The College recognised total income of £1,079.3 million in 2020–21, returning to the pre-pandemic level of 2018–19. It represented an increase of 5.2% compared to last year, mostly owing to the expansion of our student population. Our research income also recovered from the dip seen in the previous year as pandemic-related restrictions eased. This was largely offset, however, by falls in our other income, and the level of donations and endowments remaining depressed.

Income from education

The potential impact of COVID-19 on admission numbers introduced uncertainty for 2020–21. We increased student offers and invested in marketing to mitigate the risk of withdrawals and cancellations due to COVID-19. This proved successful, as we enrolled a record 22,425 students in 2020–21, a 12.5% increase on the previous year and considerably higher than average growth of 4.3% seen over the previous four years. This growth means income from tuition fees and education contracts now constitutes our highest proportion of income (35.7%), surpassing research grants and contracts for the first time.

The UK’s exit from the EU and the consequent increase in tuition fees for EU students has seen a reduction of around 20% in EU applicants for courses starting in Autumn 2021 compared to the prior year, although this was not reflected in enrolments for 2020 courses. Both EU and overseas student populations grew by 17.2% and home student numbers have also increased, though at slower rate of 5.6%.

Student numbers grew in both undergraduate and postgraduate courses, with the growth split one-third and two-thirds respectively. Our postgraduate applications increased by 35% this year, 80% of this increase coming from overseas. The ratio of applications to enrolled for postgraduate students increased to 7.9 in 2021 (6.5 in previous year) and matched that of undergraduate. Although our student population represents over 140 countries, we continue to have a high reliance on the Chinese students.  Of the total growth in applications this year, China accounted for half of these and they now make up 19.3% of the student population, up from 17.0% last year. We need to do more to attract students more equitably from across the globe.

Funding body grants

In 2020–21, our funding body (Office for Students and UK Research and Innovation) grant income was £156.0 million, marginally up on last year. We had anticipated a slight fall following the accelerated quality-related research funding in the prior year; however, we were awarded £2.4 million of funding from UKRI’s World Class Laboratories Fund, aimed at helping improve laboratory facilities in universities.

Overall, there has been little change to the allocation of our funding body grant income compared to last year. Core grant funding has remained steady for the sector, though our share has fallen slightly, but a small increase in capital funding has offset this. It is likely that our teaching grant allocations will fall next year as the Department for Education has removed additional financing for students attending courses in London. These funds will instead be redistributed to high-cost subjects. Whilst we offer many such courses, the overall impact is anticipated to be negative for us.

Research grants and contracts

This year’s research grants and contracts income of £363.0 million represented a 4.4% increase from the prior year, reflecting the easing of restrictions and how we have continued to adapt to work during the pandemic. However, this increase includes more volatile funding sources, such as capital and in-kind income and if we remove these, there was only a 1.0% increase.

Research Councils are our largest funding group, accounting for around one third of our research income. They, along with government funded research, exhibited the largest increase compared to last year at £8.8 million (7.7%). Government funded research, although historically representing a lower proportion of our research income, also saw a large increase at £8.8 million (16.4%). Almost half of the increase relates to the continued development of a COVID-19 vaccine. Industry funded research income declined compared to the prior year, whilst EU Commission, charity and other funders remained at similar levels. The proportion of industry-funded research income has decreased due to the pandemic and a longer-term reduction in industry funded research. We still have ambition, however, to grow our pool of partners, both nurturing existing and developing new partnerships across a variety of sectors.

We applied for nearly £1.6 billion of research awards in 2020–21, up from an average of £1.3 billion over the previous three years. Most of the increase in applications went to Research Councils, though the only funding group to see a decline was the EU Commission. This is because of the gap between Horizon 2020 ending and Horizon Europe starting (seven-year framework programmes) and delays with the European Parliament agreeing the budget and UK participation.

Last year we won £337 million of awards, down from an average of £398 million over the previous three years. The largest drop in funding was from charities, who continue to be hit very hard by the pandemic, though we should also note that our charity funding was dropping before the pandemic. Industry and government funding reduced slightly from their previous three-year average. There is a lag between applications being submitted and subsequently being awarded, so we are optimistic that last year’s increased applications will translate to higher awards in 2021–22. We are mindful, however, that charity sector funding may remain subdued in the current climate.

In most recent years we have secured  awards faster than the rate of expenditure so  our order book is growing. We anticipate that research activity will increase in 2021–22 if restrictions related to COVID-19 do not return to previous levels.

Other Income, Donations and Endowments

Other income dropped this year by £7.2 million to £145.3 million. Our Residences, Catering and Conferences income was significantly impacted by the varying lockdown restrictions during the year and is £18.3 million lower than the prior year. As lockdown restrictions eased, occupancy levels in our undergraduate student halls increased to over 60% in April compared to levels of 10% in January; our residences income was down a third (£12.7 million) on the prior year. Our campuses have remained at least partially open throughout the pandemic, enabling some catering services to be delivered, albeit with footfall down two-thirds on the prior year on average (equating to £4.4 million of income). Our conferencing income was hit even harder, down over 80% (£1.0 million).

Our consultancies and scientific services income increased by £6.9 million this year.  This is primarily related to the opening of the COVID-testing facility in February 2021, which formed part of the Department of Health and Social Care’s partnership with the London Testing Alliance to increase testing capacity. The facility has capacity for 3,000 tests a day. This additional income is entirely offset by its operating expenditure.

Our other departmental income dropped by £10.5 million this year as there was no repeat of the technology transfer spinout sale for £7.8 million in the previous year. This reduction was offset by increases in other revenue grants of £5.7 million which primarily related to the Department for Business, Energy and Industrial Strategy supporting the costs of the proposed manufacture and supply of a saRNA COVID-19 vaccine that was being developed; £2.8 million of these revenue grants were recognised this year.

We also recognised £7.1 million of income associated with the favourable position on the forward purchases we had entered for our electricity and gas supplies. We purchase some of our utilities early to manage the risks which accompany energy price fluctuations. With market prices higher than the value we paid at the 31 July; the difference is reported as income.

Our donations and endowment income for 2020–21 was £24.0 million, 15% lower than in the prior year. The uncertainty created by the pandemic made securing new donations more difficult.

New endowments comprise £1.8 million of the total donations and endowment income for the year, £2.6 million lower than last year. In April, we had the breaking of ground of our new School of Public Health building. So far, we have secured £57 million since the start of the project, almost three-quarters of which relates  to capital spend.

Financial review: Expenditure