Annual Report and Accounts for the Year
Total Page:16
File Type:pdf, Size:1020Kb
Annual Report and Accounts for the Year to 31 July 2020 www.ed.ac.uk Our vision and purpose Our graduates, and the knowledge we discover with our partners, make the world a better place. As a world-leading research-intensive University, we are here to address tomorrow’s greatest challenges. Between now and 2030 we will do that with a values-led approach to teaching, research and innovation, and through the strength of our relationships, both locally and globally. Table of contents Overview Financial review 01 Headlines of 2020 31 Director of Finance’s foreword 03 Senior Lay Member of Court’s foreword 34 Financial review 04 Principal’s welcome 06 Our approach to reporting 07 Material issues Governance 41 Corporate governance statement 52 Independent auditors’ report to the Court Strategy and value model of the University of Edinburgh 09 Our strategy 12 Our value model Financial statements 14 Understanding our risks 54 Consolidated and Institution statement of comprehensive income and expenditure Operational review 55 Consolidated and Institution statement of 18 Operational review changes in reserves 56 Consolidated and Institution balance sheet 57 Consolidated statement of cash flows 58 Notes to the financial statements 97 Five-year summary (unaudited) Headlines of 2020 Overview University world league table position Our position in both the QS and QS 20th THE world rankings is unchanged in the year. THE 30th Strategy and value model Total income (£m) In 2019/20 our total income grew 2020 1,125 by 2.2 per cent year on year. Our total income was impacted by the 2019 1,102 effects of Covid-19 on some of our key income streams. 2018 984 Operating surplus for reinvestment (£m)* Operating surplus reduced by 2020 48 (4.2%) 22 per cent in the last year reflecting Operational review the unprecedented challenges we have 2019 61 (5.5%) faced in 2020 as a result of the Covid-19 pandemic. 2018 27 (2.7%) Student numbers including Online Distance Learning The proportion of the University’s 2020 44,510 students from outside the UK was 49 per cent in 2019/20. 2019 43,380 2018 41,312 Financial review Endowment fund value (£m) The University’s annual return on 2020 489 its endowment fund was 5.6 per cent. Most of the endowments are 2019 460 restricted in nature and must be spent on the purposes it was donated for. 2018 424 Net cash flow from operating activities (£m) The fall in operating cash flow is Governance 2020 41 mainly due to the reductions seen in some of our key income streams in 2019 63 2020 as a result of Covid-19. 2018 55 Capital expenditure (£m) In line with Government guidelines in 2020 104 response to the Covid-19 pandemic all capital projects that were viable to be 2019 145 paused were put on hold. This is reflected Financial statements in our lower capital spend in 2019/20. 2018 186 * Surplus after excluding non-cash staff costs relating to pensions. Annual Report and Accounts 2019/20 1 2 Annual Report and Accounts 2019/20 Senior Lay Member of Court’s foreword Overview Despite there being a number of pressing We have met the Commission for Widening issues over the course of the year: the Access targets of 10% of our intake to come Covid-19 pandemic; the UK formally exiting from the 20% most deprived areas in Scotland the EU and entering a transition period; three years ahead of schedule, and we will and the Black Lives Matter movement, continue to work hard in this area, making at The University of Edinburgh we have education and employment an achievable risen to the challenge of addressing goal for more people in Scotland and beyond. these issues by utilising our expertise, Strategy and value model It is estimated that Scotland needs around questioning our own role in these matters 13,000 extra workers each year with data and finding practical steps we can take skills as the workplace is transformed. The as a civic institution to improve society. City Region Deal will allow us to utilise the The impact of the Covid-19 pandemic University’s strengths in data science that has been felt across all aspects of have been driving innovation in the public University life. Key income streams have and private sectors for the past decade been drastically reduced, including our and more. It will give us the capacity to residences and catering income streams do more across a wider range of sectors, which has reduced by £11m in 2019/20 including healthcare, robotics and fintech. when compared to last year. Despite this, Our position on the global stage was we delivered a positive operating surplus reaffirmed this year in the renowned QS World for reinvestment in University activities, University Rankings, maintaining our place Janet Legrand with our revenue exceeding £1.12bn. as fifth in the UK and 20th worldwide. We Operational review Senior Lay Member of Court Looking forward, we will need to be resilient, are one of the world’s top research-intensive adaptive and find resourceful solutions whilst universities, ranked fourth in the UK for not losing sight of our values: our people research power (Times Higher Education, are our first priority. This encompasses the Overall Ranking of Institutions), with 83% As I read over all we have people in the many communities that the of our research activity classified as world- achieved over the last year, University is part of – academic, student, leading or internationally excellent in the most alumni, international, local and many more recent Research Excellence Framework, it reminds me of just how – and we do not take this responsibility and we are well underway in our preparation remarkable a collection lightly. The University’s new Strategy 2030 for the next assessment round in 2021. of people can be when reinforces this commitment to delivering I’d like to thank Anne Richards, who stepped positive change locally, regionally and globally. down from her position as Vice Convenor of they are connected by Court on the 31 of July 2020. A graduate of An increased focus on our civic responsibility the University of Edinburgh, Anne has devoted Financial review a common passion for is more important than ever, and our ambitious a huge amount of energy, knowledge and Social and Civic Responsibility Delivery Plan learning and the pursuit dedication to the University and the wider approved in April 2020 demonstrates how world in her time here as a Court member. of knowledge. we will deliver on key commitments, including becoming carbon neutral by 2040. We have Looking to the future, I am confident in our returned our carbon emissions to below ability to contribute to making the world baseline levels from 2007-08 by investing in a better place and that we can, and will, energy efficiencies and low carbon energy. emerge strongly from current uncertainties. “...we will need to be resilient, Governance adaptive and find resourceful solutions to this new economic backdrop whilst not losing sight of our values: our people are our first priority. Financial statements Annual Report and Accounts 2019/20 3 Principal’s welcome Within that context, the University’s ‘Strategy Our focus on equality, diversity and inclusion in 2030’ is confirmed as not just a document our University community will be supported with but a collective culture and set of principles further investment of time, effort and money that has steered our thinking and enabled over the next three years. It is my genuine belief us to navigate and, in many ways, flourish that our diverse backgrounds, experiences through this ever-changing environment. and characteristics make us better at what we The Covid-19 pandemic has presented do here at Edinburgh. However we are not yet substantial challenges across all sectors and diverse enough as a community. Variety widens geographies. The higher education sector is no our collective perspective and improves our exception and we now operate amidst huge teaching and research abilities that position us medical, social and economic uncertainty. on the global stage. We are a cosmopolitan community and are always seeking to invest We acted quickly and adopted new thinking and develop in our international alliances. about how we operate as a University; how we continue to support and deliver services The UK formally left the European Union on to our student base at home and abroad; the 31 January 2020 and as I have emphasised wellbeing of our staff and students and the before, no political change will take away the community in which we all live; the continuation commitment of the University of Edinburgh to of our teaching and research endeavours internationalisation, both within and beyond and how we can support Edinburgh and Europe. We will build on our strong international the surrounding areas through this crisis. networks and establish new partnerships. One The fact that we have responded as quickly example is that we are one of only three UK Professor Peter Mathieson and comprehensively as we have done is a universities to be part of successful applications Principal and Vice-Chancellor superb tribute to the University of Edinburgh to the first round of the “European University community. We already knew that we had a lot Alliances” scheme announced last year. The of talent and dedication at the University, but the new alliance of which we are part is called extraordinary efforts made by so many people Una Europa and was formally launched in I stated in my Welcome across our university community to adapt to the Brussels in January 2020. We will take this and in last years’ Annual rapidly changing circumstances, and ensure other opportunities to emphasise our strong the safety and support of our students and commitment to Europe and we will continue Report and Accounts that staff, have been nothing short of inspirational.