Heads & Managers Forum Finance Update 22 April 2016

Presentation Items 2 Funding Environment for Higher Education 2016 UCC Recent Financial Performance Infrastructural Funding & EIB Loan

Higher Education Funding was first year amount voted for HE did not fall in 7 years Increased by 0.6% year on year to €928m However increasing participation resulted in a higher “ Free Fee” requirement As a result overall State Grant moved by just €55k / 0.01% from €517.48m to €517.53m UCC Grant slightly up on last year due to higher FTE and Research income 2017 CER published – only allows for increases for HE associated with Lansdowne Road National Review on Funding ( Cassells ) to address funding model – yet to be published Now likely to be referred to Oireachtas Committee on Education

Higher Education Funding Failure to address funding model now resulting in real financial difficulties for sector Pressures over past number of years have now turned into problems 4 IoTs’ on “life support” during 2014 TCD have incurred significant deficits on its GAAP accounts for past two years – c€45m UCC has its own challenges given historic underfunding of Dentistry and previous recurrent account deficit Only existing capital contracts are now supported Unlikely now to be any change to funding model for 2-3 years- continue to focus on FTE with greatest return – eg Non EU UG.

UCC 2010 / 11 – 2014 / 15 5

Infrastructural Funding 6 Capital plan published last year set aside average €1m per annum for next 5 years for state capital support for HE UCC estate €555m – at HEFCE norm 3% replacement – cap exp. should be a minimum €16m Peaked at capital spend in 2009 at €90m Maintenance funding has also been stopped by state – formerly €3.6m As result previous GB reviewed infrastructural requirements and requested FC to propose loan funding model to finance same GB approved formal application to EIB for loan facility in Oct 2015 EIB Board approval in Dec 2015

EIB Projects & Funding Source 7 EIB advantages – interest rates, length of term and long term relationship Only projects with a dedicated identified funding stream included for EIB financing – ie must have an ability to generate income to service loan Approved projects and funding Sources 1. Student Accommodation – U Hall S.50, VC2, Additional 300 Beds ( Rental Income) 2. Student Hub – GB approved in 2014 ( SFS Financing ends and Repeat Fee Income) 3. Infrastructure Estate & Digital - GB B & E report approved and referred to FC ( Financed via Existing maintenance & refurbishment Spend ) 4. CSIP/ Western Campus – First Building and adjacent sport ( Rental income & extension to capitation levy) 5. Health Innovation & Dentistry ( GED income & ending of existing Brookfield loan) 6. WGB - including for matching purposes ( already previously funded ) Total amount from EIB €100m / 5 years with a further €70m matching – primarily student accommodation Future borrowing and Cash position assessed by FC, HEA and EIB before finalising any offer

Thank You & Questions Finance - H & M Forum 8