Overview of financial performance 2014/15 Bob Scruton Chair of the Finance and Resources Committee 22 nd January 2016

Court Meeting – 2014/15 Financial Results Financial highlights 2014/ /152013/14% Change £m Income235)215)+9.3% Expenditure – Staff Costs Expenditure – Other (125) (98) (117) (91) +6.6% +7.8% Surplus12)7)7) Cuts in recurrent HEFCE teaching funding of £7.2m Tuition Fees up £24.4m (21%) Scholarships and fee waivers for students £19m Strong residences / catering activities generated £2.5m for re-investment Staff costs represent 53.1% of income (13/14: 54.3%) Page 2

Financial highlights 2014/15 - Balance sheet Court Meeting – 2014/15 Financial Results Strong balance sheet position Cash / investments equivalent to 132 days expenditure (2014: 85 days) Debt increased to 41% of income (2014: 23%) Capital expenditure of £44m (2014: £31m) * Available reserves are made up of total cash plus 90% of investments. As at 31 July Movement £m Fixed Assets Net Current Assets Net Assets Available Reserves* Page 3

How we spend our money Court Meeting – 2014/15 Financial ResultsPage 4

Court Meeting – 2014/15 Financial Results Capital expenditure 2014/15 £44m total spend in 2014/15 (2013/14: £31m)  Templeman Library extension & improvements work - £9.3m  KBS/SMSAS Academic Building - £4m  Other Major Developments - £2.7m  Learning, teaching, social spaces and systems - £9.3m  Infrastructure improvements - £0.8m  Student residences/catering refurbishments - £4.9m Page 5 New Academic Building to accommodate the Kent Business School and School of Mathematics, Statistics and Actuarial Science Budget: £37m Start on site 2015; Due for completion December 2016 Business plan based on past and future student number growth Partly funded by successful application for HEFCE STEM Teaching Capital grant (£5m)

Capital expenditure – Future Plans Law Clinic / Mooting Chamber Budget: £5.5m Start on site spring 2015; Due for completion spring 2016 Partly funded by donations (£2.5m) matched by University Court Meeting – 2014/15 Financial ResultsPage 6 £238m planned over next five years to 2019/20 including:  Completion of existing major projects (£64m)  Further new academic building  Student Administration building

Financial Outlook Budgeted surplus in 2015/16 of £6m  Further reduction in the real value of fees  Staff cost pressures (e.g. pensions/ NIC)  HEFCE teaching funding cuts  Efficiency savings being sought Budgeted capital expenditure for year £84m Planned reduction in cash reserves Increased Home/EU admissions Overseas recruitment sound but challenging Financial performance to date - on track Further financial squeeze in 2016/17 Court Meeting – 2014/15 Financial ResultsPage 7

Future challenges Impact of Comprehensive Spending Review Demographic reduction in year-olds Compliance burden / competition for overseas students Impact of graduate debt level on PG recruitment Tough research environment Increasing costs of construction Further financial pressures on pension schemes Changes in accounting standards from 2015/16 Impact of Green Paper and introduction of the TEF Forthcoming referendum on EU membership Page 8Court Meeting – 2014/15 Financial Results

Conclusion Strong financial performance in 2014/15 Healthy Balance Sheet with high cash reserves Budgeted surplus for 2015/16 of £6m Academic reputation increasing Challenging economic & competitive environment Continuing to invest in the future Well placed to meet the future challenges Court Meeting – 2014/15 Financial ResultsPage 9