Russell group universities have faced criticism in recent days after the telegraph reported that between the 24 universities a surplus of £2.2 billion was held. During the pandemic these same universities were handed £115 million as part of the furlough scheme, brought in to help pay the wages of staff members. This has led to discontent from students who have already felt hard done by due to the handling of the pandemic by universities.
The increase in this income is in part due to the increase in students being accepted in to university after the fiasco of grade inflation of A-Level results, after students were given their grade based on a computer programme, leading to uproar. Students were then disproportionately achieving high A-Level grades, which led to a much higher acceptance rate at universities.
Recently the University of Manchester released its financial report which stated that in 2021, the university was operating at a surplus of £61 million. This is higher than previous years, with £5 million surplus in 2019/20 and £50 million in 2018/2019.
When asked about its operating surplus, a University of Manchester spokesperson outlined the nature of this surplus operating cost. They made the point that “Whilst it had improved from the previous year, it is only 5.6% of our income. We need to be able to generate at least 10% operating cash surplus in order to invest in the future of our students.”
They point to a section on financial sustainability in their report which states: “Due to the current funding environment, the rising costs we face and the growing demands on us as a successful teaching and research-intensive institution, we need to generate a surplus of about 10% of income each year to meet growing demands and deliver on our ambitions.”
Explaining what this meant in terms of surplus they stated: “Essentially our surplus reflected the fact that student recruitment had improved for 2020/21 but also that, in response to the pandemic, we had implemented very strict cost controls such that a lot of expenditure was halted or was deferred into subsequent years.”
On the furlough scheme, the spokesperson expanded by stating that the university received £3.7 million in the academic year which ended 31 July 2021, and £9.7 million in the previous year in the Coronavirus job retention scheme.