The university is committed to providing transparency and clarity on its finances and how the income we earn is used to further King’s services and ambitions.
King’s is a charity, and our purpose and ambitions are clear. We do not make profits to distribute in the way that a company would. We are also a large economic entity, with a turnover in excess of £1.2 billion, with around 10,000 colleagues working at King’s, and a need to maintain our buildings and very specialised facilities. Every day, we enjoy the use of assets that have been created from spending over our history, and we need to maintain and enhance those assets for future generations of the King’s community.
As such, we aim to make a financial surplus to create those investment funds. It is also essential that if our plans are not achieved in any year, we have financial reserves to call on. We do not want to make short term decisions that will adversely affect King’s long-term future.
Prudent and sustainable financial management means that in normal times, we should be meeting our day-to-day costs and generating investment funds.
Financial statements for the year ending 31 July 2023 (pdf 3.60MB).
The headlines for 2022-23
The financial results for 2022-23 show a consolidation of the recent strong financial performances.
In 2022-23, our surplus before other gains and losses was £128m. The improved funding of our main pension scheme – the University Superannuation Scheme (USS) - meant that (under accounting rules) we had to set aside a lower amount of our reserves to meet the possibility of a future deficit in USS. The decrease in the USS liability provision constituted £68m of this surplus, and a further £29m came from new donations and endowments. Our surplus from operations is therefore £31m, the same figure as in 2021-22.
Our student population has increased in recent years, however, we deliberately slowed this in 2022/23 which meant our tuition fee income from students was effectively the same as in 2021-22. Taking a longer focus, our tuition fee income has increased by more than 50% in the past 4 years. Our plan to 2025/26 shows further growth, albeit at a slower rate than in the recent past.
Research income reached £236m in 2022/23, and we were successful in being awarded with more than £280m of new grants and contracts and this is a really positive sign for the future. The last two years have seen King’s break through a long-standing ceiling of our research grants and contracts income, and we anticipate further growth in the coming years.
Investing in a sustainable future
At the end of 2022/23 our overall cash balance was £377m which was virtually unchanged on 2021-22. This represents a strong position, and whilst our operating performance has contributed to this strong cash position, the high balance also reflects some delays in capital projects, which were forecast to begin in 2022/23.
We completed the major construction works on our Strand campus, housing engineering teaching and research facilities in the Quad. We have also completed major works on the Guy’s Hospital site, including research facilities for Gene Therapy and Advanced Therapy and on the St Thomas’ hospital campus.
We also made significant progress on the development of London Institute for Healthcare Engineering (LIHE) on the St Thomas’ hospital campus (partially supported by a grant from the UK Research Partnership Infrastructure Fund). In conjunction with South London and Maudsley NHS Foundation Trust, we continue to develop the Pears Maudsley Centre for Children and Young People on the Denmark Hill site. Both these projects will complete in 2023/24.
In 2023/24, we would also expect to make major progress on the development of the Bush House South West Wing which will provide essential student facilities and teaching space, the early phases of the estate and equipment investment in our King’s Interdisciplinary Science project, and the development of our Champion Hill Halls of Residence.
This supports the future focus of Strategy 2026. These investments depend upon us being able to generate sustainable surpluses.
The position on the Universities Superannuation Scheme (USS) has improved since last year. The March 2023 valuation shows a surplus in the fund of £7 billion, compared with a deficit of £14 billion at the last formal valuation in March 2020. This means we have been able to reduce the liability provision for future USS payments. This is a major change as the USS liability increased by £289m in 2021/22.
Members of USS have been able to take part in a consultation as a result of the March 2023 valuation of the fund’s assets and future liabilities. As the scheme is now in surplus not deficit, we will be able to remove the remainder of the deficit liability provision (more than £300m) from our balance sheet in the 2023/24 financial statements. This major change will distort next year’s results considerably, and once again we will focus on the real operational surplus of King’s when considering our financial health.
The diagram below shows the relative income contributions from different activities.
King’s spends its income in a variety of areas, all geared towards supporting education and research and our intent to serve the local community and the world. The chart below expresses where our income was spent in the 2022-23 financial year:
King’s has built up a substantial endowment fund from generous philanthropic gifts over our long history. We seek to generate income from the fund to support current expenditures in line with the donor’s intentions, and also maintain the real value of the funds, so that the annual income stream can be maintained in the future. The university invests its endowments in managed funds run by professional investors and not directly into individual companies.
The value of our endowments moved in line with asset values on the global investment markets, in 2022-23 our Endowment Asset investments increased by £10m.
King’s maintains and regularly reviews our ethical investment policy. King’s specifically invests in funds that proactively screen to avoid controversial and unethical sectors and industries – like tobacco, munitions and fossil fuels. The university invests in funds that actively target positive social and green investments.