LONDON’S GLOBAL UNIVERSITY Annual Report and Financial Statements for the year ended 31 July 2018 UNIVERSITY COLLEGE LONDON ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2018 CONTENTS Page 1 Committee Membership 2 Financial Summary 3 Operating and Financial Review 12 Corporate Governance 14 Responsibilities of the Council of UCL 15 Independent Auditor’s Report to the Members of the Council of UCL 17 Consolidated and University Statement of Comprehensive Income and Expenditure 18 Consolidated and University Statement of Changes in Reserves 19 Consolidated and University Balance Sheet 20 Consolidated Cash Flow 21 Statement of Accounting Policies 27 Notes to the Accounts UNIVERSITY COLLEGE LONDON ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2018 COMMITTEE MEMBERSHIP Council (Trustees) External Mr Ven Balakrishnan to (31/12/17) * Mr Turlogh O’Brien (from 31/01/18) Members: Mr Dominic Blakemore Lord (John) Sharkey (from 01/10/17) Dr Andrew Gould Mr Philip Sturrock (Treasurer) Dame DeAnne Julius * (Chair) Mr Justin Turner QC (from 01/10/17) Ms Nahid Majid Baroness (Jo) Valentine* Mr Simon Melliss (to 30/09/17) Baroness (Diana) Warwick (to 30/09/17)* Ms Lindsay Nicholson* Academic Professor Michael Arthur* (Provost) Dr Martin Fry Members: Professor Lucie Clapp* Professor Patrick Haggard (from 01/10/17) Professor David Coen (to 30/09/17) Dr John Hurst (to 30/09/17)* Professor Annette Dolphin* Dr Hynek Pikhart (from 01/10/17)* Professor Andrew Wills UCL Union: Ms Sarah Al-Aride (to 14/07/18) Mr Mohammed Hamza Jamshaid (to 14/07/18) Mr Farook Dean (from 15/07/18) Mr Mahmudur Rahman (from 15/07/18) Finance Committee External Dr Andrew Gould (from 01/10/17) Dr Gill Samuels (to 30/09/17) Members: Dame DeAnne Julius Mr Richard Smothers (to 30/09/17) Mr Philip Sturrock (Chair) Ms Sarah Whitney Academic Professor Michael Arthur (Provost) Professor Patrick Haggard (from 01/10/17) Members: Professor Stephanie Bird (to 30/09/17) Professor Alan Smith (to 30/09/17) Professor Lucie Clapp (from 01/10/17) Audit Committee External Mr Dominic Blakemore (Chair) Mr Patrick Reeve Members: Mr Ven Balakrishnan (to 31/12/17) Mr Justin Turner (from 31/01/18) Mr Turlogh O’Brien (from 05/06/18) Academic Professor Andrew Wills Members: Investments Committee External Mr Chris Hills Mr Philip Sturrock (Chair) Members: Ms Jumana Saleheen (from 26/06/18) Ms Sarah Whitney Staff Members Mr Philip Harding UCL Union: Mr Mohammed Hamza Jamshaid (to 14/07/18) Mr Mahmudur Rahman (from 15/07/18) denotes also member of Remuneration and Human Resources Strategy Committee * denotes also member of Nominations Committee 1 UNIVERSITY COLLEGE LONDON ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2018 FINANCIAL SUMMARY 2018 2017 £m £m CONSOLIDATED INCOME & EXPENDITURE ACCOUNT 521.1 460.6 Tuition fees and education contracts 227.3 194.6 Funding body grants 476.3 459.8 Research grants and contracts 193.4 185.4 Other income 6.0 6.4 Investment income 27.0 20.6 Donations and endowments NET INCOME 1,451.1 1,327.4 TOTAL EXPENDITURE 1,317.5 1,255.3 Loss on disposal of fixed assets (0.1) (0.2) Gain on investments 24.1 12.2 Share of operating loss in joint ventures and associates (0.1) (1.8) Taxation (1.1) (2.1) TOTAL COMPREHENSIVE INCOME FOR THE YEAR 156.4 80.2 Intangible assets 24.8 16.4 Fixed assets 1,876.7 1,707.6 Investments 254.2 222.4 Net current liabilities (110.8) (38.6) Total assets less current liabilities 2,044.9 1,907.8 Non-current liabilities (472.4) (483.5) Pension provisions (130.6) (150.3) Other provisions (17.8) (6.4) TOTAL NET ASSETS 1,424.1 1,267.6 Represented by: Endowments 117.8 111.4 Reserves 1,306.2 1,156.0 Minority interest 0.1 0.2 1,424.1 1,267.6 OTHER KEY STATISTICS (Decrease)/increase in cash in the year (14.1) 96.1 Average student numbers 41,539 39,473 Average payroll numbers 15,107 14,568 2 UNIVERSITY COLLEGE LONDON ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2018 OPERATING AND FINANCIAL REVIEW Operating and Financial Review 2017-18 The financial statements of UCL are prepared in accordance with the “Statement of Recommended Practice: Accounting for Further and Higher Education 2015” and with reference to the “Office for Students (OfS) Regulatory Notice 2: Regulation up to 31 July 2019 of providers that were previously funded by the Higher Education Funding Council for England (HEFCE)”. The OfS is also acting on behalf of the Charity Commission as the principal regulator of UCL as an exempt charity, in accordance with the Charities Act 2006. The financial statements include the consolidated results of UCL’s subsidiary companies, details of which are shown at Note 27. These accounts have been prepared on a going concern basis as described in section 1 of the Statement of Accounting Policies. The Operating and Financial Review for 2017-18 comprises five sections covering: 1) UCL’s vision and long-term strategy (UCL2034); 2) Performance in 2017-18 in pursuit of this strategy in the core areas of research, education, innovation and enterprise; 3) The financial review and outlook; 4) UCL’s approach to risk management 5) How UCL delivers public benefit. Vision and long-term strategy UCL, London’s Global University, is a diverse intellectual community which is engaged with the wider world and committed to changing it for the better. It is recognised globally for its radical and critical thinking and its widespread influence, and exercises an outstanding ability to integrate its education, research, innovation and enterprise to transform how the world is understood, how knowledge is created and shared, and the way that global problems are solved. In pursuit of this vision, UCL’s strategy - titled UCL 2034 - articulates six Principal Themes: 1. Academic leadership grounded in intellectual excellence 2. A global leader in the integration of research and education, underpinning an inspirational student experience 3. Addressing global challenges through its disciplinary excellence and distinctive cross-disciplinary approach 4. An accessible, publicly engaged organisation that fosters a lifelong community 5. London’s Global University: in London, of London and for London 6. Delivering global impact through a network of innovative international activities, collaborations and partnerships UCL’s Key Enablers to achieve these themes are: A. Giving our students the best support, facilities and opportunities B. Valuing our staff and delivering on equality and diversity C. Financing our ambitions D. Delivering excellent systems and processes in support of our vision E. Maintaining a sustainable estate to meet our aspirations F. Communicating and engaging effectively with the world Progress against these Principal Themes and Key Enablers is monitored by the executive and by Council, and performance highlights over the year are presented below. Performance in 2017-18 Theme 1: Academic leadership grounded in intellectual excellence Enduring intellectual excellence – derived from talented individuals’ curiosity about, and commitment to, their chosen subject areas – is the prerequisite of academic leadership. This, more than anything, underpins the contributions that a university makes to society. At UCL, such leadership is manifested by our academics in many ways, including but not limited to: contributions to the intellectual life of their discipline, developing novel lines of enquiry and pioneering innovative teaching programmes, extending the knowledge of their subject to the wider community and engagement in new types of cross-disciplinary collaboration. Within the year: 3 UNIVERSITY COLLEGE LONDON ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2018 OPERATING AND FINANCIAL REVIEW League table outcomes reconfirmed UCL’s world status. It was placed 7th in the 2018 QS world rankings (3rd in the UK) and rose to 14th place in the Times Higher Education (THE) rankings issued in September 2018, from 16th in 2017. Two UCL professors, Professor John Hardy and Professor Bart De Strooper, won the 2018 Brain Prize, the world’s most valuable prize for brain research, for their groundbreaking research on the genetic and molecular basis of Alzheimer’s disease. Six UCL scientists were elected as Fellows of the Royal Society for their exceptional contribution to science and three UCL academics were made Fellows of the British Academy in recognition of their outstanding research in the humanities and social sciences. The Provost was elected to the board of the League of European Research Universities (LERU), a prominent advocate for the promotion of basic research at European research universities and the significant benefits that frontier research plays in the innovation process and progress of society. A number of UCL academics were honoured in the New Year and Queen’s Birthday honours lists. Professor Terence John Stephenson, a consultant paediatrician and chair of the General Medical Council (GMC) from 2015 to 2018, was knighted for services to healthcare and children’s health services. He is currently the Nuffield Professor of Child Health at UCL. Professor Jane Dacre, President of the Royal College of Physicians and Professor of Medical Education at UCL, was made a dame, receiving a DBE for services to Medicine and Medical Education. In addition, two staff received CBEs, two OBEs and one an MBE. UCL also continues to seek out and recruit exceptional intellectual leaders. Notable new recruits in recent months include: Professor Sasha Roseneil as the new Dean of Social & Historical Sciences; Professor Diane Koenker as the Director of the UCL School of Slavonic & East European Studies; Professor Rick Livesey, the incoming Professor of Stem Cell Biology who will be based in the Zayed Centre for Research into Rare Disease in Children; and Professor Anthony David, the inaugural Director and Sackler Chair of the UCL Institute of Mental Health.