43741 UniUK Patterns 8
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Section C Financial aspects of diversity
163 This year’s themed section of Patterns goes into more detail about some of the sector’s financial indicators. It elaborates on some of the financial indicators and trends described in section A and B with the aim of providing a more comprehensive assessment of the financial diversity of the UK higher education sector. The new section compares a number of financial indicators for the period between 2002/03 and 2006/07 and identifies the main trends. It looks at the following aspects of the finances of higher education institutions:
p revenue p expenditure p capital investment in the estate p endowments p liquidity p surpluses and deficits 23 In this chart, the ‘Other’ category includes otherwise unattributed items in the funding councils’ grants, and also includes catering, etc.
Chart 4 Major income sources of UK higher education institutions, 2006/07
Revenue 164 The following pie chart shows the major sources of income across all higher education institutions in the UK in the most recent year, 2006/07.23
Endowments & investments 2%
Other 13%
Other operating income 5%
Funding council T grant 25%
Other services 6%
Other RGC 4% Funding council R grant 8%
Research grants from government 3% Research grants from UK charities 4% Research grants from Research councils 5%
UK/EU student fees 17% Non-EU student fees 8%
165 This chart shows that almost exactly 50 per cent of the income of higher education institutions in the United Kingdom currently comes from the teaching and research grants of the funding councils, together with fees from UK and EU students. The total income from research grants from the research councils, UK charities and the government (excluding the funding council research grant) and from contracts constitute 16 per cent of all income. However, there is a great deal of variation in the significance of different income sources from one institution to another. Funding council teaching grant as a percentage of total income 166 As chart 4 above indicates, the teaching grant from the funding councils represents the largest single source of income to higher education institutions, making up almost
Universities UK
Patterns of higher education institutions in the UK: Eighth report
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