of everything we do. We under-represented groups. the context of a broad recruitment recruit academically able, highly base, student mental health is a motivated and enthusiastic Our Global Strategy commits us to growing challenge for all students of all ages and growing the number of universities and we are no backgrounds, and provide an international students at all levels exception. This has been education for life, supporting and of study to at least 20% of the exacerbated by Covid. enabling them to be happy and Newcastle-based population. Prior successful and achieve strong to the Covid-19 pandemic, we saw Our Health and Wellbeing Service employment outcomes. clear evidence of a year-on-year is constantly looking at innovative rise in international students. In ways of expanding our provision for We work hard to encourage and 2019-20, enrolments were 5% students. Initiatives include: a focus celebrate diversity in our student higher at UG level and 25% higher on supporting students digitally body. The PARTNERS programme, at PGT level. Applications for through one-to-one online our access route for widening 2020-21 were 20% higher at UG counselling appointments via participation students, celebrated level and 50% higher at PGT level, zoom; the introduction of the Brain 20 years in 2019 and has compared to the same point a year in Hand and SilverCloud online CBT successfully supported over 5,000 prior. Covid-19 has jeopardised platforms; a suite of online and in- students into and through the international and mobility targets, person wellbeing workshops; University and into further study but we are developing innovative partnership work with the Students’ and fulfilling careers. We work in ways to maintain the flows of Union and Sports Centre, and the partnerships with schools and global talent. continuation of the involvement of colleges across the UK to support specialist services such as Rape access to higher education for Our students-first approach Crisis and the local eating disorder students from under-represented extends to the support we offer our service as part of our evening groups, and our Access and students once they arrive with us. counselling service. The development of an enhanced
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At the start of the Covid lockdown Our partnership with NUSU is vital Policy and Resolution Manager to in March, a new Buddy Scheme to delivering an outstanding oversee the implementation of the was implemented by the student experience. We are Phase 2 recommendations and Chaplaincy and Pastoral Support working with the President and provide specialist expertise and team to support our EU and Welfare Officer to review all our support for our students into the international students who were student-facing policies. In January next phase. not able to travel home as a result 2020, a Task and Finish Group, of lockdown. chaired by the Vice-Chancellor, We recognise the importance of was set up to review the effective communication with our A key element of student wellbeing University’s policies for student students, particularly in times of is exercise, and the investment of complaints and the associated great change. In 2020, we have £30m into building a new Sports investigation protocols for student implemented a suite of regular Centre that provides an eight court misconduct including sexual formal and informal student sports hall, state-of-the-art gym, misconduct, harassment and hate communications via email and strength and conditioning suite and crime. Phase 1 of this work was social media, developed a new new exercise studios will enable completed in spring 2020 and, as a Student Home Page and improved many more students to benefit result, there will be more support in our Student App to enable us to from sport and exercise at place for reporters and a more listen to, learn from and adapt our Newcastle, and enable us to retain proactive and time-sensitive approaches and the support we our top 10 ranking in BUCS (British approach to case management. A offer our students. We aim to work Universities and Colleges Sport). key recommendation of the group with students as partners and was to appoint a senior Student co-creators of their own experience.
Total students 2019 2018 Change at 1 December Full-time Part-time Total Total %
Undergraduate Home and EU 18,243 43 18,286 18,127 1% Overseas 2,024 5 2,029 2,016 1% Total 20,267 48 20,315 20,143 1% Postgraduate Home and EU 2,602 1,404 4,006 4,035 - 1% Overseas 2,948 102 3,050 2,515 21% Total 5,550 1,506 7,056 6,550 8% Other locations London 561 11 572 498 15% Malaysia 747 23 770 773 0% Singapore 855 62 917 705 30% Total 2,163 96 2,259 1,976 14%
Total 27,980 1,650 29,630 28,669 3%
‘Student life will inevitably be different in 2020-21 and we look forward to working with them to creatively adapt and make a special learning experience. We want them to get the most out of their time here and will do everything we can to support them to do so safely’ Dr Colin Campbell Executive Director Academic Affairs
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Colleagues the University. 37% of colleagues completed the survey and the Full-time equivalent colleagues results indicated that we are doing were 5,969 (6,596 colleague well in terms of them having trust headcount) as at 31 July 2020, an and confidence in immediate line increase of 168 (2.9%) from 31 July managers and feeling that they are 2019. treated with fairness and respect. There was also positive feedback We implemented the Real Living from colleagues on having the right Wage in August 2019. This led to information to do their job well and an increase in pay for around 700 recommending the University as a colleagues employed in front-line great place to work. Areas that operational roles key to making our show a need for improvements University a safe and welcoming include having the resources to place. We achieved formal complete work effectively, dealing accreditation as a Living Wage with inappropriate behaviour, Employer in November 2019 and feeling able to speak up and join nearly 6,000 responsible challenge the way things are done employers across the UK and Executive Board visibility. committed to pay colleagues fairly and beyond the government Whilst action plans have been minimum wage levels. agreed and implemented to address the findings, this data was ”We responded to the impact of There were two periods of further supplemented by a focused Covid-19 by enabling industrial action during the year. Covid 19 Wellbeing Survey that colleagues to work from home The first period took place between was conducted in Spring 2020, November and December 2019, and implementing a new with over 3,500 responses, 54% of approach to communicating the second period of action took the workforce. This survey enabled place across February and March us to identify and act upon specific and supporting them in this 2020. The action was taken in and short term concerns related to environment. Going forward we relation to two separate disputes, the new context in which we are are changing to a more the first was on pensions and the working and issues as well as blended working style and we second around pay and working establish a longer term task and conditions. We took a proactive finish group to look at the future of will continue to work with our approach to internal blended working in the University. key stakeholders to further communications providing regular explore the optimal ways of updates via multiple Recruitment working for the future.” communication channels including face-to-face events with VC's Recruiting highly talented Adrienne McFarland Town Halls, Pension Roadshows, colleagues locally, nationally and Executive Director Leadership Forum updates and live internationally, through inclusive People Services online Q&A Forums for our recruitment practices is still one of students. We continue to work with our top priorities. We continued to UCEA on the non pay matters. extend our support for international colleagues in response to the In October 2019 we ran a pulse uncertainty caused by the ongoing survey to find out about how Brexit situation, assisting both colleagues feel about working at existing and new EU colleagues
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Relationships and resources with their concerns and queries by Our new e-recruitment solution and introduction of ‘Pause Fridays’ introducing a direct contact route careers site went live in September during April and ‘Quiet Fridays’ from to our specialist immigration 2019 and is now fully embedded May onwards allowed people to advisers as well as hosting into our recruitment processes. This acknowledge and adapt to the seminars run by our legal partners. has significantly reduced our challenge of remote working processing times and enables our environments. Throughout the last year, we teams to process high volume actively engaged with sector recruitment campaigns and further At the same time we introduced consultations regarding the improving our international reach ‘Listening Groups’ to canvas government’s proposal for the UK’s and candidate experience. This colleagues’ views about how the future skills-based immigration system is the first phase of our University could ensure safety and system and contributed to the broader digital transformation wellbeing arrangements were shaping of a system that will enable programme working towards the considered across our diverse the University and UK to remain an creation of a fully integrated suite colleague groups when returning attractive place for talented people of people systems, providing the to campus. to come to live and work. As details organisation with easily accessible Going forward we are changing to a on the new immigration system and better quality data in a more more blended working style which continue to develop we have a consumable format. team of colleagues who continue means a mixture of home working to monitor the changing landscape Covid-19 and on-campus working whilst and provide communication and supporting physical distancing and updates to the wider University. We responded positively to the we will continue to work with our colleague impact by ensuring that, key stakeholders to further explore Once the details of the new where possible, all colleagues were the optimal ways of working for the immigration system are confirmed able to be equipped to work from future. by the Home Office, we aim to run home and a new approach to forums with internal hiring communicating and supporting EDI managers and international colleagues in this environment was Equality, Diversity and Inclusion colleagues to outline the incoming implemented. Additional support (EDI) remain core values for our was promoted via our Employee changes and how these will affect work. This year saw success in the our processes and visa holder Assistance Programme, and retention of our institutional Athena Occupational Health Team. The responsibilities. Swan silver award, and Athena
Notable awards during the year
The Vice-Chancellor and President was elected to Professor Jackie Kay (Professor of Creative Writing) was serve as a member of the Universities UK board from awarded CBE for services to Literature. Dame Teresa 1st August 2019, and as chair of the N8 Research Graham (Lay member of Council) was awarded DBE for Partnership. services to Small Businesses. Our Library achieved national recognition for its Professor Mary Herbert (Professor of Reproductive outstanding contribution to information literacy, by Biology), Professor Muzlifah Haniffa (NIHR Newcastle scooping a prestigious LILAC (information literacy Biomedical Research Centre) and Professor Sophie conference) award. Learning developer Terry Hambleton (Deputy Dean of Translational and Clinical Charlton won the Digital Award for Information Research Institute) were all elected to Fellowship of the Literacy after working with the Library's academic Academy of Medical Sciences. This recognises leading liaison team to produce a portfolio of innovative national figures within biomedical and health sciences, online education resources to enhance information for their outstanding contributions to advancing literacy education. medical science, cutting edge research discoveries, and translating developments into benefits for patients and wider society. Professor Bernard Golding (School of Chemistry) has Dr Lindsey Ferrie (School of Biomedical Sciences), Dr been named winner of the prestigious Robert Lee Fawcett (School of Mathematics and Statistics) and Robinson Award from the Royal Society of Dr Helen Webster (Writing Development Centre) were Chemistry. The research in medicinal chemistry that recognised by the Advance HE National Teaching he initiated at Newcastle University in the 1980’s Fellowship Scheme for their outstanding impact on helped lead to the anticancer drug rucaparib student outcomes and teaching. (Rubraca). UNESCO had renewed the Chair for Cultural Property Professor Muzlifah Haniffa (Institute of Cell and Protection and Peace post, first established in 2016. Molecular Biosciences) was awarded the 2019 Foulkes This was testament to the excellent work carried out Foundation medal as a “rising star” making a significant by Professor Peter Stone OBE and his team. impact on UK biomedical research. Professor Stephen Graham (School of Architecture, Dr Sarah Pickett (Wellcome Trust Career Re-Entry Planning and Landscape) was elected as a Fellow of Fellow), winner of the For Women in Science 2020 the British Academy. award in Life Sciences for her research on the mutation of mitochondria.
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Swan Bronze awards for the School University to proactively identify A review of all existing leadership of History, Classics, and long term resources, skills and and management development Archaeology and the School of capabilities and ensure a people provision will see a new offer Architecture, Planning and resource plan is in place to meet launched in 2021-22. Landscape. those needs. This activity is to create the foundations for the Progress has continued on the We continue to make progress with elements of planning that will be Technicians’ Commitment action our Race Equality Charter work and piloted in 2020-21. This will plan and even in lockdown, along with the appointment of a integrate strategic workforce development was still a priority. new Head of EDI, we have planning more effectively into the The first ever Technician conducted a review of our EDI annual strategy and operational Partnership Conference was resources to ensure we continue to planning activities. planned to take place at Newcastle efficiently deliver on our EDI University in June. After discussions commitments into the future. The University’s focus on culture, with conference sponsors National Through the Covid-19 pandemic, values and behaviour has Technicians Development Centre we worked closely with our EDI continued this year. The Engage (NTDC) and the N8 Research networks and ran colleague and and Aspire project, tasked with Partnership the decision was made student surveys as well as more re-imagining the performance and to host the conference as a one day focused listening exercises, to development review process has virtual event. On the day the event ensure we understood the specific delivered its recommendations to attracted over 300 technicians issues and concerns and could and the new approach will be from various HEI/business sectors provide appropriate support and piloted in this coming year. across the UK. Following feedback adjustments where possible. Supporting work includes the the conference was deemed a development of a behaviour success and there are now plans to Leadership and development framework and a pilot programme host the next Technician of bystander training delivered to Partnership Conference at Whilst University spending on training and development was 104 colleagues. Work is currently Newcastle University in July 2022. underway to appoint an EDI curtailed, due to the restraints Training Lead to roll this and other Accolades related to the imposed on non-discretionary technicians’ work include: spend, utilisation of the apprentice training out across the University. levy continued to grow. Levy Lockdown also provided the two Newcastle University spending in the year almost opportunity for review and design technicians, James Davoll and doubled from the 2018-19 spend of work to be undertaken. Work has Mel Leitch shortlisted for £168,500 to £321,857 across 97 commenced on four aligned Outstanding Technician of the apprentices ranging from Level 2 to workstreams to continue our focus Year at the Times Higher Level 7. 2019-20 saw our first on culture, values and behaviour, Education Awards ceremony cohort programme of which will result in; held in London apprenticeships, with 16 existing colleagues embark on a Level 3 a Leadership programme for all the NTDC approaching us and Business Administration leaders asking James Davoll and Linda apprenticeship, that will provide the Robinson to join their Specialist learning for future in-house cohorts. essentials development for Advisers team to support and leaders and managers new to contribute to the success of the Prior to lockdown, investment in the role NTDC. People Services team saw 12 colleagues undertake a two day a refreshed induction and strategic workforce planning onboarding experience programme delivered by the CIPD. The aim of this was to support the values based recruitment
Members of our EDI team
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Infrastructure
The University’s estate and wider infrastructure supports all aspects of education and research. It is therefore vital that both our physical and virtual learning environments facilitate creativity and engagement between students, colleagues and our external partners.
Estate paves the way for similar The year was however not without collaborative projects that provide its problems and the Dame We continued to invest in our high quality facilities, promote Margaret Barbour Building, which estate through our capital, interdisciplinarity and improve the was scheduled to be completed in improvement and long term efficiency and effectiveness of our March 2020, was delayed firstly by maintenance projects at the start of estate. the financial collapse of the main the year. However, the Covid-19 contractor and then the lockdown pandemic required us to curtail Capital investment in our estate of the construction industry due to much of our planned activity and continued during the year with the Covid-19 crisis. Work has now will require a reconsideration of our £45.8m invested in year. The more recommenced and the project is longer term plans for our estate. open approach to interdisciplinary scheduled to complete in We still intend to provide high working and changes to teaching December 2020. The second quality learning, teaching and and working practices have had an phase of the Henry Daysh Building research facilities fit for a world- influence on the development and project is also delayed by the Covid leading institution but also provide integration of the physical and crisis with the completion date additional benefits to the local virtual estate with a significant shift moving from April 2021 to communities and economy towards collaborative spaces and September 2021. through our regional frameworks. digitally enabled facilities. It is We continue to achieve high expected that this will continue as percentages for the quality and staff and students alike adapt to functional suitability of our estate new ways of working. (88% and 95% respectively) both of which are well above the Russell Main projects delivered or in progress Group benchmark of 79% and 90%. Sports Centre Major extension to existing sports centre on campus The operational estate area at July completed September 2019 2020 was 233,250m2 (net internal The Henry Daysh Refurbishment of Claremont Tower, Claremont area), an increase of 10,100m2 on Building Bridge and Daysh buildings to create a single hub the previous year, primarily due to for many of our social sciences. Phase one the addition of new facilities and completed December 2019, phase two in progress third party adjustments. The floor area is estimated to increase 2 Drummond Home for our interdisciplinary ‘One Planet’ further to 243,550m by July 2021 Building laboratory project completed September 2019 as new buildings and refurbishments are completed. Herschel Lecture Refurbishment of some of our most heavily used Theatres lecture theatres completed September 2019 We continue to improve the quality of our student teaching and Frederick Our first purpose built learning and teaching centre learning facilities and have invested Douglass Centre at the Newcastle Helix site completed in time to in the upgrading and refurbishing host our inaugural Professional Services Conference of teaching rooms, lecture theatres, in July 2019 teaching labs, computer rooms and The Catalyst Home for the National Innovation Centres for Ageing other student facing areas. The and Data at the Newcastle Helix site completed in development of the One Planet October 2019 interdisciplinary laboratory facilities in Drummond Building has been Dame Margaret New learning and teaching centre for medical particularly well received, which Barbour Building sciences. Expected to complete December 2020
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The Covid-19 crisis also impaired Plans are underway for the Library and archives our ability to progress projects potential development of Windsor currently in design, including the Terrace (Hodgkin, Gurney, Fife) In December 2019, our University redevelopment of the Stephenson creating 450 en suite rooms and Library successfully retained its Building and the Sir Terry Farrell 150 rooms with shared bathrooms Customer Services Excellence Building. The lockdown has had a with a planned completion date of Award, achieving ‘outstanding significant impact on the estate’s September 2023. This project is compliance plus’ status in seven operational activities both in seen as an enabler for the key areas of activity. Areas singled locking down and more especially re-development of Castle Leazes out for particular commendation reopening our estate. in line with demand and projected were the strong corporate room stock. commitment to put the customer We are working closely with at the heart of service delivery and Newcastle City Council, Newcastle Our inclusive ResLife programme that staff are encouraged and upon Tyne Hospitals Trust and concluded its first year with high empowered to deliver excellent other key partners to develop the levels of student participation service. We were the first vision and masterplan for the operating across a number of academic library in the country to former Newcastle General Hospital communication platforms. We saw achieve this award (under its site. The masterplan, which will see considerable engagement with a original badging of Chartermark) the site developed as a world- range of events, activities and the and have now held it for 24 leading facility for development educational curriculum around consecutive years. and promotion of healthy ageing, is developing life skills. scheduled for submission for We have completely overhauled outline planning in March 2021. Covid has impacted on the planned the content and structure of the long term maintenance works for Library website to improve Environmental sustainability and in 2019-20. This reduction in accessibility and discoverability of particular our net-zero carbon investment will need to be our services and resources. With target of 2040 remain high on our addressed in future years to ensure over 1.3 million page views per agenda, therefore projects such as that we continue to maintain the year, it was imperative that any the Kingsgate PV project remain on accommodation stock to required changes to the Library webpages programme and potential projects standards. We will also need to were directly informed and driven such as the biofuel CHP continue address the shortfall in the number by customer requirements and the to be an investment priority. of rooms available at Castle Leazes project involved extensive and elsewhere, which has consultation and testing with Student residential necessitated tenders for additional academic staff and students. accommodation beds to cover the shortfall. Working collaboratively with the Marketing Web Development During 2019-20, we directly 2020-21 and 2021/22 are likely to team, the website has successfully managed some 3,930 rooms and be challenging years financially so transitioned to the latest version of had nomination agreements for continued investment in capital and Terminal Four, the University's more than 1,215 rooms across the long term maintenance projects preferred content management city. will be difficult in the short term. system. This strategic investment in the The £4.2m Marris House estate is however a priority in the Our extensive online resources refurbishment project completed longer term to maintain our estate have proved invaluable during the for 2019 intake and has received condition at the high levels we Covid-19 closure period. Particular excellent feedback due to the have achieved and continue to attention has been paid to quality of the living provide high quality learning, enhancing our e-book resources accommodation, value for money teaching and research facilities. which have grown by 70,103 this and location. This has been academic year - this represents a demonstrated by the number of 64% increase in our holdings over students (800+ for 192 rooms) who academic year 2018-19. in their application have made this their first choice. St Mary’s College is being disposed of as it no longer attracts sufficient applications due to location. The sale was due to complete in July 2020 but has been delayed due to funding challenges in the current economic climate. Demolition of Henderson New Hall is now complete and we are exploring options for the Old Hall.
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Relationships and resources
Information Technology Remote working We procured and enabled a Zoom Professional service for video- Student satisfaction with IT Online services and resources have conferencing, expanding the resources remained high at 87.3% been essential to the continuity of existing service and demonstrating in the National Student Survey, the University’s learning, teaching, how well our community adapted placing us third in the Russell research and operational activities. to remote working. In the first week Group in a year when many scores Since we moved to a primarily of March 2020 (before the UK’s fell significantly. remote working model in March pandemic ‘lockdown’), the 2020 due to the global Coronavirus University had 1,377 registered Service ticket volumes decreased pandemic, we have worked hard to Zoom users, but of those, only 119 slightly over the previous year with upgrade, expand and keep stable a were active. By 12 April 2020, the 104,886 tickets in total. In response wide-range of critical and remote IT number of registered users had to on-campus access restrictions, services and to maintain core IT grown to almost 10,000, with just we transitioned our Service Desk support, with many IT staff under 2,700 of them active. The colleagues to remote working to themselves working remotely. purchase of a University site maintain core IT Service Desk Significant deliverables include: licence for Zoom has enabled all support functions. staff and students to set We increased Remote up unlimited time and multi- Major projects Application Service capacity participant meetings. from 440 to 1,100 licences, Our IT Services team managed a enabling remote access to portfolio of over 180 projects, Cyber-security software and resources. delivering significant changes to We engaged Jisc, an external the University’s IT services. We upgraded and expanded partner, to perform a Notable successes in the year Microsoft DirectAccess and comprehensive assessment of the include the migration from on- access to SAP. On average over University’s overall cyber-security premise SAP Human Capital 1,500 concurrent users connect posture. This included subjecting Management to SAP’s Success to this service each weekday. the university to simulated cyber attacks. The team made 117 Factors ‘Software as a Service’ We equipped over 600 offering. Work on our SAP systems recommendations, which we have colleagues with home working grouped into 29 task ‘families’ and also included the migration of equipment, including all-in-one systems from SAP’s older database these tasks are subject to delivery devices, laptops, peripherals and by a new cyber-security product onto the latest S/4HANA Wi-Fi broadband access points. platform. This project was carried programme. out on-time, on-budget and We supported 559 eligible In August 2020, the University was without business interruption. students through the IT Loans the subject of a cyber-security Scheme by providing laptop attack. This resulted in significant We adopted and integrated loans, grants to purchase WiFi HubSpot, a new suite of marketing short term disruption to IT services and access to essential for colleagues, students and automation tools. These have software. proved critical to the refinement of potential applicants. Our IT team was able to carry out the bulk of our business processes and We launched the Student the recovery work without external customer journeys. Windows Virtual Desktop, support. The long-term impact enabling students to access To strengthen our position as a appears to be limited and we will popular Cluster PC software and world-class research-intensive use the lessons learned to further their document stores to institution, we replaced the strengthen our network security. support their on-line studies. systems used to manage research The service can automatically activities, NUProjects went live on Evolution of IT services scale up and down on-demand 1 August 2019. to support up to 3,000 A key focus during the last year has Canvas replaced Blackboard as concurrent sessions. been the Evolution Programme, a Newcastle's Virtual Learning strategic initiative to transform the Services like Microsoft Teams and Environment (VLE) from August shape and management of our IT Zoom showed significant growth 2020. Canvas, the new Cloud- Services. Through collaboration amongst colleagues and students. based ‘Software as a Service’ with colleagues across the They allow users to create online offering, is now being used to build University, we are designing and project spaces, share files, make and deliver our flexible course developing a flexible, world-class individual or group video/audio content, following the successful, IT Service that will act as a key calls and hold informal 'chats' on-time and on-budget move from enabler for the delivery of our within virtual teams. University the previous VLE (provided on- Strategy and Vision. Over 340 active users of Microsoft Teams premise for almost 20 years). colleagues have been involved in almost doubled from 13,000 to activities designed to review and We continue to invest in the 25,000 in 2020-21. In June and improve our IT services and upgrading and refurbishing our July 2020, colleagues and students processes so we can ensure facilities with several capital conducted 87,805 meetings in present and future needs are projects featuring heavily in the Microsoft Teams, including 1-1 explicitly understood and met. 2019-20 work programme. These chats and group calls.
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Relationships and resources
Environmental sustainability
In April 2019, we became one of the first universities in the UK to declare a climate emergency, which has provided the context for a university-wide review of our environmental policy, objectives and targets to accelerate our response to the climate crisis. Our renewed policy commits us to visibly leading on environmental sustainability at local, national and international scales in line with our Vision and Strategy, and we continue to deepen the reach of our Environmental and Energy Management Systems, which are certified against ISO14001 and ISO50001 respectively.
In a year of unforeseen challenges, refined from 100% UK-sourced, We have also engaged with some we continued our work to improve post-consumer waste products, the of our partner Universities, Keele environmental sustainability, CHP will be our first move away University and the University of including the urgent need to from natural gas as the primary fuel Groningen, during visits that respond to the climate emergency. source for a major energy centre focussed on best practice in We have made significant progress on campus. The project is expected sustainability and knowledge across a range of activities, with a to save over 2,500 tonnes of sharing on climate action. focus during lockdown on carbon dioxide per year. Other developing plans to realise measures to reduce carbon Key to all our engagement is opportunities presented by the emissions included the working with and learning from our rapid shift in practices necessitated continuation of our LED lighting students, and in a year where by the Covid-19 pandemic. programme, to date, 20 buildings young people continue to demand have been completed, saving circa global action on the climate crisis, One area where a lasting positive £260k and over 800 tonnes of we have worked to strengthen our environmental impact can be carbon dioxide per year. relationships with the Students’ expected is in emissions arising Union and extend the opportunities from business travel. Prior to the In April 2020, we were ranked 11th for the student voice to be pandemic, we had been working in the world by Times Higher reflected within our plans. on a revised University Travel and Education for our work to address Expenses policy, where one of the the United Nations Sustainable In April 2020, in work informed by key aims is to increase the use of Development Goals (UNSDG’s). the activism of our students, we videoconferencing to reduce the This follows on from adding our made significant progress to align requirement for non-essential signature in December 2019 to the our investments with our action on travel. Due to the pandemic these Environmental Association of climate change, and fully divested behaviours have quickly been Universities and Colleges SDG our endowments funds from fossil adopted and are likely to be Accord, and the formation of a SDG fuel extraction companies. This was sustained – even a 25% reduction Committee to develop our achieved through changes in our against pre-pandemic emissions approach towards tackling the strategy as well as active from this source would equate to UNSDGs across all aspects of our engagement with our fund carbon dioxide reductions of over strategy. managers. Looking ahead, we will 1,900 tonnes per year. continue to review our investment We are working closely with our policy to identify further Renewable energy generation also University community, as well as opportunities to align with our forms a key part of our plan. In partners in the city and beyond to commitments to social and 2019, we began work on our first inform our plans. environmental justice, and net-zero major project to tackle the carbon. decarbonisation of heat – a key In November 2019, we held our challenge on the path to net-zero first Climate Conversation event carbon. bringing together students and colleagues, with partner In 2020, our application to the organisations, to co-create our government Heat Network pathway to net zero carbon Investment Project was successful emissions by 2040. in securing £2.9m of loan funding to support a biofuel Combined Heat and Power (CHP) project. Fuelled Members of our by a renewable liquid biofuel Sustainability team 47
Relationships and resources
Networks and partnerships
In the challenging and uncertain barriers and increasing cooperation research universities to drive times brought about by the and focus, AHSCs seek to combine growth in the Northern Covid-19 pandemic, it is clear that basic and translational health Powerhouse’s green economy. At the civic role of universities will be research, clinical care and Newcastle, we are undertaking more important than ever in education to create world-leading innovative research in hydrogen helping our communities not only improvements in healthcare. technology and, working with survive but thrive as we enter the research partners, last year we economic and social recovery This development will see us developed the first phase of Covid-19. Understanding working with Newcastle Upon Tyne thermodynamically-reversible our place, and working closely with Hospitals NHS Foundation Trust, chemical reactor capable of our partners, is at the heart of what Cumbria, Northumberland, Tyne producing hydrogen as a pure we do as a University. By bringing and Wear NHS Foundation Trust, product stream, removing the need together academics, industry, the Newcastle City Council and AHSN - for the costly separation of the final public sector and citizens, we aim North East and North Cumbria to products. This work formed part of to co-design solutions to the deliver a step-change the N8’s Net Zero North submission challenges we are facing, locally, improvement in the health, wealth to the comprehensive spending nationally and globally. We are also and wellbeing of a population of review. a founding partner in the newly 3.2 million people in the North East formed Civic University Network, of England and North Cumbria. Helping businesses to grow which provides an important focus Reinvigorating Culture Supported by £3.4 million from the for developing and sharing best ERDF, the University’s Arrow practice for universities as drivers As co-chair of the North East programme provides free of social change. Culture Partnership (NECP) we are innovation support for North East supporting our cultural partners in North East Covid-19 Economic SMEs, helping to translate making the case for culture and Response Group University research and innovation tourism as part of the region’s wider projects into operational business Recognising that universities have a economic and community innovation programmes and central role to play in helping the recovery. NECP has developed a services. One such SME is region to recover from the post detailed recovery and resilience Armatrex, who use expanding foam Covid-19 economic downturn, we plan for culture and tourism in the polymers in emergency response have joined forces with our Local region and has lobbied the casts, supports and splints. Enterprise Partnership, Mayoral government to make sure its plans Through Arrow they were able to Authority, Local Authorities and for the cultural sector take account access the University’s expertise to businesses to position the North of regional expertise. The report develop their product so it could be East as a test-bed for innovation- has gained national attention from deployed at the point of care, as led recovery. The North East regions elsewhere in the country as well as remaining robust during Covid-19 Economic Response they seek to reinvigorate the sector emergency transit. Group has produced a staged in the wake of the pandemic. economic recovery plan for the We also provide support for Meanwhile, during lockdown the North East, aimed at stimulating a businesses through Northern University’s Engagement Team greener, more productive and more Accelerator, a partnership between facilitated ‘Wor Culture’, a forum for inclusive economy through Newcastle, Durham, Northumbria cultural organisations to come investment in energy and and Sunderland Universities. The together to share their ideas and to environmental industries, life aim is to bring together academics help ensure the survival of the sciences and digital technologies, and business leaders with funders region’s vitally-important cultural and by supporting people to find to form sustainable businesses that industries post Covid-19. jobs and develop their skills. create more and better jobs. In the Net Zero North last year, we have supported the Partnering to improve healthcare creation of seven companies that With the N8 Research Partnership, are creating jobs and attracting In April, we received the exciting which is chaired by our Vice- investment right here in the region. news that Newcastle Health Chancellor, we are part of the We were 4th in the UK for spinouts Innovation Partners (NHIP) has development of Net Zero North. last year as a result of this been designated as one of only This initiative aims to leverage the nationally-recognised regionally- eight NIHR-NHSE/I Academic individual and collective strengths tailored strategy. Health Science Centres (AHSC) in of the North’s eight leading England. Based on breaking down
48 Integrated Annual Report 2019-20
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Global place-based networks Combatting Covid-19 has Effectiveness and necessitated a response on a global scale, and international co-operation has never been financial sustainability more important. At the height of the pandemic, Vice-Chancellor Professor Chris Day hosted a series of summit meetings with Investment in people and Since 2017 we have reduced the our international partners, infrastructure requires us to amount of professional service staff including the University of generate cash flows sufficient to time used in providing transactional Pittsburgh, with whom we are support that investment. activities, partly as a result of founder members of the improvement to IT, process and International Place-based Our aim is to ensure that we have delivery models including the University Network. The aim sufficient financial capacity to introduction of service hubs. This was to share best practice and deliver the University’s Vision and to has enabled investment of staff explore ways in which our protect market-share but in a way time and other resource to non- individual and collective which doesn’t create excessive risk transactional activities which add strengths might be harnessed or potentially prejudice our day to more direct value to our students towards stimulating recovery in day operations. and academic colleagues. For global higher education, as well example our Student Wellbeing as in our cities and regions. Financial sustainability Service has expanded from 52 full time equivalent colleagues in 2015 Alumni and supporters We work with UUK, the Russell to 70 in 2019 and we have also Group and our stakeholders to expanded our Teaching Design As the true scale of Coronavirus ensure there is a clear began to emerge, our generous support for academics, an increase understanding of our funding of 14% since 2017. alumni were quick to step in to structure and the financial and support two emergency funds academic implications of changes Transparency established by the University as to that structure. part of our response to the We seek to ensure that our pandemic. More than £200,000 We ensure we are financially stakeholders have a clear was received within weeks of sustainable by securing sufficient understanding of what we seek to the funds being launched. A funding to deliver our plans. achieve and support our colleagues Covid-19 Emergency Research Specifically, we aim to achieve to make most effective use of Fund provided immediate annual earnings before interest, tax, resources. financial support to enable our depreciation and amortisation researchers to redirect their (adjusted EBITDA) of at least 6% of We publish an annual Value for expertise towards the global income, with a minimum in any one Money report which summarises effort to combat the virus. year of 4%. This will be very activity across the University to Projects included a study to challenging to achieve in the year improve effectiveness and improve our understanding of ahead given the impact of Covid-19 efficiency. the role of nasal cells in children but we remain confident for our In 2019-20 we published tables on and adults in the transmission of long term sustainability. our website detailing how the the virus, which in turn will student fee was spent to provide inform the effectiveness of Effectiveness transparency to students and the measures such as the use of In December 2019 we received the wider sector. Highlights of this data face coverings to protect latest results for the Russell Group are that 64% fees are spent directly patients, hospital workers and benchmarking exercise, this was the on academic salaries or direct the wider community. A second third time that the collection was teaching and student support. The emergency assistance fund is completed here. The exercise remainder of the spend is in indirect providing immediate financial benchmarks University professional costs - premises and computing aid to vulnerable and service support and provides insight mainly and 15% is invested in our disadvantaged students most into how each university is utilising research. affected by the impact of this resource to support its core Covid-19. Bursaries of up to functions of teaching and research. We organise regular briefings for £400 each are available to help For the third time Newcastle are in our recognised trade unions and students with travel expenses, the lowest cost quartile for the more widely with colleagues to basic living costs such as food benchmarking group (with a cost explain our financial position and and medication, and other index of 90 against an average of the challenges which we face. This financial challenges. To date, 98). Two of the main drivers of this has been particularly important almost £8,500 has been are our low rate of outsourcing of during the Covid-19 pandemic and distributed through the student services (the second lowest of the our briefings have been well hardship fund. group) and the relatively low cost attended and received. of our local pension scheme.
49
Financial review
Financial Review
‘The Financial Review (pages Highlights 50-55) analyses our financial performance during the past 2019–20 2018–19 Change year, summarises our financial strategy and the future Income (£m) 544 571 - 5% outlook.
Due to actions taken in Adjusted EBITDA (£m) 57 73 - 22% reaction to the Covid-19 pandemic, we were able to Adjusted EBITDA as % income 10% 13% - 3% deliver a strong EBITDA result and preserve healthy year end Year-end cash balance (£m) cash balances and job Cash and short-term deposits 140 127 + 10% security for colleagues at a Net balance 15 0 n/m time when many other universities were considering Introduction overall income fall however, tuition redundancy programmes. fees rose by 9%, notably through Our key financial sustainability growth in our international We have confidence that our metric (in common with most of postgraduate student numbers, strategy and implementation the sector) is earnings before FRS and our income from philanthropic of tight cost control measures 102 pension adjustments, interest, donations rose by £2.1m. Total will protect the University’s tax, depreciation and amortisation expenditure, excluding pension financial position and enable (Adjusted EBITDA – see Note 28). adjustments, fell 1% in 2019-20 as We focus on this as the best tight cost controls around delivery of the best possible measure of our ability to generate recruitment and non-pay costs experience for students under cash as it is less susceptible than were implemented from March the current conditions.’ total surplus to movements in 2020 to preserve cash balances equity values and changes in and protect the existing staff base. discount rates. It is increasingly the measure of choice for lenders to As part of the review of operations the sector. We aim for Adjusted and future academic viability of the EBITDA to be at least 6% of INTO Newcastle University London income, excluding one-off items. LLP joint venture, we have made an onerous lease provision of Measured against that metric, and £6.0m in relation to the London given the challenges of the premises. See also Note 32 for Covid-19 pandemic, we delivered a subsequent events.. strong result that builds a solid platform to take into 2020-21. Capital additions during the year Adjusted EBITDA was £56.8m were £45.8m of land and buildings (10.4% of income) compared to and £5.2m of equipment and £72.9m (12.8% of income) in infrastructure, with overall spend 2018–19, a year which was impacted significantly by pausing boosted by the £13.1m most of our capital projects in monetisation of our Rubraca March 2020. patents as well as significant capital grants. As a result of the expenditure controls introduced, gross cash Richard Dale Total income fell by 5% from and short term deposit balances Executive Director £570.6m to £544.2m, with the one- increased from £127.2m to £140.3m Finance off items noted above in 2018-19 a and net balances, which include significant factor, along with a 10% the impact of loans and finance fall in research income as much of leases, increased from £0.1m to our on-campus research activity £15.0m. had to be halted. Within that
50 Integrated Annual Report 2019-20
Financial review
These strong results were further and colleagues, Although it will were more severely affected by the enhanced by a non-cash credit of take some years to fully recover, pandemic. £52.9m in relation to the USS our underlying cash trading position pension scheme. This resulted from is strong and we have confidence The overall 9% growth in academic the agreement of the March 2018 that student numbers will recover. fees from £264.5m to £288.2m was valuation in September 2019 and In the longer term, we face underpinned by a 25% increase in reversed much of the £80.2m uncertainties from potential income from international students, charge recorded in 2018-19. The changes to fees and funding for our primarily those on postgraduate financial sustainability of both of students and the potential impact programmes, where student our pension schemes remains a key of Brexit. numbers rose by 21%, along with financial risk for us. Offsetting this continued price increases as we was a £14.6m impairment of our Income repositioned ourselves in the investment in the Newcastle Helix market. Home and EU student site. Total income in 2019–20 was numbers showed a 1% overall £544.2m, decreasing by 5% from increase, delivering a 3% increase in Due to actions taken in reaction to £570.6m in 2018–19, which income. Student numbers also the Covid-19 pandemic, we were included two notable non-recurring increased by 15% at our London site able to deliver a strong EBITDA items from significant additional and by 30% in Singapore, which result and preserve healthy year- capital grants (net benefit £15.2m) contributed to a 4% rise in fees at end cash balances and job security to primarily fund the construction of our overseas campuses, Fees from for colleagues at a time when many the Catalyst building, and gross part-time courses fell by £0.8m other universities were considering receipts from monetisation of our reflecting the impact of Covid-19 redundancy programmes. The Rubraca payments of £23.6m. closures. position in 2020-21 will be Excluding these items, underlying distinctly less healthy as we expect income grew by 2%, despite several Funding body grants increased by to see a significant reduction in the streams being impacted by the 5% from £71.9m to £75.8m, primarily number of international students, Covid-19 pandemic. from increases in HEIF funding, although less severe than we had additional UKRI funding research originally feared and planned for. A key component of this result was activity to support evidence-based We will continue to control a 21% increase in our International policy making and government expenditure and capital investment postgraduate students, contributing support for losses as a result of tightly in the year ahead whilst to an overall 9% increase in tuition Covid-19. As a percentage of seeking to ensure the best and fee income, which at 53% increased income, funding body grants safest experience for our students significantly as a proportion of total increased to 13.9% after a decline in income as other income streams 2018-19.
Our income
51
Financial review
Research income was significantly Expenditure This can be demonstrated by the affected by the Covid-19 pandemic movement in full-time equivalent as many research projects had to Total expenditure, excluding employment numbers throughout halt as access to campus and pension adjustments, in 2019–20 the year, which increased from research facilities was closed and was £531.3m, a decrease of 1% from 5,800 at 31 July 2019 to a high of staff placed on furlough where they £534.6m in 2018–19 resulting 6,028 by 31 March 2020 with a were unable to continue to work. primarily from a policy decision to subsequent fall through natural Overall, research income fell from pause non-essential non-pay attrition to 5,966 by 31 July 2020, a £108.7m in 2018-19 to £97.7m, a expenditure in reaction to the year-on-year increase of 3%. decrease of 10% felt across all Covid-19 pandemic. sources of research income. Non-academic salaries were Funding of employment related Underlying employment costs increased by 1.8% from 1 August activity grew by 3% from £51.9m to increased by 7% from £290.5m to 2019 with higher increases for £53.6m, although contribution to £309.7m, as the University lower paid colleagues arising from overheads fell 6% from £19.8m to continued to invest in new and implementation of the Real Living £18.7m. Most significantly, funding existing colleagues, and Wage. USS employer contributions of non-pay activity fell for the represented 57.8% of underlying increased from 18.0% to 19.5% and second consecutive year income (2018–19: 55.2%). The RBP employer contributions decreasing 31% to £25.5m from University’s target for this measure increased from 13.25% to 17.25% £36.9m the previous year as is 55%, which has been achieved from 1 April 2019. laboratories were closed, capital consistently in recent years, Accrued holiday pay increased purchases were deferred and travel however the Covid-19 impact on significantly during the year due to and consumable costs ceased. underlying income resulted in the colleagues having to cancel Across a 12 month period to July ratio increasing as we sought to holidays because of Covid-19 2020, applications for new grants protect the existing staff base. travel restrictions. increased significantly in volume, although value of new awards, which is a lead indicator for future Reported employment costs comprise: 2019–20 2018–19 income, decreased slightly from £m £m £116.1m to £113.1m. Underlying costs 309.7 290.5 As expected, the University realised Increase in accrued holiday pay 4.7 0.6 a significant fall in other operating Severance costs 0.7 0.8 income from £117.0m to £72.5m due Share of Rubraca monetisation proceeds 0.0 8.6 to last year’s one off benefits of USS pension cost adjustment (52.9) 80.2 £23.6 gross receipts from Local scheme pension cost adjustment 7.7 7.1 monetisation of our Rubraca patents and a net £12.8m reduction Reported costs 269.9 387.8 in capital grants. Another impact of the Covid-19 pandemic was a Underlying income (see note 28) 536.1 526.1 reduction in our residences, Underlying costs as % of income 58% 55% catering and conferences income that decreased by 32% and included £5m of refunds to students leaving accommodation facilities early. The University also claimed £2.1m through utilisation of the Coronavirus Job Retention
Scheme in order to protect our staff in areas that were unable to continue operating during the pandemic. Donations and endowments increased by £2.1m from £6.0m to £8.1m, mainly due to a single unrestricted donation of £3.3m.
52 Integrated Annual Report 2019-20
Financial review
Strong cost control measures were Other items This liability was impacted by the implemented restricting all non- agreement during the year of a essential non-pay expenditure from Depreciation increased by 11% from new statement of contributions as a March 2020, resulting in a 11% £28.5m to £31.6m, reflecting result of the 31 March 2018 decrease in other operating costs continued investment in estate, valuation. This valuation reported a from £199.4m in 2018-19 to £177.0m equipment and infrastructure as technical provisions deficit of in 2019-20 with most categories of well as the full year impact of £3.6bn resulting in a 10 year deficit spend affected. significant capital spend in 2018-19. recovery plan with payments of 2% of relevant salary for two years All building and estates related The market value of our from 1 October 2019 followed by costs fell year-on-year as investments continued to grow, payments of 8% for the following colleagues and students vacated increasing by £5.8m over the eight years. This replaced the campus due to the pandemic, with financial year, Both our equity March 2017 valuation which had building maintenance falling from investment managers performed shown a deficit of £7.5bn with a £13.5m to £7.5m and utilities significantly better than benchmark 17-year deficit recovery plan with expenditure falling by 12% to £9.6m. during the year. payments of 5% of relevant salary. For similar reasons, year-on-year This resulted in a reduction in the consumables and laboratory The results of our joint ventures and associates were significantly balance sheet provision from expenditure fell by a third, which £125.1m to £74.2m. has been reflected in a fall in impacted by a £14.6m impairment research income, and equipment to our investment in Newcastle The next valuation will be as at purchases and maintenance costs Science Central Management LLP, 31 March 2020 and initial decreased by 28%. In addition, staff which oversees the sale and lease consultations have started on the related expenses fell from £26.5m of land on the Newcastle Helix site. technical provisions assumptions to to £18.1m with significant reductions This reflects an updated valuation be used for that valuation, together in travel and expenses and of the site in light of the latest site with other factors, which will affect conference costs as a result of the masterplan and expected sale the basis for the valuation. Although lockdown. proceeds. INTO Newcastle there will probably be a significant University had a strong year with reduction in liabilities from recent Within our 2019-20 Access and 25% growth in student volumes mortality experience, this will be Participation Plan, we committed although the second half of the more than offset by further expenditure of £16.5m to widening year was impacted by the weakening of the discount rate to participation at the University, pandemic. reflect recent market conditions. providing equality of opportunity Pensions More details are provided in Note across the entire student lifecycle, 29. The FRS 102 valuation, which is and ensuring continued As the USS is a multi-employer documented in Note 29, was commitment to improving fair scheme with no basis to identify impacted by an unexpected and access to higher education in accurately our share of the assets short-lived spike in corporate bond general. We spent £17.9m in and liabilities, we do not make a yields, which led to a reduction in 2019-20 (see Note 31), including balance sheet provision for our the deficit as measured on that £0.4m funded by the OfS Premium share of the deficit. However, as basis. to support successful student required by FRS 102, we make a outcomes, £0.3m funded by the balance sheet provision for the The most recent triennial valuation OfS Disabled students’ premium, discounted future obligation to of the RBP was at 1 August 2019. and £0.5m access activity funded make deficit recovery payments. This recorded a surplus of £18.0m by external partners. relative to the technical provisions (7% of liabilities), which reflects outstanding investment Our expenditure management in the past few years as well as recent mortality experience. The cost of future accrual is higher than current contributions and we expect to start consultations with impacted colleagues on how to address this increase. As required by FRS 102, employment costs were increased by £7.7m in 2019-20 (2018-19 £7.1m), net interest costs were increased by £3.6m (2018–19 £2.3m) and an actuarial loss of £8.1m (2018-19 £19.2m) was recognised to reflect the FRS 102 valuation of the scheme. The actuarial loss reflects a reduction in the discount rate from 2.1% to 1.55%.
53
Financial review
We receive monthly performance reports from all our managers and Finance Committee meets formally with our active managers once a
year to review progress. Our ethical investment policy provides a mechanism whereby students or colleagues can challenge how we invest our funds and also requires our investment managers to subscribe to the United Nations Principles for Responsible Investment (UNPRI). We give priority to investment managers who preferentially invest in progressive companies that are working towards low carbon Balance sheet short-term deposit balances solutions. Following extensive Capital additions during the year increased from £127.2m to £140.3m market research, we have agreed were £51.0m (2018–19 £133.8m), and net balances, which include that all future selection processes comprising £45.8m of land and the impact of borrowing activity for investment managers will buildings and £5.2m of equipment and leases, increased from £0.1m to require an exclusion on investment and infrastructure. All capital £15.0m. in fossil fuel extracting companies. expenditure projects were halted Outlook and going concern as the impact of the Covid-19 Treasury pandemic became clear with work At 31 July 2020, we had £44.1m Short-term subsequently recommencing only short-term liquid deposits (2019: for safety critical and existing work It is clear that the Covid-19 £75.3m). The level of deposits in progress schemes after review, pandemic will continue to have a fluctuates throughout the year with as well as wholly funded research significant influence on both materially higher balances between equipment. financial and operational September and December and performance in 2020-21. Land and buildings expenditure between May and July due to the within 2019-20 included: timing of tuition fees and OfS and Expectations of our financial Research England grants. Although performance for 2020-21 are major redevelopment of the this does not create short-term understandably reduced from a Henry Daysh and Dame liquidity issues, it does restrict our normal operating year although we Margaret Barbour buildings, with flexibility on optimising investment are cautiously optimistic that our both projects recommencing returns. Our investments are financial results will be reasonable. after enforced lockdown controlled by our counterparty policy, which is agreed by Finance Home and EU student recruitment completion of the Catalyst Committee with advice from in autumn 2020 has been broadly building and continued spend to brokers. We only place our money on target (and slightly higher than improve sport centre facilities with banks and building societies last year). Non-EU student which we consider to be secure, recruitment is expected to be about initial costs towards major based on external benchmarks. We 20% lower than last year. This will redevelopment of the regularly review our investments have a material adverse impact on Stevenson building and take rapid action if we believe fee income in 2020-21, although In September 2019, the University there is any deterioration in risk. much less than we had feared earlier in 2020. disposed of the Leazes Terrace Despite in year volatility, at 31 July student accommodation building 2020, we had £89.3m of We will receive additional for £7.25m. endowment related investments Government support through increased grants from OfS and As at 31 July 2020, there were (2019: £83.5m). We seek to invest UKRI and the University £23.9m of contracted capital 80% of our endowment funds in Development Trust has agreed commitments (2018: £59.9m). equities and 20% in other asset Authorised but not yet contracted classes. For the bulk of 2019–20, additional funding in 2020-21. we used Baillie Gifford and Royal projects totalled £91.9m (2019: Recovery of our research income is £26.2m), an increase which reflects London Asset Management (active equity managers) and Royal expected to take some time to the pause on capital projects during achieve, although the impact of this the year. London and Aviva (ethical alternative asset funds) to manage on EBITDA and surplus is limited and UKRI and some other funders As a result of measures taken to our investments. During the year, are making additional support preserve cash balances from March investments held by Majedie and possible. 2020 onwards, gross cash and M&G were transferred to Royal London Asset Management.
54 Integrated Annual Report 2019-20
Financial review
Continuing losses of income in At this stage we are confident that regular reviews of performance student residences, commercial our strategy and implementation of using a number of key activities and, in particular, tight cost control measures will performance indicators in areas hospitality and catering services are protect our financial position and that are relevant to institutional also expected although we are able enable delivery of the best possible sustainability to take some actions to mitigate experience for students under the losses, for example through use of current conditions. an agreed long-term target the Coronavirus Job Retention adjusted EBITDA margin of 6% of Scheme and successor schemes. Going concern income to reflect the need to generate cash to manage the The move to greater levels of Council confirms that it has University now and in the future on-line teaching and remote reasonable expectation that the working will require additional IT University has adequate resources regular review of the University’s expenditure and the recent cyber to continue in operation for the strategic risk register by Audit, security incident has shown the foreseeable future. For this reason, Risk and Assurance Committee need for further investment in our it continues to adopt the going security systems and processes. concern basis for preparing the Longer-term financial statements. In reaching Creation of a Covid secure We remain concerned about the environment on the campus has this conclusion, Council has considered: impact of Brexit, the continued also necessitated additional volatility in international student expenditure. the impact of actions taken in recruitment and potential changes We will continue to maintain tight spring 2020 to minimise to fees and funding for home control of all areas of expenditure expenditure to enhance the undergraduate students. Work although there is a strong desire, University’s cash reserves continues to understand and should financial circumstances mitigate all these threats. its approval of a robust and allow, to reinstate some of the Despite the challenges, we believe development activities which have prudent baseline budget which would ensure continued the next few years also present us been paused as a result of the with significant opportunity. We pandemic. financial strength and strong year-end cash balances have well developed plans for the Our cash position is strong, partly future to invest in academic due to the Student Loan Company the impact of past and forecast colleagues, student experience, accelerating £34m of funding which future financial performance on research and IT infrastructure and we would have expected to receive banking covenants new buildings. Opportunities to in February 2021 to October 2020 grow activity in social sciences, student recruitment and engineering and medical sciences but also recognising work last year registration results for 2020 and to improve our cash position and are limited by estates constraints the potential availability of but building projects are underway the better than feared levels of government financial support student recruitment. We were well to address these constraints. within the current covenants for our updated financial forecasts for The key strategic risks which may bank loan in 2019-20 and our 2020-21 and 2021-22 which impact longer term financial forecasts show that this will remain show the outturn in 2020-21 will sustainability are: the case in 2020-21 and beyond. be better than budget failure to react effectively to the Our key short-term risks are: the robust measures in place to ongoing Covid-19 pandemic monitor and manage cash student withdrawals through balances failure to maintain a financially failure to deliver a high quality sustainable pensions provision experience or a result of wider consideration of the key financial national and international risks including stress testing failure to respond effectively to restrictions on activity. Some their cumulative impact on the the decision to leave the mitigation of this will be University’s cash balances European Union which could available through the impact student recruitment, Government’s support scheme Council has reviewed the research income and colleague for sustaining research activity sustainability of the University and recruitment and retention is satisfied that the strategies, plans students vacating University and processes in place will help the failure to meet student owned or nominated University move towards the recruitment targets accommodation, either in achievement of its strategy. In response to concerns over their particular, it is satisfied that failure to maintain the estate as student experience or because academic strategies take account functionally suitable and have an of wider lockdown measures of the environment in which the appropriate information strategy University is operating as an and control of data the potential impact of further institution and are financially lockdowns on our commercial sustainable. The following are the failure to ensure proper conduct income and our ability to key elements that give Council of business and be able to maintain research activity assurance in this area: respond to severe business disruption events 55
Corporate governance
Corporate Governance Statement
The Corporate Governance Statement (pages 56-61) provides an overview of the governance of the University, processes for ensuring the student voice is heard and for management of risk, Council’s responsibilities and the arrangements to ensure sound internal controls are in place. As Chair of Council, I take a lead role in ensuring good governance is exercised by the University.
Paul Walker Chair of Council and Pro-Chancellor
Newcastle University conducts its Any enquiries about the Senate business in accordance with the constitution and governance of the seven principles identified by the University should be addressed to Senate is the academic authority of Committee on Standards in Public the Registrar. The University the University and draws its Life (selflessness, integrity, maintains a Register of Interests of membership predominantly from objectivity, accountability, Members of Council and Senior the academic staff and the openness, honesty and leadership), Officers, which may be consulted students of the institution. Its role is and with the guidance to by arrangement with the Registrar. to direct and regulate the teaching universities from the Committee of and research work of the University Chairs. University. Senate met six times during 2019–20. The University is an independent corporation whose legal status Court derives from the Universities of Court is not part of the University’s Durham and Newcastle upon Tyne day-to-day decision-making Act 1963 which, with its supporting processes, but plays an important statutes and schedules, sets out and influential role on behalf of the the University’s objectives, powers University’s stakeholders. Its and framework of governance. The membership is representative of statutes require the University to the University, the local community have a number of separate bodies, and other organisations with an each with clearly defined functions interest in the work of the and responsibilities, to oversee and University. It meets twice a year to manage its activities. Academic receive a report from the Vice- Board is a meeting of all academic Chancellor and President and to and related staff and receives an discuss any matters relevant to the annual report from the Vice- interests and wellbeing of the Chancellor and President. I am proud to take on this University. Convocation is a meeting of the role, especially when I think alumni and is the body that that this was the only Council appoints the Chancellor. University in the United Council is the supreme governing We were delighted that in October Kingdom to give Dr Martin body, responsible for the finance, 2019 we appointed the Luther King an honorary property, investments and general distinguished poet, artist and video degree during his lifetime, business of the University, and for film-maker, Imtiaz Dharker as our and that he came and stood setting the general strategic new Chancellor, a role she direction of the institution. It is also commenced in January 2020. in this place to receive it.’ responsible for the University’s Imtiaz Dharker system of internal control and for The Registrar acts as secretary of reviewing its effectiveness, Council and Senate. Chancellor of Newcastle University. Photograph by Ayesha Dharker including the appropriateness of its arrangements for risk management and value for money.
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Corporate governance
It keeps under regular review the Jonathan Glass 1 Audit, Risk and Assurance performance of the University and Teresa Graham 1 Committee makes use of key performance Stephen Lightley (Treasurer) 1 indicators to assist in this task. A Jeff McIntosh 1 Audit, Risk and Assurance statement of Council’s primary Dr Sara Maioli 2 Committee is a committee of responsibilities is provided on page Claire Morgan 1 Council, comprising three lay 62. Heidi Mottram (Vice-Chair) 1 members of Council and additional Dianne Nelmes 1 lay members. It meets five times Council undertakes regular reviews Professor Sir Mike Rawlins 1 each year with the University’s of its effectiveness using guidance Angela Russell 1 internal auditors (and, where given in The Higher Education Professor Julie Sanders 2 relevant, external auditors) in Code of Governance published by Nitin Shukla1 attendance. The Committee the Committee of University Chairs Katie Smyth 3 reviews the University’s strategic in December 2018. A review of Angela Woodburn 1 risk management and the governance was conducted by Vicky Wright 1 effectiveness of internal control Advance HE during 2018-19. This systems by considering detailed generally gave a positive reports together with assessment of the University’s 1 Lay member recommendations for governance structures and 2 Employee of the University improvement, management operations together with a series of 3 Student representative responses and implementation recommendations to make further plans. As part of its annual opinion it improvements including a modest Council met six times during also gives assurance about the reduction to the size of Council, 2019–20. Our normal joint meeting management and quality of data to improving the induction process for with Senate was cancelled the OfS, Higher Education Statistics new members of Council and because of the pandemic. Amongst Agency and other public bodies. strengthening the student voice in other matters and, in consultation governance. A number of these with Senate, Council agreed to: Members during 2019–20 were: recommendations were an update of the Education Jonathan Glass (Chair) (lay member implemented immediately and Strategy, which includes of Council) most others during 2019-20 but resources for a new virtual David Bird (lay member of Council) some required changes to the learning platform and increase David Carroll (lay member – until statutes. These changes were use of blended learning – this January 2020) approved by the Privy Council in was in October 2019 and helped Dr Mike Goodwin (lay member – July 2020. provide some greater resilience from March 2020) The University complies with all for the pandemic Angela Woodburn (lay member of seven primary elements in the Council) seek a Race Equality Charter code and the compulsory Finance Committee elements. Members of Council award as a way of focusing on subscribe to the Office for and improving our approaches to race equality Finance Committee considers and Students’ Public Interest recommends to Council the Governance Principles. actions to reduce the gender financial strategy for the University pay gap including a review of and advises on investments, Council has a majority of members determines the level of funding to from outside the University (lay the academic promotions process be made available to support the members) including three lay annual budget allocations, officers; Chair, a Vice-Chair and modifications to our strategic approves the accounting policies Treasurer. Members also include risk register in light of the and considers the financial staff of the University and the pandemic and actions necessary statements. It also has overall student body. None of the lay to manage the ongoing responsibility for ensuring the members receives any payment, provision of services appropriate management of apart from reimbursed expenses, taxation within the University. for the work they do for the take steps to improve our University. cybersecurity Members during 2019–20 were: Members of Council during Much of the detailed work is routed Stephen Lightley (Chair) 2019–20 were: through committees of Council. (lay member of Council) The following five committees are Professor Chris Day Paul Walker (Chair) 1 formally constituted as committees Jeff McIntosh Professor Caroline Austin 2 of Council with written terms of (lay member of Council) Professor Catherine Biggs 2 reference and specified Angela Russell David Bird 1 membership, including a significant (lay member of Council) Tom Caulker 1 proportion of lay members. The Professor Julie Sanders Pablo Charro de la Fuente 3 decisions of these committees are Katie Smyth Linda Conlon 1 reported to Council and, where (President of the Students’ Union) Professor Nicola Curtin 2 relevant, Senate. Paul Walker (Chair of Council) Professor Chris Day 2 2 Dr Stacy Gillis
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Corporate governance
Nominations Committee University/Students’ Union responsible for assuring the quality Partnership Committee and accuracy of University data Nominations Committee makes provided to the OfS, The Higher recommendations to Council in The University and the Students’ Education Statistics Agency HESA respect of the appointment of lay Union have a joint Partnership and other public bodies. As chief members of Council, the offices of Committee, constituted as a sub- executive of the University, the Chair and Vice-Chair of Council, committee of Council, chaired by a Vice-Chancellor and President Honorary Treasurer and members lay member of Council, which exercises considerable influence of the committees of Council. meets regularly to discuss matters upon the development of Members during 2019–20 were: of common interest. This institutional strategy, the committee also discharges the Paul Walker (Chair) (Chair of identification and planning of new University’s obligations with developments, and shaping of the Council) regards to the Students’ Union institutional ethos. The Deputy Professor Chris Day under the terms of the Education Vice-Chancellor, Pro-Vice- Heidi Mottram (Vice-Chair of Act 1994 on behalf of Council. Council Chancellors and senior administrative officers all contribute Dianne Nelmes (lay member of Executive Board in various ways to these aspects of Council) Fiona O’Connor (lay member) Executive Board is the senior the work, but the ultimate responsibility for what is done rests Professor Julie Sanders management team of the Sarah Stewart (lay member) University and is formally with Council. Rob Williamson (lay member) designated as a joint committee of Council and Senate. It keeps under Members of Executive Board Council has approved a strategy for review the University’s strategy and during 2019–20 were: the appointment of new lay makes recommendations on the Professor Chris Day members which Nominations development of the strategy to (Vice-Chancellor and President) Committee implements on its Senate and Council. It develops behalf. The intention is to appoint and regularly reviews the activities, Professor Julie Sanders high-calibre individuals with assesses the risks related to the (Deputy Vice-Chancellor) specific skills that are of value to delivery of these and ensures that Professor David Burn (Pro-Vice- the University and a commitment to appropriate measures are in place Chancellor – Medical Sciences) the principles and future success of to assure the financial sustainability Colin Campbell (Executive Director the University. Prior engagement of the University. Executive Board of Academic Affairs) with the University via a committee reports on these matters regularly or similar is an advantage before an to Council. Through the monitoring Professor Suzanne Cholerton (Pro- individual joins the governing body. undertaken by its Financial Vice-Chancellor – Education) Council benefits from a diversity of Monitoring and Budget Scrutiny Richard Dale members and actively seeks to Group and Budget Setting Group, (Executive Director of Finance) promote equality and diversity Executive Board is also responsible Professor Richard Davies throughout the institution. It is for the use of resources and (Pro-Vice-Chancellor – Global) committed to the aim of the 30% financial performance of all Club – at least 30%, and preferably budgetary units. It has particular Professor Nigel Harkness (Pro-Vice more, of its lay members to be responsibility for value for money. -Chancellor – Humanities and women, a figure that we Social Sciences) The principal academic and comfortably exceeded in 2019–20. John Hogan (Registrar) administrative officer of the Remuneration Committee University is the Vice-Chancellor Abi Kelly (Executive Director of th and President who has general Corporate Affairs until 13 March Remuneration Committee responsibility for maintaining and 2020) considers the remuneration and promoting the efficiency and good Adrienne McFarland (Executive terms and conditions of senior order of the University. Under OfS Director of People Services) members of staff. More detail on registration conditions, the Vice- the work of this committee is Chancellor and President is the Professor Brian Walker (Pro-Vice- provided on pages 62-64. accountable officer of the Chancellor – Research Strategy and Resources) University. In that capacity he and the Chair of Council can be Professor Philip Wright (Pro-Vice- summoned to appear before the Chancellor – Science, Agriculture Public Accounts Committee of the and Engineering) House of Commons. The Vice- Chancellor and President is also
58 Integrated Annual Report 2019-20
Corporate governance
Council: Statement of Primary to safeguard the good name and Council is responsible for keeping Responsibilities values of the institution proper accounting records, which disclose with reasonable accuracy Council is the supreme governing to appoint the head of the at any time the financial position of body of the University, subject to institution as chief executive, the University and to enable it to the provisions of the University’s and to put in place suitable ensure that the financial statements statutes. The primary arrangements for monitoring are prepared in accordance with responsibilities of Council have his/her performance the University’s statutes, the been revised in light of the Statement of Recommended statement of primary to appoint a Secretary to the governing body and to ensure Practice – Accounting for Further responsibilities taken from The and Higher Education Institutions Higher Education Code of that, if the person appointed has managerial responsibilities in the and accounting instructions Governance published in prepared by the OfS. The University December 2018 and are as follows: institution, there is an appropriate separation in the prepares financial statements for each financial year, which give a to approve the mission and lines of accountability true and fair view of the state of strategic vision of the institution, to be the employing authority affairs of the University and of the long-term academic and for all staff in the institution and surplus or deficit and cash flows for business plans and key to be responsible for that year. performance indicators, and to establishing a human resources ensure that these meet the strategy In causing the financial statements interests of stakeholders to be prepared, Council has to be the principal financial and ensured that: to ensure that processes are in business authority of the place to monitor and evaluate institution, to ensure that proper suitable accounting policies are the performance and books of account are kept, to selected and applied effectiveness of the institution approve the annual budget and consistently against the plans and approved financial statements, and to have key performance indicators, overall responsibility for the judgements and estimates are which should be – where institution’s assets, property and made that are reasonable and possible and appropriate – estate prudent benchmarked against other comparable institutions to be the institution’s legal applicable accounting standards authority and, as such, to ensure have been followed, subject to to delegate authority to the head that systems are in place for any material departures of the institution, as chief meeting all the institution’s legal disclosed and explained in the executive, for the academic, obligations, including those financial statements corporate, financial, estate and arising from contracts and other human resource management financial statements are legal commitments made in the prepared on the going concern of the institution; and to establish institution’s name and keep under regular review basis the policies, procedures and to receive assurance that Council has taken reasonable steps limits within such management adequate provision has been to: functions as shall be undertaken made for the general welfare of by and under the authority of the students ensure that funds from the OfS head of the institution and Research England are used to act as trustee for any only for the purposes for which to ensure the establishment and property, legacy, endowment, they have been given and in monitoring of systems of control bequest or gift in support of the accordance with the OfS Terms and accountability, including work and welfare of the and conditions of funding financial and operational institution 2019-20 and any other controls and risk assessment, conditions which the OfS or and procedures for handling to ensure that the institution’s Research England may from internal grievances and for constitution is followed at all time to time prescribe managing conflicts of interest times and that appropriate advice is available to enable this ensure that there are to establish processes to to happen appropriate financial and monitor and evaluate the management controls in place performance and effectiveness Responsibilities of Council in the to safeguard public funds and of the governing body itself Preparation of the Financial Statements funds from other sources to conduct its business in safeguard the assets of the accordance with best practice in In accordance with the University’s University and prevent and HE corporate governance and statutes, Council is responsible for detect fraud with the principles of public life the administration and drawn up by the Committee on management of the affairs of the secure the economical, efficient Standards in Public Life University and is required to and effective management of present audited financial the University’s resources and statements for each financial year. expenditure
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Corporate governance
Health, safety and wellbeing which was the same as the by the senior management team previous year. This totalled 2,616 (through Executive Board) on a 2019–20 saw a small increase in hours and a total cost of £73,400 regular basis. Appropriate action the total accident rates for (0.02% of total staff costs). 1,404 is taken to address performance colleagues and students with a hours were spent on paid trade issues and the outcome small reduction in the RIDDOR union activities (53.67% of total reported to Council (Reporting of Injuries, Diseases and facility time). Dangerous Occurrences The approach to internal control is Regulations) accident rate. There is Slavery and Human Trafficking risk-based. There is an ongoing an ongoing increase in the process designed to: reporting of near misses. The University has a responsibility to ensure that slavery and human identify the principal risks Actions in the five year Health and trafficking are not taking place in (whether business, operational, Safety strategic pan have been our business or in our supply compliance or financial) to the completed bar one which has been chains. Our Slavery and Human achievement of policies, aims carried forward. Health, safety and Trafficking Statement can be and objectives wellbeing has been a major focus accessed on our external website evaluate the nature and during the Covid-19 pandemic. We at ncl.ac.uk/foi/publication- likelihood of principal risks have documented comprehensive scheme/policies becoming a reality, and the guidance on how to control the potential impact risks of transmission and have Statement on Internal Control many supporting documents Council is responsible for take steps to manage risks including risk assessments and maintaining a sound system of efficiently, effectively and checklists to ensure controls internal control that supports the economically identified are implemented. achievement of policies, aims and review high-ranking risks (in Inductions are in place for both objectives, while safeguarding the colleagues and students and we terms of likelihood and impact) public and other funds and assets have provided Covid secure during the year for which it is responsible. The premises to control risks to the University’s arrangements for the make regular reports on internal health, safety and wellbeing of all. prevention and detection of fraud, control and risk to Council (as There has also been continued bribery, corruption and other well as Executive Board and progress in health and wellbeing irregularities are designed to Audit, Risk and Assurance including developing a programme manage rather than eliminate the Committee) to assure it that of initiatives during the pandemic risk of failure to achieve policies, procedures are in place for the and the provision of Wellbeing aims and objectives and can, identified risks to be managed Ambassadors in Units. therefore, only provide reasonable The University requires colleagues Sickness absence rates decreased and not absolute assurance against material misstatement or loss. and all its lay members to act slightly from 2.3% for 2018–19 to honestly and with integrity and to 2.1% for 2019-20. The rate for The key elements of the safeguard the public resources for operational colleague sickness University’s system of internal which they are responsible. The decreased to 5.4% from 6.3% in control, which is designed to University has a Policy and 2018-19. It is anticipated that the discharge the responsibilities set Procedure on Public Interest implementation of the Health and out above, include the following: Disclosure (Whistleblowing) which Wellbeing Strategic Plan and encourages and enables support provided by our Employee clear definitions of, and the employees to call out when they Assistance Programme will authority delegated to, heads of encounter or suspect malpractice. continue to further assist sickness academic units and heads of It provides protection for those absence management. administrative services making such disclosures who act in good faith consistent with the Trade Union Facility Time a comprehensive medium and Public Interest Disclosure Act. short-term planning process, During 2019-20 there were no The Trade Union (Facility Time supplemented by detailed whistleblowing cases raised Publication Requirements) annual income, expenditure, internally. There was one matter Regulations 2017 require us to capital and cash flow budgets collect and publish, on an annual raised by a member of the public basis, a range of data in relation to clearly defined and formalised which has resulted in changes to our usage of and spend on Trade requirements for approval and the web profile of a colleague. Union facility time in respect of our control of expenditure colleagues who are Trade Union Council is of the view that the representatives. The following comprehensive Financial University’s risk management information relates to the 12 Regulations, detailing financial response has been appropriate months ended 31 March 2020. controls and procedures, while recognising that some of the approved by Council and Covid-19 risks are beyond our 35 colleagues acted as trade union Finance Committee ability to prevent and the representatives during that period. mitigations might only be able to key performance and risk All spent between 1% and 50% of cover part of the impact arising. indicators, which are monitored their working hours on facility time,
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Corporate governance
The effectiveness of the system of Major incidents during the year On the same evening, the Prime internal control is regularly Minister effectively advised the reviewed by Council and accords The Covid-19 virus is the greatest country to avoid physical contact with the internal control guidance threat to the business continuity and those who could work at home for directors in the Combined Code since the Second World War. effectively to do so. From as deemed appropriate for higher Virtually every aspect of what we 17th March we ceased person-to- education. It is informed also by a do had to be changed within an person teaching for the remainder professional Internal Audit team, extraordinarily short period of time. of the 2019-20 academic year. which complies with the We switched from a vibrant professional standards of the campus of 35,000 students and We facilitated online working for Chartered Institute of Internal colleagues to a skeleton physical most aspects of our normal activity. Auditors. Internal Audit co-ordinate service, a couple of thousand We were at pains to stress that the their work appropriately with the students remaining in halls and on- University was not ‘closed’ with the External Auditors and other line delivery of our academic vast majority of colleagues working assurance providers to help programmes in just over a week in remotely. Meetings were typically improve our internal controls and mid-March 2020. Our campuses in held via Zoom or Teams, including support the delivery of value for London, Malaysia and Singapore all our key governance structures money. Senior management and faced identical challenges and which continued to meet normally. Audit, Risk and Assurance responded in similar ways. The The ongoing challenges presented Committee have also reviewed the crisis and response has been by the Covid-19 pandemic required performance of Internal Audit and unprecedented. a major change in our risk are satisfied with it. Our Emergency Management management approach. Our The Internal Audit strategy and plan Team met regularly from late Emergency Management Team is approved by the Audit, Risk and January to focus on the Covid-19 was increased to incorporate all Assurance Committee. The senior crisis. Initially, our attention was on aspects of the University’s ongoing management team and Audit, Risk the spread of the virus in China, the operations with its major focus on and Assurance Committee receive subsequent lockdown of the business continuity. It reported to regular internal audit reports (which country and the need to assist Executive Board which also include recommendations and students and colleagues in leaving increased its meeting capacity to actions for improvement) and an China and other countries. manage the significant challenges Internal Audit annual report, which presented in devising control In late February, reports came measures and overseeing their is provided to Council. The Internal through of the virus causing severe Audit annual report for 2019–20 implementation working with concerns in Italy. On 25th February, included a qualified opinion on the Senate and Council. Italian universities were instructed University’s arrangements for risk to operate in a remote fashion and We refocused our strategic risk management, internal control, not have students or staff on register to inform our response to corporate governance and value campus. At this stage, there were the pandemic. We paid particular for money. Concerns were raised no indications that this approach attention to safety, wellbeing, on the delay to completion of would be required by the UK academic delivery, student actions arising from the fraud government in the immediate experience, student recruitment, investigation in 2018-19 (now future and possibly not at all. The finances and IT. This approach was largely addressed) and the impact initial UK approach seemed to be discussed with and agreed by of the cyber-security incident in based on development of a ‘herd Council who paid special attention August 2020. immunity’ which would not require to issues of safe working, financial We notified the OfS of six dramatic long-term adjustments to sustainability and cyber-security. reportable events. Four related to normal economic activity. However, Our cyber-security arrangements changes in educational as the scale of the crisis in Italy and were reviewed by Jisc prior to the partnerships, one was about the elsewhere developed, it became pandemic. It found that the our changes required because of the clear that, under such an approach, overall external security posture pandemic and one concerned the infection rates would result in was good but there were control decision not to admit new healthcare provision being weaknesses once inside the undergraduate degree students overwhelmed and fatalities University’s network. The University into our London joint venture. None escalating to terrifying numbers. suffered a severe external attack of the other cases materially affects An emergency meeting of on its IT systems in August 2020 or could materially affect our legal Executive Board on Sunday 15th which has taken some time to form or business model, and/or our March agreed that we would move recover from. Long term damage willingness or ability to comply with to online teaching provision, appears to be limited and we are our conditions of registration. although at this stage the using the lessons learned to further Public Disclosure government advice was such an strengthen our network security. approach was not necessary. There has been extensive Council membership, agenda, Having consulted the Chair of discussion of the causes and unreserved papers and minutes are Council, the Vice-Chancellor and restoration activity by Audit Risk all made publicly available on the President informed the University and Assurance Committee and University website. of the decision on 16th March. Council. These problems are being seen elsewhere in the sector. 61
Remuneration report
Remuneration Report For the year ended 31 July 2020
‘This Remuneration Report Unaudited information The committee recognises the (pages 62-64) provides an need for greater transparency of overview of our approach to Remuneration Committee the approach to determining senior rewarding the members of the remuneration. The committee Executive Board of Newcastle Remuneration Committee makes use of a number of reliable University and contains audited membership was revised to ensure information sources to help guide information now required in line alignment with the CUC Code. The decisions on Executive Board with the Accounts Direction for members at the end of the financial remuneration including: the 2019–20 financial year issued year were: by the Office for Students. The annual Russell Group survey Vicky Wright of senior pay (produced by Korn The report is compiled having Lay member of Council (Chair) Ferry) Paul Walker regard to guidance from the The Universities and Colleges Chair of Council Committee of University Chairs Employers Association Senior Stephen Lightley (CUC) regarding pay policies and Salary Survey Ex-officio member practices in British universities in The annual CUC survey of Vice- Claire Morgan relation to senior colleagues. Chancellors’ remuneration lay member of Council The University has published its Nitin Shukla, The work of the committee was third Gender Pay Gap Report and lay member of Council restricted during 2019-20 as a developed a pay equality action result of the Covid-19 pandemic. plan to ensure that colleagues Nitin Shukla joined the committee However, it did consider: are not subjected to either during the year. Adrienne conscious or unconscious gender McFarland, Executive Director of professorial pay levels and People Services is Secretary to the bias in pay determination. The decisions reached in 2019 by the Remuneration Committee will committee. The Vice-Chancellor Merit Awards Committee and President is not a member of continue to seek assurance that 2019 Gender Pay Gap report the committee, but regularly there is no gender bias in respect trends in overall pay levels of pay of those higher paid attends meetings by invitation. including available benchmarking data colleagues within its remit.’ Remuneration Policy for Executive Board Overall pay costs The Remuneration Committee sets The table below shows the growth the remuneration of the members in underlying colleague costs over of Executive Board. In doing so, the the past three years (costs exclude Committee takes account of a agency staff but include the range of factors, including: University’s pension contributions). The significant increase in roles and responsibilities underlying costs as a percentage of university performance income in 2019-20 was mostly due individual performance to the impact of the Covid-19 market conditions lockdown on research and the negotiated remuneration commercial income. In the long settlement for colleagues term, the University aims to keep internal pay relativities this at broadly 55% of underlying income but this is highly unlikely to occur in 2020-21 as we recover from the Covid-19 pandemic. Total Underlying underlying Underlying colleague costs income colleague costs £m £m as % of Income 2017–18 278.5 505.4 55.1% Vicky Wright Chair of 2018–19 290.5 526.1 55.2% Remuneration Committee 2019-20 309.7 536.1 57.8%
62 Integrated Annual Report 2019-20
Remuneration report
Gender pay gap mean pay gap across all to the process being paused professors from 4.5% in 2017 to during the Covid-19 pandemic. We are in the third year of Gender 1.3% in 2019 Initial applications received Pay Gap reporting. Our 2019 report show equal numbers from male demonstrated the positive progress the move away from Head of and female colleagues which is we continue to make with a School nomination to colleague promising reduction in our mean pay gap to self–application helped reduce 18.5% (2018-19: 20%) and median the pay gap with 34% of female active promotion of University’s pay gap to 17.0% (2018-19: 18.1%). professors securing a pay award flexible working opportunities to The mean bonus gap for bonuses compared to 20% of male support continued development awarded by the University is 42% professors and career progression of and median is 46%. Our mean women across the University bonus pay gap, including clinical introduced Real Living Wage in excellence awards made by the November 2019 and positively removal of service criteria for all NHS to our FMS colleagues, has impacted 680 colleagues, 56% family friendly policies as part of increased to 79% (2018-19: 53%) of whom were women our For Families Project which and median 47% (2018-19: 49%). will position our parental leave introduced expected transition and pay policies towards the Actions taken to date to address of Teaching and Scholarship most generous in the sector and the gender pay gap include the colleagues between grades F thereby positively contribute to following: and G positively impacting on the further reduction in our 62% women and 38% men gender pay gap we secured renewal of our following the review of Athena Swan Silver accreditation introducing a gender decoder academic promotions we tool for both job adverts and job which recognises excellence in introduced a new academic pay Equality and Diversity, through a descriptions and re-enforced review process which enabled gender balanced interview rigorous external validation academic colleagues to apply review panels for senior appointments. for pay progression where they Also work continues on positive encouragement to all considered they had developing unconscious bias Faculties to review the banding demonstrated excellence in line training for all colleagues levels of all their professors with the University’s Vision and engaged in recruitment resulted in a reduction in hourly values. Limited data is available practices. on the success of this action due
Audited Information Higher paid colleagues The number of colleagues with a basic salary of over £100,000 per annum (excluding the Vice-Chancellor and President), broken down into bands of £5,000, is shown in the table below.
Non- 2019-20 2018-19 Pay Band Clinical Clinical Total Total £100,000 - £104,999 12 18 30 35 £105,000 - £109,999 12 17 29 20 £110,000 - £114,999 12 5 17 15 £115,000 - £119,999 9 5 14 10 £120,000 - £124,999 3 4 7 8 £125,000 - £129,999 4 3 7 12 £130,000 - £134,999 8 2 10 11 £135,000 - £139,999 7 4 11 13 £140,000 - £144,999 4 4 8 5 £145,000 - £149,999 6 4 10 5 £150,000 - £154,999 1 2 3 1 £155,000 - £159,999 - 2 2 1 £160,000 - £164,999 - 1 1 2 £165,000 - £169,999 2 1 3 3 £170,000 - £174,999 - 1 1 1 £175,000 - £179,999 - 3 3 1 Total 80 76 156 143
63
Remuneration report Remuneration report
Remuneration for the Vice-Chancellor and President 2019-20 2018 -19 The remuneration of the Vice-Chancellor and President is £000 £000 reviewed annually by the Remuneration Committee. This follows a review of personal and institutional performance Salary 323.1 317.4 undertaken by the Chair of Council. Professor Day’s salary is Payments in lieu of 50.4 49.5 determined according to a number of factors including but pension contributions not limited, to: Benefits in kind 0.0 0.0 Employer Pension the breadth of leadership responsibilities for one of the 6.5 6.7 UK’s largest universities consisting of more than 28,699 Contributions students based in campuses across the UK, Malaysia and Total staff costs 379.9 373.6 Singapore; the financial responsibilities of an institution with a Salary Waived -12.9 0.0 turnover of more than £544m and 6,600 colleagues Net total 367.0 373.6 the accountability for sustaining a high quality educational experience for students and a world-leading research portfolio His salary was increased by 1.8% in August 2019 in line with the cost of living increase for all colleagues. During the Covid-19 pandemic he has taken a voluntary salary reduction of 20%. In accordance with accounting standards, this reduction is recorded as a donation under ‘Other Income’ in the financial statements, From 1 January 2018, Professor Day ceased active membership of the USS under their enhanced opt-out arrangements. As a result, he receives an allowance equivalent to the employer’s contribution for future accrual (subject to the normal deductions of income tax and National Insurance). The University is also required to pay a deficit recovery contribution of 2.1% of salary to USS (shown as pension contributions below). The Vice-Chancellor and President’s basic salary is 9.6 times the median basic salary of colleagues (2018-19: 9.7) where the median basic salary is calculated on a full-time equivalent basis for the salaries paid by the University of its colleagues. The Vice-Chancellor and President’s total remuneration is 9.4 times the median total remuneration of colleagues (2018-19: 9.7) where the median total remuneration is calculated on a full-time equivalent basis for the total remuneration by the University of its colleagues. Published information available from the OfS indicates that this level is outside the top 10 pay ratios within the HE sector. Payments to key management personnel Key management personnel are those persons having 2019-20 2018 -19 authority and responsibility for planning, directing and £m £m controlling the activities of the University. Colleague costs Key management shown in the accounts include compensation paid to key personnel management personnel. We define key management compensation: personnel as the members of our Executive Board. For the Salary and benefits year ended 31 July 2020, Executive Board consisted of 13 (including employer's 2.6 2.5 full-time members (2019: 12) including the Vice-Chancellor pension contributions) and President. Severance payments We pay due regard to the Guidance on decisions taken about severance payments in HEIs published by the Committee of University Chairs (CUC). In 2019-20, we paid £0.7 million to 113 former colleagues in compensation for loss of office (2018–19: £0.8million to 86 former colleagues).
64 Integrated Annual Report 2019-20
Independent Auditor’s report
Independent Auditor’s Report to the Council of Newcastle University
Opinion Basis for opinion Other information We have audited the financial We conducted our audit in The other information comprises statements of Newcastle University accordance with International the information included in the (‘the parent institution’) and its Standards on Auditing (UK) (ISAs Integrated Annual Report 2019-20, subsidiaries (the ‘group’) for the (UK) and applicable law. Our other than the financial statements year ended 31 July 2020 which responsibilities under those and our auditor’s report thereon. comprise the Consolidated and standards are further described in The Council is responsible for the University Statement of the Auditor’s responsibilities for the other information. Comprehensive Income, audit of the financial statements Consolidated and University section of our report below. We are Our opinion on the financial Statement of Changes in Reserves, independent of the group and statements does not cover the Consolidated and University parent institution in accordance other information and, except to the Statement of Financial Position, with the ethical requirements that extent otherwise explicitly stated in Consolidated Cash Flow Statement are relevant to our audit of the this report, we do not express any and the related notes 1 to 32, financial statements in the UK, form of assurance conclusion including a summary of significant including the FRC’s Ethical thereon. accounting policies. The financial Standard, and we have fulfilled our In connection with our audit of the reporting framework that has been other ethical responsibilities in financial statements, our accordance with these applied in their preparation is responsibility is to read the other applicable law and United Kingdom requirements. information and, in doing so, Accounting Standards including We believe that the audit evidence consider whether the other FRS 102 ‘The Financial Reporting information is materially Standard applicable in the UK and we have obtained is sufficient and inconsistent with the financial Republic of Ireland’ (United appropriate to provide a basis for our opinion. statements or our knowledge Kingdom Generally Accepted obtained in the audit or otherwise Accounting Practice). Conclusions relating to appears to be materially misstated. In our opinion, the financial going concern If we identify such material statements: inconsistencies or apparent We have nothing to report in material misstatements, we are give a true and fair view of the respect of the following matters in required to determine whether group’s and of the parent relation to which the ISAs (UK) there is a material misstatement in institution’s state of affairs as at require us to report to you where: the financial statements or a 31 July 2020, and of the Group’s material misstatement of the other and parent institution’s income the Council’s use of the going information. If, based on the work and expenditure, gains and concern basis of accounting in we have performed, we conclude losses and changes in reserves the preparation of the financial that there is a material and of the Group’s cash flows statements is not appropriate; or misstatement of the other information, we are required to for the year then ended; the Council have not disclosed report that fact. have been properly prepared in in the financial statements any accordance with United identified material uncertainties We have nothing to report in this Kingdom Generally Accepted that may cast significant doubt regard. Accounting Practice; and about the group’s or the parent institution’s ability to continue to have been properly prepared in adopt the going concern basis accordance with the Statement of accounting for a period of at of Recommended Practice: least twelve months from the Accounting for Further and date when the financial Higher Education, relevant statements are authorised for legislation and Office for issue. Students requirements.
65
Independent Auditor’s report
Opinion on other matters Responsibilities of the Council Misstatements can arise from fraud prescribed by the Office for or error and are considered material Students As explained more fully in the if, individually or in the aggregate, Statement of the Responsibilities of they could reasonably be expected In our opinion, based on the work Council in the Preparation of the to influence the economic undertaken in the course of the Financial Statements, set out on decisions of users taken on the audit, in all material respects: page 59, the Council is responsible basis of these financial statements. for the preparation of the financial funds from whatever source statements and for being satisfied A further description of our administered by Newcastle that they give a true and fair view, responsibilities for the audit of the University have been properly and for such internal control as the financial statements is located on applied to those purposes and Council determine is necessary to the Financial Reporting Council’s managed in accordance with enable the preparation of financial website at https://www.frc.org.uk/ relevant legislation; statements that are free from auditorsresponsibilities. This material misstatement, whether description forms part of our funds provided by the Office for due to fraud or error. auditor’s report. Students and UK Research and Innovation (including Research In preparing the financial Use of our report England) and the Department for statements, the Council is Education have been applied in responsible for assessing the This report is made solely to the accordance with the applicable group’s and the parent institution’s Council of Newcastle University, as Terms and conditions attached ability to continue as a going a body, in accordance with the to them; and concern, disclosing, as applicable, Charters and Statutes of the matters related to going concern University. Our audit work has been the requirements of the Office and using the going concern basis undertaken so that we might state for Students accounts direction of accounting unless the Council to the Council those matters we are for the relevant year’s financial either intend to liquidate the group required to state to them in an statements have been met. or the parent institution or to cease auditor’s report and for no other operations, or have no realistic purpose. To the fullest extent Matters on which we are alternative but to do so. permitted by law, we do not accept required to report by exception or assume responsibility to anyone Auditor’s responsibilities for other than the Newcastle University We have nothing to report in the audit of the financial and the Council as a body, for our respect of the following matters in statements audit work, for this report, or for the relation to which the Office for opinions we have formed. Students require us to report to you Our objectives are to obtain where: reasonable assurance about whether the financial statements as the University’s grant and fee a whole are free from material income, as disclosed in note 1 to misstatement, whether due to fraud the financial statements, has or error, and to issue an auditor’s been materially misstated; or report that includes our opinion. Ernst & Young LLP the University’s expenditure on Reasonable assurance is a high Edinburgh access and participation level of assurance, but is not a 17th December 2020 activities for the financial year guarantee that an audit conducted has been materially misstated. in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Notes: 1. The maintenance and integrity of the Newcastle University web site is the responsibility of the Council; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the financial statements since they were initially presented on the web site. 2. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.
66 Integrated Annual Report 2019-20
Statement of Principal Accounting Policies
Statement of Principal Accounting Policies
1. General information The Financial Review also The basis for that decision is describes the financial position of described more fully on pages 54- The University is registered with the the University, its cash flows, 55. Office for Students and its principal liquidity position and borrowing address is Newcastle University, facility. At 31 July 2020 the Group The financial statements are King’s Gate, Newcastle upon Tyne, held cash, cash equivalents and prepared in sterling which is the NE1 7RU. short term deposits of £140.3m, functional currency of the group which had increased to £223.7m at and rounded to the nearest one 2. Statement of compliance 30 November 2020. Net current hundred thousand (£0.1m) except when otherwise indicated. The Consolidated and University assets were £42.7m and the only external borrowings are a loan from financial statements have been 4. Exemptions under FRS 102 prepared in accordance with the European Investment Bank of United Kingdom Accounting £100m repayable between 2021 The University has taken the Standards, including Financial and 2046. At 30 November 2020, exemption under section 3.3 of the Reporting Standard 102 (FRS 102) we had no further borrowing in SORP (1.12(b) of FRS 102) to not and the Statement of place. We complied with all produce a cash flow statement for Recommended Practice (SORP): covenant requirements for existing the University in its separate Accounting for Further and Higher borrowing at 31 July 2020 and financial statements. Education (2019 edition). They have forecast significant headroom in also been prepared in accordance covenant compliance at 31 July 5. Basis of consolidation with the ‘carried forward’ powers 2021. The consolidated financial and duties of previous legislation Council has reviewed financial statements include the financial (Further and Higher Education Act forecasts, including plans for future statements of the University and all 1992 and the Higher Education Act student recruitment, and after its subsidiaries together with the 2004) and the new powers of the reviewing the assumptions utilised share of the results of joint ventures Higher Education and Research Act in different forecast scenarios, it is and associates for the financial year 2017 during the transition period to satisfied that the University and to 31 July 2020. Intra-group 31 July 2019, the Royal Charter, the Group is expected to be able to transactions are eliminated on Accounts Direction issued by the meet its commitments and consolidation. Office for Students (OfS), the terms obligations for at least the next and conditions of funding for higher twelve months from the date of the Gains or losses on any intra-group education institutions issued by the signing of this report, including transactions are eliminated in full. Office for Students and the terms under any plausible worst case Amounts in relation to debts and and conditions of the Research scenario for future financial claims between undertakings England grant. performance during this period. included in the consolidation are also eliminated. Balances between The University is a public benefit We are forecasting significant the University and its associates entity and therefore has applied the liquidity throughout the next 12 and joint ventures are not relevant public benefit requirement months to December 2021, with eliminated. Normal trading of the applicable UK laws and headroom under a plausible worst transactions that are not settled by accounting standards. case scenario of £97m. the year-end date are included as 3. Basis of preparation For budgetary control purposes in current assets or liabilities. Any 2020-21, we have set initial gains or losses are included in the The financial statements are spending levels using a severe but carrying amount of assets of either prepared under the historical cost plausible downside scenario, entity, the part relating to the convention (modified by the containing a significant external University’s share is eliminated. revaluation of certain financial shock to key revenue streams, assets and liabilities at fair value). which will unwind in subsequent The consolidated financial years. Student recruitment in 2020 statements do not include the The University’s principal has turned out to be significantly results of Newcastle University operations, together with the better than this scenario which will Students’ Union as the University factors likely to affect its future allow some relaxation of spending does not exert control or dominant development and financial position limits as the year progresses. influence over policy decisions. are noted in the strategic review, materiality and risk, relationships On this basis, Council continues to The consolidated financial and resources and financial review adopt the going concern basis of statements do not include the sections. accounting in preparing the annual results of the University of financial statements. Newcastle upon Tyne 67
Statement of Principal Accounting Policies
Development Trust as it is a the Statement of Financial Position a reasonable estimate of their gross separate charity which manages its and released to income as the value or the amount actually funds independently of the conditions are met. realised. Donated tangible assets University. Although the University are valued and accounted for as nominates some of the trustees, it Donations and endowments tangible assets under the has no control over the Trust’s Non-exchange transactions without appropriate asset category. decisions. performance related conditions are Income from expendable Associated companies and joint donations and endowments. endowments is recognised to the ventures are accounted for using Donations and endowments with extent of the related expenditure the equity method. donor imposed restrictions are during the year. Permanent recognised in income when the endowments are managed on a 6. Income recognition University is entitled to the funds. total return basis. The entire Income is retained within the investment return is included in the Income from the sale of goods or restricted reserve until such time Statement of Comprehensive services is credited to the that it is utilised in line with such Income to the extent of the related Consolidated Statement of restrictions at which point the expenditure during the year. Comprehensive Income when the income is released to general goods or services are supplied to reserves through a reserve transfer. Capital grants the external customers or the terms of the contract have been satisfied. Donations with no restrictions are Capital grants are recognised in recognised in income when the income when the University is Tuition fee income is stated gross University is entitled to the funds. entitled to the funds subject to any of any expenditure which is not a performance related conditions discount and credited to the Investment income and being met. Consolidated Statement of appreciation of endowments is Comprehensive Income over the recorded in income in the year in 7. Accounting for period in which students are which it arises and as either retirement benefits studying. Where the amount of the restricted or unrestricted income tuition fee is reduced, by a discount according to the terms or other The two principal pension schemes for prompt payment, income restrictions applied to the individual for the University’s staff are the receivable is shown net of the endowment fund. Universities Superannuation discount. Bursaries and Scheme (USS) and the University of There are four main types of scholarships are accounted for Newcastle upon Tyne Retirements donations and endowments gross as expenditure and not Benefits Plan (1971) (RBP) which is deducted from income. identified within reserves: an Exempt Approved Scheme under the Finance Act 1970. RBP is Education contracts are recognised restricted donations – the donor has specified that the donation a defined benefit scheme. USS is a when the University is entitled to hybrid pension scheme, providing the income, which is the period in must be used for a particular objective defined benefits (for all members), which students are studying, or as well as defined contribution where relevant, when performance unrestricted permanent benefits. The assets of both RBP conditions have been met. endowments – the donor has and USS are held in trustee- Funds the University receives and specified that the fund is to be administered funds. Each fund is disburses as paying agent on permanently invested to valued every three years by behalf of a funding body are generate an income stream for professionally qualified excluded from the income and the general benefit of the independent actuaries. University expenditure of the University where A small number of staff remain in the University is exposed to other pension schemes. minimal risk or enjoys minimal restricted expendable endowments – the donor has economic benefit related to the The USS is a multi-employer transaction. specified a particular objective other than the purchase or scheme. Due to the mutual nature of the scheme, it is not possible to Grant funding construction of tangible assets, and the University has the identify the assets and liabilities of the scheme to University members Grant funding including funding power to use the capital council block grant, research grants on a consistent and reasonable from government sources and Restricted permanent basis. Therefore, as required by grants (including research grants) endowments – the donor has Section 28 of FRS 102 ‘Employee from non-government sources are specified that the fund is to be benefits’, the scheme is accounted recognised as income when the permanently invested to for as if it were a wholly defined University is entitled to the income generate an income stream to contribution scheme. As a result, and performance related be applied to a particular the amount charged to expenditure conditions have been met. Income objective. represents the contributions received in advance of payable to the scheme in respect performance related conditions Donations of tangible assets are of the accounting period. Since the being met is recognised as included within income. The University has entered into a deferred income within creditors in income recognised is valued using recovery plan agreement to fund 68 Integrated Annual Report 2019-20
Statement of Principal Accounting Policies past deficits, a liability is recorded outstanding liability. The finance the extent that they increase the within provisions for the charge is allocated to each period expected future benefits to the contributions payable that arise during the lease term so as to University. from the agreement, to the extent produce a constant periodic rate of that they relate to the deficit, and interest on the remaining balance Freehold land is not depreciated as the resulting expense is recognised of the liability. it is considered to have an indefinite as expenditure. useful life. Buildings and major 10. Operating leases refurbishments are depreciated on The RBP scheme’s assets are a straight line basis over their included at market value and Costs in respect of operating leases expected useful lives to the scheme liabilities are measured on are charged on a straight-line basis University, by components (where an actuarial basis using the over the lease term. Any lease appropriate) as follows: projected unit method; these premiums or incentives are spread liabilities are discounted at the over the minimum lease term. Structure – 50 years current rate of return on AA Fit-out – 20 years corporate bonds. The post- 11. Foreign currency retirement benefit surplus or deficit University Mechanical/ is included on the University’s electrical services – 15 years Statement of Financial Position, net Transactions denominated in of the related amount of deferred foreign currencies are recorded at Expenditure relating to subsequent tax. Surpluses are only included to the rate of exchange ruling at the replacement of components is the extent that they are dates of the transactions. Monetary capitalised as incurred. recoverable through reduced assets and liabilities denominated contributions in the future or in foreign currencies are translated Short-leasehold buildings are depreciated over the shorter of the through refunds from the scheme. into sterling at year-end rates. The current service cost and any Foreign exchange differences lease term and the expected life of past service costs are included in arising on translation are the asset. expenditure within staff costs. The recognised as a surplus or deficit. No depreciation is charged on interest income on the scheme’s assets in the course of construction. assets, net of the impact of the Group unwinding of the discount on Equipment scheme liabilities, is included within The assets and liabilities of foreign investment income or interest and subsidiary undertakings are Equipment costing less than other finance costs. Actuarial gains translated to sterling at the rate of £25,000 per individual item or and losses are recognised in Other exchange ruling at the year-end group of related items and all Comprehensive Income. date. The revenues and expenses software costs are recognised as of foreign subsidiary undertakings expenditure. All other equipment is 8. Employment benefits are translated at an average rate for capitalised. the year where this rate Short-term employment benefits approximates to the foreign Capitalised equipment is stated at such as salaries and compensated exchange rates ruling at the dates cost and depreciated over its absences are recognised as an of the transactions. The exchange expected useful life, as follows: expense in the year in which the difference arising on the employees render service to the retranslation of opening net assets Research vessel – 25 years University. Any unused benefits are is taken to Other Comprehensive General equipment – 4 to 10 years accrued and measured as the Income. All other exchange additional amount the University differences are recognised as a Equipment acquired - project expects to pay as a result of the surplus or deficit for the year. for specific research life unused entitlement. projects (generally 12. Property, plant and 3 years) 9. Finance leases equipment Leased equipment – period of Leases in which the University Land and buildings lease assumes substantially all the risks and rewards of ownership of the Land and buildings are stated at Depreciation methods, useful lives leased asset are classified as cost/deemed cost less and residual values are reviewed at finance leases. Leased assets accumulated depreciation and each year-end. acquired by way of finance lease accumulated impairment losses. and the corresponding lease Freehold land was revalued to fair Impairment liabilities are initially recognised at value on transition to the 2015 an amount equal to the lower of SORP, and is measured on the basis A review for impairment of their fair value and the present of deemed cost, being the revalued property, plant and equipment is value of the minimum lease amount at the 31 July 2014 carried out if events or changes in payments at inception of the lease. transition date. circumstances indicate that the carrying amount of the property, Minimum lease payments are Costs incurred in relation to land plant and equipment may not be apportioned between the finance and buildings after initial purchase recoverable. charge and the reduction of the or construction, are capitalised to
69
Statement of Principal Accounting Policies
Borrowing costs sums relating to endowment tax rates and laws that are enacted reserves which bear restrictions or substantively enacted at the Borrowing costs are recognised as regarding use. reporting date. Unrelieved tax expenditure in the period in which losses and other deferred tax they are incurred. 18. Short-term liquid deposits assets shall be recognised only to the extent that it is probable that 13. Heritage assets Short-term liquid deposits are term they will be recovered against the deposits maturing more than three reversal of deferred tax liabilities or Where material, heritage assets months after placement. other future taxable profits. purchased on or after 1 August 19. Provisions Deferred tax assets and liabilities 2007 are measured and recognised are not discounted. at their cost. Where reliable cost or valuation information is available, Provisions are recognised in the financial statements when: The University is an exempt charity assets acquired prior to 1 August within the meaning of Part 3 of the 2007 are included in tangible the University has a present Charities Act 2011. It is therefore a assets. obligation (legal or constructive) charity within the meaning of as a result of a past event Paragraph 1 of Schedule 6 to the 14. Intangible assets Finance Act 2010 and accordingly, Intangible assets created within the it is probable that an outflow of the University is potentially exempt business are not capitalised and economic benefits will be from UK corporation tax in respect expenditure is charged against required to settle the obligation of income or capital gains received profits in the year in which it is and within categories covered by incurred. Intangible assets Sections 478–488 of the a reliable estimate can be made Corporation Tax Act 2010 (CTA purchased are initially recognised of the amount of the obligation. at cost and amortised on a straight 2010) or Section 256 of the Taxation of Chargeable Gains Act line basis over five years The amount recognised as a 1992, to the extent that such representing the estimated useful provision is determined by income or gains are applied to life of the assets. They are subject discounting the expected future exclusively charitable purposes. to periodic impairment reviews as cash flows at a pre-tax rate that appropriate. reflects risks specific to the liability. The University receives no similar 15. Investments exemption in respect of Value 20. Accounting for joint Added Tax (VAT). Irrecoverable VAT operations, jointly Non-current asset investments that on expenditure (revenue and are not listed on a recognised stock controlled assets and capital) is included in the costs of exchange are carried at historical jointly controlled such expenditure. Any cost, less any provision for operations irrecoverable VAT allocated to fixed impairment in their value. assets is included in their cost. The University accounts for its Investments in jointly controlled share of joint ventures using the The University’s subsidiary entities, associates and subsidiaries equity method. companies are subject to are carried at cost less impairment corporation tax and VAT in the The University accounts for its in the University’s separate financial same way as any commercial share of transactions from joint statements. organisation. operations and jointly controlled 16. Stock assets in the Consolidated 22. Financial instruments Statement of Comprehensive Stock is held at the lower of cost Income. The University applies the and net realisable value. provisions of Sections 11 and 12 of 21. Taxation FRS 102 in full. The University’s 17. Cash and cash equivalents financial assets and liabilities all Current tax, including UK meet the criteria for basic financial Cash includes cash in hand, corporation tax and foreign tax, is instruments prescribed within FRS deposits repayable on demand and provided at amounts expected to 102 Section 11.8. overdrafts. Deposits are repayable be paid (or recovered) using the tax on demand if they are in practice rates and laws that have been 23. Reserves available within 24 hours without enacted or substantively enacted penalty. by the reporting date. Reserves are classified as restricted or unrestricted. Restricted Cash equivalents are short term Deferred tax is provided in full on endowment reserves include (maturity being less than three timing differences that exist at the balances which, through months from the placement date), reporting date and that result in an endowment to the University, are highly liquid investments that are obligation to pay more tax, or a held as a permanently restricted readily convertible to known right to pay less tax in the future. fund which the University must amounts of cash with insignificant The deferred tax is measured at the hold in perpetuity. risk of change in value. rate expected to apply in periods in which the timing differences are Cash and cash equivalents contain expected to reverse, based on the
70 Integrated Annual Report 2019-20
Statement of Principal Accounting Policies
Other restricted reserves include payments of 6% of salaries from Work to improve access and balances where the donor has 1 October 2021 to 31 March 2028. participation is embedded in the designated a specific purpose and These contributions will be core activities of the University, so therefore the University is restricted reassessed with each triennial judgement is required in in the use of these funds. valuation of the scheme. apportioning some staff and non- staff costs. The University has 24. Critical accounting The University has used the deficit apportioned some costs based on estimates and judgements modeller provided by the British the proportion of home Universities Finance Director’s undergraduate students from The preparation of the University’s Group (BUFDG) in order to underrepresented groups. The financial statements requires calculate the liability. We have expenditure does not include management to make judgements, applied our own assumptions: overhead recovery or expenditure estimates and assumptions that funded under the National future staff increases based on affect the application of accounting Collaborative Outreach Programme our five year forecast with nil policies and reported amounts of (NCOP). assets and liabilities, income and growth after that period expenses. These judgements, The expenditure on disability estimates and associated salary inflation based on our five excludes expenditure on the estate assumptions are based on historical year forecast with an annual 3% where we have a duty to do this experience and other factors, increase after that period under the Equality Act. including expectations of future discount rate 0.74% based on Impairments events that are believed to be guidance produced for BUFDG reasonable under the by Mercer Limited Management make judgements as circumstances. The resulting to whether any indicators of accounting estimates will, by Holiday pay impairment are present for any of definition, seldom equal the related the University’s assets. actual results. The holiday pay accrual is calculated using a sample of A valuation of the Newcastle Helix Management consider the areas schools and services. site was due this year following a set out below to be those where three year cycle and the critical accounting judgements Useful lives of property, plant and completion of a revised master have been applied and the equipment plan for the site. A best estimate resulting estimates and has been obtained by carrying out assumptions may lead to Property, plant and equipment a review of the costs to complete adjustments to the future carrying represent a significant proportion of land preparation for development amounts of assets and liabilities: the University’s total assets. Therefore, the estimated useful and the likely proceeds from the RBP pension scheme lives can have a significant impact sale of that land. The University’s on the depreciation charged and share of that reduction in value is The actuarial valuation involves the University’s reported £14.6m resulting in an impairment in making assumptions about performance. Useful lives are the investment in Newcastle discount rates, future salary determined at the time the asset is Science Central Management LLP. increases, mortality rates and acquired and reviewed regularly for future pension increases. Due to appropriateness. The lives are Provisions the complexity of the valuation, the based on historical experience with The calculation of the provision in underlying assumptions and the similar assets as well as anticipation relation to an onerous lease has long term nature of the plan, such of future events. been based on the discounted cash estimates are subject to significant flows of future liabilities from that uncertainty. The assumptions used Access and Participation Plan lease. Estimates are inherent in the by the actuary are included in note discount rate used. 29 to the accounts. Expenditure relating to the 2019-20 Access and Participation Plan has USS pension scheme been reported in line with the four categories used in the plan for The University is satisfied that USS 2020-21 onwards. meets the definition of a multi- employer scheme and has The spend relates to work in therefore recognised a provision for support of underrepresented the discounted fair value of the groups. This includes expenditure contractual contributions under the funded by the OfS Premium to funding plan in existence at the support successful student year-end date. The provision is outcomes and the OfS Disabled currently based on the funding plan students' premium. agreed in September 2019 following completion of the 2018 Staff costs have been included valuation. It requires deficit where these are intrinsic to the contributions of 2% of salaries to delivery of access and participation 30 September 2021 and then activities.
71
Consolidated and University Statement of Comprehensive Income for the year ended 31 July 2020
Consolidated University 2020 2019 2020 2019 Note £m £m £m £m INCOME Tuition fees and education contracts 2 288.2 264.5 273.2 250.0 Funding body grants 3 75.8 71.9 75.8 71.9 Research grants and contracts 4 97.7 108.7 97.7 108.7 Other income 5 72.5 117.0 76.1 121.3 Investment income 6 1.9 2.5 2.0 2.5 Donations and endowments 7 8.1 6.0 8.1 6.0
Total income 544.2 570.6 532.9 560.4
EXPENDITURE Staff costs 8 269.9 387.8 262.2 380.0 Other operating expenses 9 177.0 199.4 173.1 194.6 Depreciation 13 31.6 28.5 30.2 27.3 Interest and other finance costs 10 7.6 6.2 5.5 4.1
Total expenditure 11 486.1 621.9 471.0 606.0
Surplus/(deficit) before other gains/losses and 58.1 (51.3) 61.9 (45.6) share of deficit of joint ventures and associate
Gain on disposal of tangible assets 3.5 0.0 3.5 0.0 Loss on impairment of non-current assets (1.7) 0.0 (16.5) 0.0 Gain on investments 21 3.6 4.9 3.6 4.9 Share of (deficit)/surplus in joint ventures 15 (11.7) 2.2 0.0 0.0
Surplus/(deficit) before tax 51.8 (44.2) 52.5 (40.7)
Taxation 12 (0.7) (0.2) 0.0 0.0
Surplus/(deficit) for the year 51.1 (44.4) 52.5 (40.7)
OTHER COMPREHENSIVE INCOME Actuarial loss in respect of pension scheme 29 (8.1) (19.2) (8.1) (19.2)
Total comprehensive income/(expenditure) for the year 43.0 (63.6) 44.4 (59.9)
Represented by: Endowment comprehensive income for the year 21 2.1 4.5 2.1 4.5 Restricted comprehensive expenditure for the year 22 0.0 0.0 0.0 0.0 Unrestricted comprehensive income/(expenditure) for the year 40.9 (68.1) 42.3 (64.4)
Attributable to the University 43.0 (63.6) 44.4 (59.9)
All items of income and expenditure arise from continuing operations.
72 Integrated Annual Report 2019-20
Consolidated and University Statement of Changes in Reserves for the year ended 31 July 2020
Total excluding Non - non-controlling controlling Consolidated Endowment Restricted Unrestricted interest interest Total £m £m £m £m £m £m
Balance at 1 August 2018 80.6 0.6 381.4 462.6 0.1 462.7
Deficit for the year 6.7 29.4 (80.5) (44.4) 0.0 (44.4) Other comprehensive income 0.0 0.0 (19.2) (19.2) 0.0 (19.2) Release of endowment and restricted funds spent (2.2) (29.4) 31.6 0.0 0.0 0.0
Total comprehensive income / (expenditure) for the year 4.5 0.0 (68.1) (63.6) 0.0 (63.6)
Balance at 1 August 2019 85.1 0.6 313.3 399.0 0.1 399.1
Surplus for the year 5.4 12.1 33.6 51.1 0.0 51.1 Other comprehensive expenditure 0.0 0.0 (8.1) (8.1) 0.0 (8.1) Release of endowment and restricted funds spent (3.3) (12.1) 15.4 0.0 0.0 0.0
Total comprehensive income / (expenditure) for the year 2.1 0.0 40.9 43.0 0.0 43.0
Balance at 31 July 2020 87.2 0.6 354.2 442.0 0.1 442.1
Total excluding Non - non-controlling controlling University Endowment Restricted Unrestricted interest interest Total £m £m £m £m £m £m
Balance at 1 August 2018 80.6 0.6 388.1 469.3 0.0 469.3
Deficit for the year 6.7 29.4 (76.8) (40.7) 0.0 (40.7) Other comprehensive income 0.0 0.0 (19.2) (19.2) 0.0 (19.2) Release of endowment and restricted funds spent (2.2) (29.4) 31.6 0.0 0.0 0.0
Total comprehensive income / (expenditure) for the year 4.5 0.0 (64.4) (59.9) 0.0 (59.9)
Balance at 1 August 2019 85.1 0.6 323.7 409.4 0.0 409.4
Surplus for the year 5.4 12.1 35.0 52.5 0.0 52.5 Other comprehensive expenditure 0.0 0.0 (8.1) (8.1) 0.0 (8.1) Release of endowment and restricted funds spent (3.3) (12.1) 15.4 0.0 0.0 0.0
Total comprehensive income / (expenditure) for the year 2.1 0.0 42.3 44.4 0.0 44.4
Balance at 31 July 2020 87.2 0.6 366.0 453.8 0.0 453.8
73
Consolidated and University Statement of Financial Position As at 31 July 2020
Consolidated University 2020 2019 2020 2019 Note £m £m £m £m NON-CURRENT ASSETS Tangible assets 13 616.3 606.5 596.7 583.8 Investments 14 89.6 84.5 93.3 103.0 Investment in joint ventures 15 5.8 16.3 0.0 0.0 Investment in associate 16 0.5 0.5 0.0 0.0 712.2 707.8 690.0 686.8
CURRENT ASSETS Assets held for sale 2.5 0.0 2.5 0.0 Stocks in hand 1.0 0.9 1.0 0.9 Trade and other receivables 17 47.0 49.0 61.0 61.4 Short-term liquid deposits 44.1 75.3 44.1 75.3 Cash and cash equivalents 23 96.2 51.9 87.7 40.6 190.8 177.1 196.3 178.2
CREDITORS: AMOUNTS FALLING DUE 18 (145.3) (140.4) (139.8) (135.1) PROVISIONS (2.8) 0.0 (2.8) 0.0
NET CURRENT ASSETS 42.7 36.7 53.7 43.1
TOTAL ASSETS LESS CURRENT LIABILITIES 754.9 744.5 743.7 729.9
CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR 19 (139.8) (142.1) (116.9) (117.2) PENSION PROVISIONS 20 (169.8) (203.3) (169.8) (203.3) OTHER PROVISIONS 20 (3.2) 0.0 (3.2) 0.0
TOTAL NET ASSETS 442.1 399.1 453.8 409.4
RESTRICTED RESERVES Income and expenditure reserve - endowment reserve 21 79.9 78.0 79.9 78.0 Income and expenditure reserve - restricted reserve 22 0.6 0.6 0.6 0.6
UNRESTRICTED RESERVES Income and expenditure reserve - endowment reserve 21 7.3 7.1 7.3 7.1 Income and expenditure reserve - unrestricted reserve 354.2 313.3 366.0 323.7 442.0 399.0 453.8 409.4 NON-CONTROLLING INTEREST 0.1 0.1 0.0 0.0 TOTAL RESERVES 442.1 399.1 453.8 409.4
The accompanying statement of principal accounting policies and notes 1 to 32 form part of these financial statements. The financial statements were approved by Council on 14th December 2020 and signed on its behalf by:
CP Day SJ Lightley RC Dale Vice-Chancellor and President Treasurer Executive Director of Finance
74 Integrated Annual Report 2019-20
Consolidated Cash Flow Statement for the year ended 31 July 2020
2020 2019 Note £m £m CASH FLOW FROM OPERATING ACTIVITIES Surplus / (deficit) before taxation 51.8 (44.2) Taxation (0.7) (0.2) Surplus / (deficit) after taxation 51.1 (44.4) Adjustment for non-cash items Depreciation 13 31.6 28.5 Gain on investments 21 (3.6) (4.9) Increase in stock (0.1) (0.1) Decrease / (increase) in debtors 4.6 (2.1) Increase in creditors 1.8 19.3 Increase in provisions 6.0 0.0 (Decrease) / increase in pension provision (41.6) 89.6 Share of deficit/(surplus)in joint ventures 15 11.7 (2.2) Adjustment for investing or financing activities Investment income 6 (1.9) (2.5) Interest payable 4.0 3.9 Endowment income 21 (0.9) (0.9) Gain on disposal of tangible assets (3.5) 0.0 Impairment of non-current assets 1.7 0.0 Capital grant income (12.2) (29.9) NET CASH INFLOW FROM OPERATING ACTIVITIES 48.7 54.3
CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from sales of tangible assets 7.2 0.0 Capital grants receipts 12.1 29.9 Proceeds from sale of endowment investments 27.2 22.8 Payments made to acquire endowment investments (29.4) (20.1) Investment income 2.1 2.3 Profit distribution from joint venture 0.8 2.7 Payments made to acquire tangible assets (51.0) (133.8) New investment in joint ventures and associate (2.0) (2.7) Decrease in short-term liquid deposits 31.2 33.9 (1.8) (65.0)
CASH FLOWS FROM FINANCING ACTIVITIES Interest paid (1.9) (1.9) Interest element of finance lease (1.6) (2.1) Endowment cash received 21 0.9 0.9 (2.6) (3.1)
INCREASE / (DECREASE) IN CASH AND CASH EQUIVALENTS IN THE YEAR 44.3 (13.8)
Cash and cash equivalents at beginning of the year 23 51.9 65.7 Cash and cash equivalents at end of the year 23 96.2 51.9
75
Notes to the Financial Statements
1 Source of grant and fee income The source of grant and fee income, included in Notes 2 and 3 is as follows:
Consolidated University 2020 2019 2020 2019 £m £m £m £m Grant income from the OfS 28.2 28.0 28.2 28.0 Grant income from other bodies 47.6 43.9 47.6 43.9 Fee income for taught awards 266.9 246.7 252.0 232.3 Fee income for research awards 14.6 11.7 14.5 11.6 Fee income from non-qualifying courses 6.7 6.1 6.7 6.1
364.0 336.4 349.0 321.9
2 Tuition fees and education contracts
Consolidated University 2020 2019 2020 2019 £m £m £m £m Full-time students 169.9 165.2 170.8 165.2 Full-time students charged overseas fees UK taught 94.6 75.9 94.8 75.9 Overseas taught 15.0 14.5 0.0 0.0 Part-time fees 2.0 2.8 0.9 2.8 Research training support grants 4.4 3.5 4.4 3.5 Short courses 2.3 2.6 2.3 2.6 288.2 264.5 273.2 250.0
3 Funding body grants Consolidated and University
2020 2019 £m £m Recurrent grant 63.0 59.6 Specific grants 7.2 6.3 Capital Investment Framework (CIF) grants 5.5 6.0 National College for Teaching and Leadership specific grant 0.1 0.0 75.8 71.9 4 Research grants and contracts
Consolidated and University 2020 2019 £m £m Research Councils 34.2 36.0 UK charities 24.3 26.4 UK government 18.2 20.7 European Commission 11.2 12.6 Other grants and contracts 9.8 13.0 97.7 108.7
76 Integrated Annual Report 2019-20
Notes to the Financial Statements
5 Other income Consolidated University 2020 2019 2020 2019 £m £m £m £m Residences, catering and conferences 17.3 25.3 17.3 25.3
Other services rendered 21.0 19.2 21.0 19.2 Health authorities 8.2 8.4 8.2 8.4 Other capital grants 8.1 20.9 8.1 20.9 Royalty monetisation 0.0 23.6 0.0 23.6 Other income 17.9 19.6 16.7 19.0 Income from subsidiary companies 0.0 0.0 4.8 4.9 72.5 117.0 76.1 121.3
Contained within Other income is an amount of £2.1m which relates to income received under the Coronavirus Job Retention Scheme. 6 Investment income Consolidated University 2020 2019 2020 2019 £m £m £m £m Investment income on endowments (note 21) 0.9 0.9 0.9 0.9 Other investment income 1.0 1.6 1.1 1.6 1.9 2.5 2.0 2.5 7 Donations and endowments
Consolidated and University 2020 2019 £m £m New endowments net of transfers out from expendable endowments (note 22) 0.9 0.9 Donations with restrictions 3.9 2.5 Unrestricted donations 3.3 2.6 8.1 6.0 8 Staff
Consolidated University 2020 2019 2020 2019 £m £m £m £m
Staff Costs Salaries 233.8 227.4 226.3 219.8 Social security costs 22.9 23.1 22.7 22.9
Other pension costs (Note 29) 58.4 50.0 58.4 50.0 Total before pension adjustments 315.1 300.5 307.4 292.7 Movement on USS provision (Note 20) (52.9) 80.2 (52.9) 80.2
RBP Pension service cost adjustment (Note 20) 7.7 7.1 7.7 7.1 269.9 387.8 262.2 380.0
Further audited information and disclosures as required by the OfS Accounts direction are included in the Remuneration Report on pages 62-64.
2020 2019 Average Average Staff Numbers FTEs FTEs Academic 1,715 1,671 Support 3,189 3,059 Research 1,056 1,029
5,961 5,759
77
Notes to the Financial Statements
9 Other operating expenses Consolidated University 2020 2019 2020 2019 £m £m £m £m Professional fees and bought in services 49.6 48.9 49.1 48.1 Staff-related expenditure 18.1 26.5 16.9 25.7 Student scholarships, bursaries and prizes 25.2 26.1 25.1 26.0 Consumables and laboratory expenditure 12.5 18.1 12.2 17.8 Non-capitalised equipment purchases and maintenance 15.0 20.7 14.5 20.3 Operating lease rentals - land and buildings 13.1 8.6 12.9 8.5 Rents, rates and insurance 3.8 4.1 3.1 3.0 Heat, light, water and power 9.6 10.9 9.2 10.4 Building maintenance 7.5 13.5 7.4 13.4 Books and periodicals 6.9 7.1 6.8 7.0 NHS and agency staff 4.5 4.5 4.5 4.5 Communications, advertising and publicity 2.5 3.4 2.0 2.9 Students' Union annual subvention 2.2 2.1 2.2 2.1 Other expenditure 6.5 4.9 7.2 4.9
177.0 199.4 173.1 194.6
Professional fees and bought in services include auditor's remuneration in respect of audit services for the Group of £199,686 to Ernst & Young LLP (2019: £103,786) and for the University of £118,200. (2019: £52,124). In respect of non-audit services remuneration amounted to £7,920 (2019: £8,842) for the Group and University. Operating lease rentals - land and buildings includes an amount of six million pounds (2019: nil) in relation to a provision made in respect of an onerous lease at INTO Newcastle University London LLP. 10 Interest and other finance costs
Consolidated University 2020 2019 2020 2019 £m £m £m £m Loan interest 1.9 1.8 1.9 1.8 Finance lease interest 2.1 2.1 0.0 0.0
Net charge on pension schemes (note 29) 3.6 2.3 3.6 2.3 7.6 6.2 5.5 4.1 11 Analysis of 2019-20 expenditure by activity
Interest Consolidated Other Depreciation and other Staff Operating and Finance Costs Expenses Amortisation Costs Total £m £m £m £m £m Academic schools 177.2 35.0 3.2 0.0 215.4 Academic services 29.9 24.5 0.9 0.0 55.3 Administration and central services 32.3 47.2 0.1 0.0 79.6 Premises 11.3 35.2 18.3 2.1 66.9 Residences, catering and conferences 4.6 7.3 4.1 0.0 16.0 Research grants and contracts 53.5 25.5 0.0 0.0 79.0 Other expenditure (38.9) 2.3 5.0 5.5 (26.1) Total per Statement of 269.9 177.0 31.6 7.6 486.1 Comprehensive Income
Administration and central services and research grants and contracts include £23.0m (2019: £23.6m) and £2.2m (2019: £2.5m) respectively in respect of payments made for bursaries, prizes, scholarships or other similar awards.
78 Integrated Annual Report 2019-20
Notes to the Financial Statements
11 Analysis of 2019-20 expenditure by activity (continued) Interest University Other Depreciation and other Staff Operating And Finance Costs Expenses Amortisation Costs Total £m £m £m £m £m Academic schools 169.5 32.1 4.0 0.0 205.6 Academic services 29.9 24.5 0.9 0.0 55.3 Administration and central services 32.3 47.2 0.1 0.0 79.6 Premises 11.3 34.4 16.1 0.0 61.8 Residences, catering and conferences 4.6 7.3 4.1 0.0 16.0 Research grants and contracts 53.5 25.5 0.0 0.0 79.0 Other expenditure (38.9) 2.1 5.0 5.5 (26.3) Total per Statement of 262.2 173.1 30.2 5.5 471.0 Comprehensive Income Administration and central services and research grants and contracts include £23.0m (2019: £23.6m) and £2.2m (2019: £2.5m) respectively in respect of payments made for bursaries, prizes, scholarships or other similar awards. 12 Taxation
Consolidated University 2020 2019 2020 2019 £m £m £m £m Republic of Singapore corporation tax at 17% (0.1) 0.0 0.0 0.0 Malaysian corporation tax at 24% 0.4 0.3 0.0 0.0 United Kingdom corporation tax at average rate of 19% 0.4 (0.1) 0.0 0.0 0.7 0.2 0.0 0.0
13 Tangible assets
Consolidated Land and Buildings Leasehold Assets under Freehold Long Short Construction Equipment Total £m £m £m £m £m £m Cost Balance at 1 August 2019 489.7 157.9 23.0 101.8 110.1 882.5 Additions 0.0 0.0 0.0 45.8 5.2 51.0 Foreign exchange retranslation 0.0 (1.8) (0.1) 0.0 0.0 (1.9) Transfers from assets under construction 102.7 0.0 0.0 (102.7) 0.0 0.0 Transfers to assets held for resale (8.8) 0.0 0.0 0.0 0.0 (8.8) Disposals (5.1) 0.0 (1.4) (0.2) (2.7) (9.4) Balance at 31 July 2020 578.5 156.1 21.5 44.7 112.6 913.4
Depreciation Balance at 1 August 2019 103.2 74.2 11.9 0.0 86.7 276.0 Charge for year 15.9 4.4 1.1 0.0 10.2 31.6 Foreign exchange retranslation 0.0 (0.1) 0.0 0.0 0.0 (0.1) Transfers to assets held for resale (5.3) 0.0 0.0 0.0 0.0 (5.3) Eliminated on disposals (1.4) 0.0 (1.3) 0.0 (2.4) (5.1) Balance at 31 July 2020 112.4 78.5 11.7 0.0 94.5 297.1
Net Book Value At 31 July 2020 466.1 77.6 9.8 44.7 18.1 616.3
At 1 August 2019 386.5 83.7 11.1 101.8 23.4 606.5
At 31 July 2020, freehold land and buildings included £79.5m (2019: £84.5m) in respect of freehold land which is not depreciated. The net book value of assets held under finance leases at 31 July 2020 is £17.3m (2019: £19.9m) and the related depreciation charge for the year was £0.9m (2019: £0.8m).
79
Notes to the Financial Statements
13 Tangible assets (continued)
University Land and Buildings Leasehold Assets under Freehold Long Short Construction Equipment Total £m £m £m £m £m £m Cost Balance at 1 August 2019 488.6 133.4 20.8 101.7 108.4 852.9 Additions 0.0 0.0 0.0 45.8 5.1 50.9 Transfers from assets under construction 102.7 0.0 0.0 (102.7) 0.0 0.0 Transfers to assets held for resale (8.8) 0.0 0.0 0.0 0.0 (8.8) Disposals (5.1) 0.0 (1.4) (0.2) (2.7) (9.4) Balance at 31 July 2020 577.4 133.4 19.4 44.6 110.8 885.6
Depreciation Balance at 1 August 2019 103.2 69.6 11.3 0.0 85.0 269.1 Charge for year 15.9 3.5 0.8 0.0 10.0 30.2 Transfers to assets held for resale (5.3) 0.0 0.0 0.0 0.0 (5.3) Eliminated on disposals (1.4) 0.0 (1.3) 0.0 (2.4) (5.1) Balance at 31 July 2020 112.4 73.1 10.8 0.0 92.6 288.9 Net Book Value At 31 July 2020 465.0 60.3 8.6 44.6 18.2 596.7
At 1 August 2019 385.4 63.8 9.5 101.7 23.4 583.8
The University holds a number of collections, exhibits and artefacts, most of which have been donated or bequeathed to the University. These assets are not considered Heritage Assets as defined in the SORP and therefore have no value attributed to them in the financial statements. 14 Non-current investments
Consolidated University 2020 2019 2020 2019 £m £m £m £m Shares in subsidiary undertakings at cost less amounts written off At 1 August 0.0 0.0 19.1 19.1
Additions 0.0 0.0 0.0 0.0 Other movements in the year 0.0 0.0 (15.5) 0.0 At 31 July 0.0 0.0 3.6 19.1 Other investments other than loans at cost At 1 August 1.0 0.4 0.4 0.4 Additions 0.0 0.0 0.0 0.0 Other movements in the year (0.7) 0.6 0.0 0.0 At 31 July 0.3 1.0 0.4 0.4
Fixed interest stock and equities relating to endowments 89.3 83.5 89.3 83.5
Total fixed asset investments 89.6 84.5 93.3 103.0
80 Integrated Annual Report 2019-20
Notes to the Financial Statements
14 Non-current investments (continued) Shares In Subsidiary Undertakings Details of the companies, all registered in England and Wales (unless otherwise stated), in which Newcastle University holds an interest are as follows: Holding of Ordinary Name of Company Shares % Nature of Business
NUMed Malaysia sdn bhd 100 A company incorporated in Malaysia for the provision of tertiary courses focusing on medical education.
NUInternational Singapore pte Limited 100 A company incorporated in Singapore for collaborative teaching and research.
Newcastle Research & Innovation Institute 100 A company incorporated in Singapore for pte Ltd. postgraduate teaching and research.
Newcastle University Holdings Limited 100 Operates as a holding company only.
Newcastle University Ventures Limited 100 Provides support for the commercial development of research and consultancy.
Newcastle University Developments Limited 100 Provides construction services to the University.
Newcastle University Pension Trustee 100 Provides a corporate trusteeship for the (1971) Limited University Retirement Benefits Plan.
Newcastle ISC Limited 100 Acts as a holding company for the joint ventures INTO Newcastle University LLP and INTO Newcastle University London LLP.
Newcastle University Enterprises Limited (*) 100 This company is dormant.
NUINTO Limited 51 Provides teaching of English language skills.
(*) For the year ended 31 July 2020 Newcastle University Enterprises Limited (CRN:06331269) was exempt from the requirement to prepare individual accounts by virtue of section 394A of the Companies Act 2006 relating to dormant subsidiaries. University membership in companies limited by guarantee: The Russell Group Newcastle Science Company Limited Universities UK North East Universities Purchasing Consortium (NEUPC) Centre for Innovation Excellence in Livestock Centre for Crop Health and Protection The Academic Health Science Network for the North East and North Cumbria Other investments other than loans
Consolidated University Voting 2020 2019 2020 2019 Rights £m £m £m £m
CVCP Properties PLC 1.3% 0.3 0.4 0.4 0.4 Demuris Limited Preference shares 0.0 0.6 - -
0.3 1.0 0.4 0.4 The University has direct minor shareholdings in a number of other companies, including spin outs, which are not material to these financial statements. Shares in associated undertakings and other investments held by subsidiary companies are disclosed in the financial statements of those companies.
81
Notes to the Financial Statements
15 Investments in joint ventures INTO Newcastle University LLP is a joint venture between the University and INTO University Partnerships Limited. A 50% share of the LLP's net assets and liabilities is included in the University's Consolidated Balance Sheet and 50% of its operating profit or loss is reported in the University's Consolidated Statement of Comprehensive Income. INTO Newcastle University LLP's principal activity is the provision of pre-University education and residential accommodation for international students. At the year end an amount of £166,660 (2019: £nil) was due from INTO Newcastle University LLP to the University. INTO Newcastle University London LLP is a joint venture between the University and INTO University Partnerships Limited. A 50% share of the LLP's net assets and liabilities is included in the University's Consolidated Balance Sheet and 50% of its operating profit or loss is reported in the University's Consolidated Statement of Comprehensive Income. INTO Newcastle University London LLP's principal activity is the provision of education and residential accommodation for students. At the year end an amount of £5,487,685 (2019: £4,601,229) was due from INTO Newcastle University London LLP to the University. Newcastle Science Central LLP and Newcastle Science Central Management LLP are joint ventures between the University and Newcastle City Council. The principal activity of these joint ventures is the sale and lease of land for the development of the Newcastle Helix site. During the year the university made an impairment of £14.6m to its investment in the latter to reflect its share of its net assets and this is reported in the University's Consolidated Statement of Comprehensive Income and the University's interest in the net assets and liabilities of both LLPs is included in the University's Consolidated Balance Sheet. At the year end an amount of £nil (2019: £nil) and £39,569 (2019: £2,329,449) was due from each entity respectively to the University. Newcastle Science Central Developments LLP is a joint venture between the University, Newcastle City Council and Legal & General which aims to market the Newcastle Heilx site to create a global centre for urban innovation in Newcastle. 2020 2019 £m £m
Share of operating surplus / (deficit): INTO Newcastle University LLP 2.8 2.9 INTO Newcastle University London LLP 0.2 (0.5)
Newcastle Science Central LLP 0.0 0.0 Newcastle Science Central Management LLP (14.6) 0.0 (0.1) (0.2) Newcastle Science Central Developments LLP (11.7) 2.2 Share of gross assets: INTO Newcastle University LLP 11.6 13.3 INTO Newcastle University London LLP 2.4 2.3 Newcastle Science Central LLP 2.5 2.7 Newcastle Science Central Management LLP 5.7 18.2 Newcastle Science Central Developments LLP 0.6 0.5 22.8 37.0 Share of gross liabilities: INTO Newcastle University LLP (8.6) (12.4)
INTO Newcastle University London LLP (5.3) (5.3) Newcastle Science Central LLP (2.3) (2.3) Newcastle Science Central Management LLP (0.3 (0.3)
Newcastle Science Central Developments LLP (0.5) (0.4) (17.0) (20.7) Share of net assets / (liabilities): INTO Newcastle University LLP 3.0 0.9 INTO Newcastle University London LLP (2.9) (3.0) Newcastle Science Central LLP 0.2 0.4 Newcastle Science Central Management LLP 5.4 17.9 Newcastle Science Central Developments LLP 0.1 0.1 5.8 16.3
82 Integrated Annual Report 2019-20
Notes to the Financial Statements
16 Investments in associate The University has a 24% holding in Tyne Pressure Testing Limited, whose principal activity is the creation of a Centre of Excellence for Hyperbaric Testing in the Newcastle area. This holding has been treated as an associated undertaking. A 24% share of the company's losses to date is reported in the University's Consolidated Statement of Comprehensive Income and a 24% share of the company's net assets is shown in the University's Consolidated Balance Sheet. At the year end an amount of £500,000 (2019: £500,000) was due from Tyne Pressure Testing Limited to the University.
2020 2019 £m £m
Share of operating deficit 0.0 0.0
Share of gross assets 2.4 2.4 Share of gross liabilities (1.9) (1.9) Share of net assets 0.5 0.5 17 Trade and other receivables
Consolidated University 2020 2019 2020 2019 £m £m £m £m Research grants receivable 15.1 15.2 15.1 15.2 Other trade receivables 19.4 22.1 19.2 22.2 Amounts owed by subsidiary undertakings 0.0 0.0 17.1 15.2 Prepayments and accrued income 10.5 10.5 8.7 8.2 Other debtors 2.0 1.2 0.9 0.6 47.0 49.0 61.0 61.4
Contained within consolidated other debtors is an amount of £475,000 (2019: £500,000) due from Tyne Pressure Testing Limited which is repayable after more than one year 18 Creditors: amounts falling due within one year
Consolidated University 2020 2019 2020 2019 £m £m £m £m Obligations under finance leases (note 27) 2.6 2.2 0.0 0.0 Research collaborator creditors 23.3 21.0 23.3 21.0 Other creditors 3.5 5.3 3.6 5.3 Social security and other taxation payable 11.4 10.0 10.8 9.6 Accruals and deferred income 104.5 101.9 102.1 99.2 145.3 140.4 139.8 135.1
Deferred income Included within accruals and deferred income are the following items of income which have been deferred until specific performance related conditions have been met.
Consolidated University 2020 2019 2020 2019 £m £m £m £m Research grants received on account 48.1 43.7 48.1 43.7 Tuition fees and education contracts 0.8 2.2 0.8 2.2 Funding body grants 1.3 0.3 1.3 0.3 Other income 11.6 10.3 11.6 10.3 Donations 0.2 0.0 0.2 0.0 62.0 56.5 62.0 56.5
83
Notes to the Financial Statements
19 Creditors: amounts falling due after more than one year
Consolidated University 2020 2019 2020 2019 £m £m £m £m Fixed-term, unsecured loan repayable by 2046 100.0 100.0 100.0 100.0 Accruals and deferred income 17.1 17.2 16.9 17.2 Obligations under finance leases (note 27) 22.7 24.9 0.0 0.0 139.8 142.1 116.9 117.2 The fixed term unsecured loan is repayable in accordance with the following profile: Effective Consolidated and Interest University
Rate 2020 2019 % £m £m Infrastructure and refurbishment loan due after one year but not more than five years 1.87% 16.0 12.0
Infrastructure and refurbishment loan due after more than five years 1.87% 84.0 88.0 20 Provisions Pension provisions
Consolidated and University Obligations to RBP defined Total fund deficit on benefit pension USS Pension obligation provisions (note 29) (note 29) £m £m £m At 1 August 2019 125.1 78.2 203.3 (Decrease) / increase in staff costs (52.9) 7.7 (45.2) Pension finance interest charge 2.0 1.6 3.6 Actuarial loss 0.0 8.1 8.1 At 31 July 2020 (note 29) 74.2 95.6 169.8
USS deficit The obligation to fund the past deficit on the Universities Superannuation Scheme (USS) arises from the contractual obligation with the pension scheme to make deficit payments in accordance with the deficit recovery plan. In calculating this provision, management have estimated future staff levels and salary inflation for the duration of the contractual obligation. The adoption of the new recovery plan following the 2018 actuarial valuation has given rise to a significant reduction in the deficit provision in 2019-20 which has decreased from £125.1m to £74.2m. Other provisions As part of the review of operations and future academic viability of the INTO Newcastle University London LLP joint venture, the University has made an onerous lease provision of £6.0m in relation to the London premises. £2.8m of this provision is due to be paid in the next 12 months.
84 Integrated Annual Report 2019-20
Notes to the Financial Statements
21 Endowment reserves
Consolidated and University Unrestricted Restricted Restricted Restricted 2020 2019 Permanent Permanent Expendable Total Total Total £m £m £m £m £m £m At 1 August Capital 2.6 18.5 16.1 34.6 37.2 37.0 Unapplied return 4.5 30.1 13.3 43.4 47.9 43.6 7.1 48.6 29.4 78.0 85.1 80.6
New endowments 0.0 0.0 1.0 1.0 1.0 1.3 Transfer out from expendable endowments 0.0 0.0 (0.1) (0.1) (0.1) (0.4) Increase in market value of investments 0.3 2.0 1.3 3.3 3.6 4.9 Income 0.1 0.5 0.3 0.8 0.9 0.9 Expenditure (0.2) (2.3) (0.8) (3.1) (3.3) (2.2) 0.2 0.2 1.7 1.9 2.1 4.5
At 31 July 7.3 48.8 31.1 79.9 87.2 85.1
Analysis by type of purpose: Regional Chairs Benefaction 0.0 23.7 0.0 23.7 23.7 20.5 Chairs, fellowships, lectureships 0.0 5.7 1.8 7.5 7.5 10.4 Research support 0.0 2.6 5.1 7.7 7.7 8.0 Lectures 0.0 0.8 1.2 2.0 2.0 3.1 Scholarships and bursaries 0.0 7.8 15.1 22.9 22.9 18.1 Prizes and travel awards 0.0 4.1 5.5 9.6 9.6 13.6 General 7.3 4.1 2.4 6.5 13.8 11.4 7.3 48.8 31.1 79.9 87.2 85.1
The Regional Chairs Benefaction is an endowment which funds medical school posts.
Analysis by asset Fixed interest stock and equities 89.3 83.5 Cash and cash equivalents 0.0 0.4 Other current balances (2.1) 1.2 87.2 85.1
22 Restricted reserves
Capital Other grants and grants and 2020 2019 donations donations Total Total Reserves with restrictions are as follows: £m £m £m £m
Balances at 1 August 2019 0.1 0.5 0.6 0.6
New grants 8.1 0.1 8.2 26.9 New donations 0.2 3.7 3.9 2.5 Capital grants utilised (8.2) 0.0 (8.2) (27.5) Expenditure 0.0 (3.9) (3.9) (1.9) Total restricted comprehensive income / (expenditure) for the year 0.1 (0.1) 0.0 0.0 At 31 July 2020 0.2 0.4 0.6 0.6
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23 Cash and cash equivalents
Consolidated University 2020 2019 2020 2019 £m £m £m £m
Cash at bank and in hand 22.7 29.8 14.2 18.5 Endowment bank balances 0.0 0.4 0.0 0.4 Investments maturing less than 73.5 21.7 73.5 21.7 three months after placement
96.2 51.9 87.7 40.6
24 Consolidated reconciliation of net cash At 1 August Cash Other At 31 July 2019 Flows Changes 2020 £m £m £m £m
Cash at bank and in hand: Endowment asset investments (note 21) 0.4 (0.4) 0 0 Others 51.5 44.7 0.0 96.2 51.9 44.3 0.0 96.2 Short-term investments 75.3 (31.2) 0 44.1 Debt due within one year 0.0 0.0 0.0 0.0
Debt due after one year (100.0) 0 0 (100.0) Finance leases due within one year (2.2) 1.6 (2.0) (2.6) Finance leases due after one year (24.9) 0 2.2 (22.7)
0.1 14.7 0.2 15.0
25 Capital commitments
2020 2019 £m £m Commitments contracted at 31 July 23.9 59.9
26 Contingent liabilities
The University has two nomination agreements relating to student accommodation. Both expire in 2021-22 and cover 586 bedrooms. It is impracticable to estimate the full financial effect of these agreements but it is considered to be zero as the cash outflows should be reimbursed by the receipt of student residential income. 27 Lease obligations Consolidated Amounts due under finance leases 2020 2019 £m £m Amounts payable Within one year 2.6 2.2 In two to five years 8.9 9.4 In more than five years 43.9 51.0
55.4 62.6 Less: finance charges allocated to future periods (30.1) (35.5) 25.3 27.1
Annual rentals under operating lease commitments are as follows: 2020 2019 £m £m Leases expiring: In two to five years 0.4 1.8 Over five years 5.6 5.4 6.0 7.2
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28 Adjusted EBITDA and underlying income
Consolidated 2020 2019 Adjusted EBITDA £m £m Surplus / (deficit) before tax 51.8 (44.2)
Gain on investments (note 21) (3.6) (4.9) Movement on USS provision (note 20) (52.9) 80.2 RBP Pension service cost adjustment (note 20) 7.7 7.1 Interest and other finance costs (note 10) 7.6 6.2 Depreciation (note 13) 31.6 28.5
Impairment of investment in joint venture (note 15) 14.6 0.0 Adjusted EBITDA 56.8 72.9
2020 2019 Underlying income £m £m
Total income 544.2 570.6 Royalty monetisation 0.0 (23.6) Capital grants (8.1) (20.9) Underlying income 536.1 526.1
2020 2019 Impact of royalty monetisation £m £m Income 0.0 23.6 Staff costs 0.0 (8.6) Other operating expenses 0.0 (1.9) Net impact 0.0 13.1
29 Pension Arrangements The University participates in two main pension schemes, the Retirements Benefits Plan (1971) (RBP) and Universities Superannuation Scheme Limited (USS). The University also has a small number of staff in the National Health Service Pension Scheme (NHSPS) and in Nest (the Government’s auto enrolment scheme). The total cost of NHSPS was £2.3m (2019: £2.2m). The total cost of Nest was £0.2m (2019: £0.1m). The total pension cost for the University was:
2020 2019 £m £m Contributions to USS 48.2 40.5
Contributions to RBP 7.7 7.2 Contributions to other pension schemes 2.5 2.3 Other pensions cost (note 8) 58.4 50.0
Movement on USS provision (52.9) 80.2 RBP Pension service cost adjustment 6.1 4.0 GMP equalisation 0.0 1.6 Administration costs * 1.6 1.5 Pensions costs included in staff costs 13.2 137.3
Pension finance interest (note 10) 3.6 2.3 Pension cost including pension finance interest 16.8 139.6 Actuarial loss relating to the RBP scheme 8.1 19.2 Total pension cost 24.9 158.8
* Guaranteed Minimum Pension (GMP) is a portion of pension that was accrued by individuals who were contracted out of the State Second Pension prior to 6 April 1997. Historically, there was an inequality of benefits between male and female members who have GMP. A High Court case has confirmed that GMPs should be equalised. An estimated cost of £1.6m (0.5% of opening defined benefit obligation) for the potential cost of GMP equalisation was included as a past service cost in 2019.
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29 Pension Arrangements (continued) RBP RBP is an Exempt Approved Scheme under the Finance Act 1970 and provides benefits based on final pensionable salary; it is established under irrevocable trusts and its assets are kept strictly separate from those of the University. It is a defined benefit scheme. The total pension cost (excluding interest) to the University was £15.4m (2019: £14.3m). The contribution payable by the University was 13.25% of pensionable salaries until 31 March 2019 and 17.25% from 1 April 2019. There were no outstanding contributions at the balance sheet date. The expected current service cost in the next accounting year is £17.3m. A full actuarial valuation was carried out as at 1 August 2016 and updated to 31 July 2020 by a qualified independent actuary. The major assumptions used by the actuary were:
31 July 31 July 2020 2019 Discount rate at year end 1.55% 2.1% Future salary increases 2.9% 3.65% RPI inflation 2.8% 3.15% CPI inflation 2.2% 2.15% Life expectancy of female current pensioners (age 65) 22.8 23.3 Life expectancy of male current pensioners (age 65) 19.5 20.7 Life expectancy of female future pensioners (age 45 currently) 24.0 24.6 Life expectancy of male future pensioners (age 45 currently) 20.6 21.7 The assets in the scheme were:
Value at Value at 31 July Asset 31 July Asset
2020 Allocation 2019 Allocation £m % £m % Equities 116.5 37.0 112.1 38.0 Bonds 95.3 30.0 93.9 32.0 Property 11.2 4.0 11.7 4.0 Absolute return fund 64.7 21.0 58.6 20.0 Cash 25.1 8.0 18.0 6.0 Fair value of assets 312.8 294.3
Present value of obligations (408.4) (372.5) Funded status (95.6) (78.2)
Net pension liability (95.6) (78.2)
Analysis of the amount shown in the Balance Sheet 2020 2019 £m £m Present value of obligations 408.4 372.5 Fair value of plan assets 312.8 294.3 Funded status (95.6) (78.2)
Analysis of the amount charged to operating surplus 2020 2019 £m £m Operating cost Current service cost 13.8 11.2 Administration costs 1.6 1.5 Past service cost 0.0 1.6 Financing cost Interest on net defined benefit liability 1.6 1.3 Total operating charge 17.0 15.6
Amounts recognised in Other Comprehensive Income (OCI) 2020 2019 £m £m Asset gains arising during the year 16.3 27.5 Liability losses arising during the year (24.4) (46.7) Actuarial loss recognised in OCI (8.1) (19.2)
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29 Pension Arrangements (continued) Change in defined benefit obligation 2020 2019 £m £m Opening defined benefit obligation 372.5 313.4 Service cost 13.8 11.2 Interest cost 7.7 8.5 Actuarial losses 24.4 46.7 Past service cost 0.0 1.6 Contribution by members 0.4 0.4 Benefits paid (10.4) (9.3) Closing defined benefit obligation 408.4 372.5
Change in fair value of plan assets 2020 2019 £m £m Opening fair value of plan assets 294.3 262.8 Gains on assets 16.3 27.5 Interest income on plan assets 6.1 7.2 Contributions by employer 7.7 7.2 Contributions by employees 0.4 0.4 Administration costs incurred (1.5) (1.5) Benefits paid (10.4) (9.3) Closing fair value of plan assets 312.8 294.3
USS USS is a hybrid pension scheme, providing defined benefits (for all members), as well as defined contribution benefits. The assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the scheme’s assets are not attributed to individual institutions and a scheme-wide contribution rate is set. The University is therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the underlying assets and liabilities of the scheme on a consistent and reasonable basis. As required by Section 28 of FRS 102 ‘Employee benefits’, the University therefore accounts for the scheme as if it were a wholly defined contribution scheme. As a result, the amount charged to the statement of comprehensive income represents the contributions payable to the scheme in respect of the accounting period. Since the University has entered into an agreement (the ‘Recovery Plan’) that determines how each employer within the scheme will fund the overall deficit, the University recognises a liability for the contributions payable that arise from the agreement (to the extent that they relate to the deficit) and therefore an expense is recognised. The latest available complete actuarial valuation of the Retirement Income Builder (defined benefits) section of the Scheme was at 31 March 2018 (the valuation date) which was carried out using the projected unit method. As at the year end, a valuation as at 31 March 2020 was underway but not yet complete. Since the University cannot identify its share of the defined benefits section of the scheme assets and liabilities, the following disclosures reflect those relevant for the section as a whole. The 2018 valuation was the fifth valuation for USS under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £63.7 billion and the value of the scheme’s technical provisions was £67.3 billion indicating a shortfall of £3.6 billion. The assets therefore were sufficient to cover 95% of the benefits which had accrued to members after allowing for expected future increases in earnings. The key financial assumptions used in the 2018 valuation are described below. Pension increases (CPI) Term dependent rate in line with the difference between the Fixed Interest and Index Linked yield curves, less 1.3% pa Discount rate (forward rates) Years 1-10: CPI +0.14% reducing linearly to CPI -0.73% Years 11-20: CPI +2.52% reducing linearly to CPI +1.55% by year 21 Years 21+: CPI +1.55%
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29 Pension Arrangements (continued) The main demographic assumption used relates to the mortality assumptions. These assumptions are based on analysis of the scheme’s experience carried out as part of the 2018 actuarial valuation: Pre retirement Male members’ mortality 71% of AMC00 (duration 0) Female members’ mortality 112% of AFC00 (duration 0) Post retirement Male members’ mortality 97.6% of SAPS S1NMA ‘light’ Female members’ mortality 102.7% of RFV00 To allow for further improvements in mortality rates the CMI_ 2017 projections with a smoothing parameter of 8.5 and with a 1.8% pa long-term rate for males and a 1.6% pa long-term rate for females were also adopted. The current life expectancies on retirement at age 65 are:
2018 2017 valuation valuation Males currently aged 65 (years) 24.4 24.6 Females currently aged 65 (years) 25.9 26.1 Males currently aged 45 (years) 26.3 26.6 Females currently aged 45 (years) 27.7 27.9
The funding position of the scheme has been updated on an FRS 102 basis:
2020 2019 Scheme assets £63.7bn £67.4bn Total scheme liabilities £67.3bn £79.2bn FRS 102 total scheme deficit £3.6bn £11.8bn FRS 102 total funding level 95% 85%
Key assumptions used are:
2020 2019 Discount rate 0.74% 1.61% Pensionable salary growth 3.02% 3.23%
A new deficit recovery plan was put in place as part of the 2018 valuation. This requires payment of 2% of salaries over the period 1 October 2019 to 30 September 2021 at which point the rate will increase to 6%. In accordance with the requirements of FRS 102 and the SORP, the University has made a provision for the contractual commitment to fund the past deficit. The University has used the deficit modeller developed by the British Universities Finance Directors’ Group (BUFDG) and USS to calculate the provision to be made for the future obligation to make deficit recovery payments. The liability has decreased from £125.1m to £74.2m as set out in Note 20. The total pension contribution cost for the University was £48.2m (2019: £40.5m). There were £4.3m (2019: £3.8m) outstanding contributions at the balance sheet date. In September 2020, the Trustee of the USS Pension Scheme (USS) launched a consultation with Universities UK on key aspects of the scheme's 2020 valuation. The scope of this exercise covers a wide range of potential outcomes - reflecting issues still to be resolved on employer support as well as uncertainties for the higher education sector and financial markets in general - but, based on the proposals put forward, the Trustees have indicated that the fund's deficit at 31 March 2020 could range from between £9.8bn and £17.9bn. This would represent a significant deterioration from the £3.6bn deficit established under the 2018 valuation (and against which the current recovery plan is set) and a return to the levels of shortfall experienced under the previous 2017 valuation (£11.8bn). At this stage, an outome is far from agreed and the USS Trustee has until 30 June 2021 to conclude the valuation. As an early indication of the scale of impact though, it has been estimated that the cost of continuing to offer current benefits in this context could reach between 40.8% to 67.9% of payroll. However, this is range is purely an illustration and is before any other measures are considered to reduce the deficit and is still being widely debated across the sector and by the Trustee of the Pension Scheme.
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30 Related Parties Due to the nature of the University's operations and the composition of its Council (being drawn from local public and private sector organisations) it is inevitable that transactions will take place with organisations in which a member of Council may have an interest. All transactions involving organisations in which a member of Council or Executive Board may have an interest are conducted at arm's length and in accordance with the University's financial regulations and normal procurement procedures. Details of transactions, where material, are shown below. Council members did not receive any remuneration in respect of their service to Council during the year. The amount paid to lay members of Council in respect of out of pocket expenses during the year amounted to £4,101 (2019: £10,560). The University does not have any connected institutions, as defined by the Charities Act 2011, Schedule 3, paragraph 28.. (Income) / Debtor / (creditor) Nature of transaction / relationship Expenditure balance 2020 2019 2020 2019 £m £m £m £m
Joint ventures, associates and spin outs INTO Newcastle University LLP 0.7 0.9 0.2 0.0 Net fees for English language support and other services. Newcastle University INTO -0.1 -0.5 5.5 5.8 Start-up loan and trade debt. London LLP Newcastle Science Central -0.8 -5.8 0.0 2.3 Recharges for Infrastructure works. Management LLP Demuris Limited 0.1 0.0 0.0 0.0 Loan to spin-out and trading. Alcyomics Limited -0.1 -0.1 0.0 0.1 Loan to spin-out and trading. INEX Microtechnology Limited 0.0 -0.1 0.1 0.3 Loan to spin-out and trading.
Other organisations Newcastle University Students' 1.9 1.8 0.0 0.0 Students’ Union subvention and fees for Union other services. The University of Newcastle -2.2 -2.2 0.0 0.0 Endowment income distribution. upon Tyne Development Trust The Newcastle upon Tyne -6.9 -7.7 3.0 1.8 NHS/academic staff recharges. Hospitals NHS Trust International Centre for Life 3.1 2.9 0.0 0.0 Rentals payable.
Council and Executive Board members Russell Group 0.1 0.1 0.0 0.0 Subscription. Universities UK 0.1 -0.1 -0.1 -0.1 Subscription/Science Without Borders. Parkinson’s UK -0.2 -0.2 0.1 0.1 Research funding. Northern Health Science -0.9 -0.9 0.0 0.0 Research funding. Alliance Ltd British Heart Foundation -0.8 -0.7 0.2 0.0 Research funding. Medical Research Council -8.7 -8.6 0.1 0.0 Research funding. EPSRC -17.5 -24.0 0.0 0.0 Research funding. Academy of Medical Sciences -0.2 -0.2 0.0 0.0 Research funding. Northumberland College 0.0 0.2 0.0 0.0 OfS funded North East Collaborative Outreach Project
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31 Access and Participation Plan expenditure
2020 £m Access investment 4.7 Financial support 9.0 Disability support (excluding expenditure included in the two categories above) 1.6 Research and evaluation 2.6
17.9 All of the expenditure is included in the financial statements and other notes. £6.5m of these costs are staff costs included within Note 8. Research and evaluation expenditure includes £2.4m expenditure on student success and progression. Our Access and Participation Plan for 2019-20 can be found on our website. 32 Events after the reporting period On 25 November 2020, the University concluded agreements with INTO University Partnerships Limited (IUP), whereby IUP would retire as a member of Newcastle University INTO London LLP (NUL) with effect from 30 November 2020. The University intends to complete a teach out of the programmes offered by its London operation by the end of the 2020-21 academic year, at which point NUL will cease trading and be wound up. Students affected by the decision will be supported in accordance with the University’s Student Protection Plan and consultations have commenced with affected employees and their recognised trade unions. The financial impact of these decisions will be reflected in the 2020-21 financial statements but is not expected to be materially different in quantum from the onerous lease provision recognised in 2019-20 (see Notes 9 and 20).
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We would like to thank the following for the use of their photographic material: Ayesha Dharker; John Donoghue; Tommy Howell; Zoe Martin
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94 Integrated Annual Report 2019-20