Higher education institutions provide a long-term contribution to the UK economy by training graduates that are ready for the workplace, while providing valuable research and innovation. According to the Higher Education Statistics Agency (HESA), in 2016-17 the higher education sector had an income of over £35.7bn, and a total expenditure of over £34.5bn.
Since the cap on tuition fees was lifted, institutions’ income has risen, and so has their spending. With a more competitive educational environment, students expect a return on their investment and want to know exactly what their money is being spent on.
The HESA reveals that institutions spend over half of their income on academic departments and research grants and contracts – in total, 55%. Institutions channel a significant portion of their steadily increasing income into the quality of their teaching and research. Remaining expenditure is spread over operations, premises, academic services, residences and catering. This spending which also contributes to the quality of staff and students’ day-to-day experience.
Some might argue the tangible, real-life value of spending this much on academia and research. This value can be measured – in September 2018, the Higher Education Commission (HEC) revealed that universities contributed £20bn a year to the UK’s GDP – the second largest contribution in the UK (financial services being the first).
The UK higher education sector contributes to the economy in different ways. Statistics show that financially, it is in a good place and can afford to invest in the quality of service that it provides. However, it is important to remain sustainable through wise spending, explaining why institutions are grouping together to share the cost of procuring services. This is a responsible financial move and ensures consistency between institutions for students, now and in the future.
We’re working with our clients to ensure that their sharing the costs of procurement is a smooth process. Such wise spending is crucial for you to invest in your academia and wider services, allowing your institution to continue developing. At RMP, we want to plan and mitigate the individual risks you face in maintaining and extending your sharing of costs.
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