1. Tuition fees and education contracts

2. Funding body grants

3. Research grants and contracts

4. Other income

5. Other services rendered

6. Investment income

7. Donations and endowments

8. Staff costs

Further information on staff costs is included within the Annual Report of The Remuneration Committee.

9. Analysis of expenditure by activity

Read our access and participation plan (APP).

Access investment

We have underspent by £51,692 in the year 2020/21. This underspend is in large part due to the closure of sports and leisure facilities due to COVID-19 meaning a large proportion of activity could not be delivered causing a predicted underspend of over £250,000. The underspend allowed us to introduce additional activity and partnerships and combined with some of the underspend from Financial Support (below) allowed us to mitigate the understand. Additional in-person activity for students from target groups was run as soon as Covid-19 restrictions allowed. Mini residentials for students forced to defer entry from 2020 to 2021, in-person events for offer holders, additional residential visits for students and their parents and in-person residentials ran. If the predicted numbers of students had attended the summer schools (many had to pull out at the last minute due to spikes in COVID-19 cases) the underspend would have been smaller. New partnerships with Rare and Villiers have allowed us to deliver even more activity to targeted groups.

Financial support

The 2020/21 academic year was impacted by the pandemic. The APP Finance Support budget recorded an overall underspend of £92k. This was primarily due to the low number of recipients eligible for the new Accommodation top-up bursary for those first-year undergraduate students with household incomes between £25k and £42k. The budget projected that 200 students would each be eligible for a £1k waiver from the cost of their University accommodation (responding to a need identified by the University of Bath Students’ Union). The impact of the pandemic meant that only £64k of this bursary was ultimately allocated, as many students were not in residence for the full academic year. There was a slight overspend on other bursary support, as the disruption to employers resulted in more students continuing directly into the final year of their degree instead of taking up a paid placement or internship.

Research and evaluation

The 2020/21 academic year was impacted by the pandemic. The University had an underspend of £193,105 against the budget. A significant amount of the underspend (£89,964) was against the projected funding of the doctoral research studentships. Four of the eight students completed and submitted during this period, whilst two suspended their studies and one was registered for only part of the year having returned from maternity leave. The Admissions Data and Evaluation Officer post also remained vacant during this period; a reorganisation of the Undergraduate Admissions team means that this post has been absorbed into another role, with the new post-holder taking up the position in September 2021. A further evaluation role was left unfilled and the resource used to fund an outreach position – this new role is therefore not included in the Research and Evaluation return.

Disability support for students

The 2020/21 academic year was impacted by the pandemic. The Disability team Head retired, and this resulted in a reorganisation of the line management of the team within the wider Student Services Department. The departure of the team Head accounted for a significant level of the underspend as the role was not replaced, and the reorganisation also resulted in another team member moving to a non-APP countable role. This saving in staffing costs accounts for the underspend from the projected budget.

10. Related party transactions

The financial statements of the University include transactions with related parties. In accordance with FRS 102 these are disclosed where members of the University of Bath’s Council or Key Management Personnel (KMP) disclose an interest in a body with whom the University undertakes transactions which are considered material to the University’s Financial Statements and/or the other party. Due to the nature of the University’s operations and the composition of the Board, being drawn from local public and private sector organisations, it is inevitable that transactions will take place with organisations in which a member of Council or KMP may have an interest. All transactions involving organisations in which a member of Council or KMP may have an interest, including those identified below, are conducted at arms length and in accordance with the University’s Financial Regulations and usual procurement procedures.

An updated register of the interests of the members of Council is maintained.

The University has taken advantage of the exemption within FRS 102 and has not disclosed transactions with other group entities where it holds 100% of the voting rights. Included within the financial statements are the following transactions with related parties:

University of Bath Students’ Union

The Students’ Union provides a range of services and facilities to the University’s student body. Two members of Council sit on the governing body of the Students' Union.

Reimbursements to members of Council for expenditure incurred whilst carrying out their duties amounted to £633 (2019/20 £5,015). Three members of Council (2019/20 11) claimed expenses during the year.

11. Interest and other finance cost

12. Capital commitments

13. Fixed assets

As at 31 July 2021, we revalued all our freehold and leasehold Land and Buildings. This valuation is carried out by Carter Jonas Limited, an external Chartered Surveyor on the basis of Existing Use, Depreciated Replacement Cost or Market Valuation according to the nature and use of each building. The valuation was prepared in accordance with the Valuation Standards published by the Royal Institute of Chartered Surveyors.

The movement in land and buildings values following the revaluation is written back through the reversal of accumulated depreciation charged since the previous valuation exercise.

During the year the University impaired the costs of the IAAPS facility by £21.5m. This facility was substantially complete at the year-end and therefore costs have been compared to a market valuation for the first time, this market value is substantially less than the cost incurred and as a result, we have impaired its cost. Additional disclosure is made in the Financial Review.

Freehold and Leasehold Land and Buildings measured by valuation at 31 July 2021 includes the following historical cost:

Leasehold land and buildings includes land with a value of £41.1 million at 31 July 2021 (£85.8 million at 31 July 2020).

Equipment includes assets donated to us, these are valued at market value as at the date when they were received.

14. Non current asset investments

15. Trade and other receivables

Debtors due in more than one year are all Other receivables.

16. Current asset investments

Investments measured at market value includes Quoted investments of £106.4m (£89.4m) and those held in unit funds where a market value can be determined of £47.0m (£47.0m).

Investments measured at cost include those held in money market funds, certificates of deposit and fixed deposits.

Current Asset investments include £6.7m (£5.2m) held in respect of Endowments as disclosed in note 22.

17. Creditors: amounts falling due within one year

Deferred income

Included in deferred income are the following items which have been deferred until specific performance-related conditions are met.

18. Creditors: amounts falling due after more than one year

19. Borrowings

20. Derivatives

The University is using hedge accounting for its interest rate swaps and foreign exchange options and as a result determined the effectiveness of the hedging arrangements. The analysis below shows the results of this assessment:

Interest rate swaps are hedging instruments associated with the University’s loan portfolio with Lloyds Bank plc and Barclays Bank plc Foreign Exchange options are hedging instruments associated with our current asset investments in USD denominated funds.

The movement in market value for 2020/21 is a loss of £4.9m (2019/20 loss of £0.7m) is reported as follows:

21. Provisions

Obligations to fund deficit on USS Pension

The obligation to fund the past deficit on our Superannuation Scheme (USS) arises from the contractual obligation with the pension scheme for total payments relating to benefits arising from past performance. Management has assessed future employees within the USS scheme and salary payments over the 15 year period of the contracted obligation in assessing the value of this provision and these are disclosed below:

Defined benefit obligations (LGPS)

As a multi-employer scheme where the share of assets and liabilities applicable to each employer can be defined, we have accounted for the scheme under FRS 102 as a defined benefit scheme based on a full actuarial valuation of the Fund as at 31 March 2019.

22. Endowments

Restricted net assets relating to endowments are as follows:

23. Restricted reserves

Reserves with restrictions are as follows:

24. Contingent Liability

We have entered a number of nomination agreements with three organisations whereby we underwrite the shortfall in the letting of a number of student residences, summarised below. We do not expect any liability to be incurred as a result of these contracts as we expect all residences will be fully let as per the nomination agreements.

25. Lease obligations

The University had total operating lease commitments in respect of leased property as follows:

Operating leases are held for six properties used by us as student accommodation. As we do not control the significant residual value in these properties upon the expiry of the lease period they have not been accounted for as Service Concession Arrangements.

The lease arrangements expire between 2024 and 2032, the lease payments are reported in other operating expenses.

26. Pensions

Universities Superannuation Scheme

We participate in the Universities Superannuation Scheme (USS), a hybrid pension scheme, providing defined benefits (for all members), as well as defined contribution benefits. The assets of the scheme are held in a separate fund administered by the trustee, Universities Superannuation Scheme Limited. USS has over 203,000 members and we had 2,299 (2,342) active members at 31 July 2021.

USS is a multi-employer scheme and is accounted for as set out in the accounting policies.

The latest available completed actuarial valuation of the Retirement Income Builder is at 31 March 2018 (the valuation date), which was carried out using the projected unit method.

The 2018 valuation was the fifth valuation for the scheme under the scheme-specific funding regime introduced by the Pensions Act 2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover their technical provisions. At the valuation date, the value of the assets of the scheme was £63.7 billion and the value of the scheme’s technical provisions was £67.3 billion indicating a shortfall of £3.6 billion and a funding ratio of 95%.

The key financial assumptions used in the 2018 valuation are described below. More detail is set out in the Statement of Funding Principles.

Pension increases (CPI)

Term dependent rates in line with the difference between the Fixed Interest and Index Linked yield curves, less 1.3% p.a.

Discount rate (forward rates)

• Years 1-10: CPI +0.14% reducing linearly to CPI –0.73%
• Years 11-20: CPI +2.52% reducing linearly to CPI +1.55% by year 21
• Years 21+: CPI +1.55%

The main demographic assumption used relates to the mortality assumptions. These assumptions are based on analysis of the scheme’s experience carried out as part of the 2018 actuarial valuation. The mortality assumptions used in these figures are as follows:

The current life expectancies on retirement at age 65 are:

A new deficit recovery plan was put in place as part of the 2018 valuation, which requires payment of 2% of salaries over the period 1 October 2019 to 30 September 2021 at which point the rate will increase to 6%. The 2021 deficit recovery liability reflects this plan. The liability figures have been produced using the following assumptions:

To illustrate how sensitive the funding level is to experience being different from assumed, the table below shows how the valuation results at 31 March 2018 would have differed given small changes in the key assumptions.

*Assumes member life expectancy is consistent with someone one year younger than their current age (i.e. a 60 year old is observed to have the life expectancy of someone aged 59).

USS is a “last man standing” scheme so that in the event of the insolvency of any of the participating employers in USS, the amount of any pension funding shortfall (which cannot otherwise be recovered) in respect of that employer will be spread across the remaining participant employers and reflected in the next actuarial valuation of the scheme.

Local Government Pension Scheme

We participate in the Avon Pension Fund which is a funded defined benefit pension scheme with the assets held in separate trustee administered funds. The assumptions which have the most significant effect on the determination of contribution levels are as follows:

On the 1 June 2021 the University ceased to enrol new members of staff into the LGPS. The contributions payable by us were equal to 16.5% of total pensionable salaries for the period to 31 May 2021 and 19.3% for the balance of the period to the end of the financial year.

As a multi-employer scheme where the share of assets and liabilities applicable to each employer can be defined, we have accounted for the scheme under FRS 102 as a defined benefit scheme based on a full actuarial valuation of the Fund as at 31 March 2019, updated to 31 July 2021 by a qualified independent actuary.

The material assumptions used by the actuary were:

Post retirement mortality assumptions for members retiring in normal health

The sensitivities regarding the principal assumptions used to measure our share of the scheme liabilities as at the valuation on 31 July 2021 are set out below:

The movement in the scheme's deficit during the year is made up as follows:

27 Post balance sheet event

Universities Superannuation Scheme

The movement in the USS pension provision and charge of £3.5m reflected on the face of SOCI is based on the scheme valuation at 31 March 2018. On 1 October USS signed and filed the USS 2020 valuation with the Pensions Regulator. The 2020 valuation has longer duration and higher deficit recovery contributions than the 2018 valuation.

We estimate the USS liability at 31 July 2021 under the 2020 valuation to be £119.2m and the resulting £76.9m adjustment will be reported as a debit against staff costs in the year ending 31 July 2022.

28 US Department of Education Financial Responsibility - Supplemental Schedule

In satisfaction of its obligations to facilitate students’ access to US federal financial aid, we are required by the US Department of Education to present the following Supplemental Schedule in a prescribed format.

The amounts presented within the schedules have been:

• prepared under the historical cost convention, subject to the revaluation of certain fixed assets
• prepared using United Kingdom generally accepted accounting practice, in accordance with Financial Reporting Standard 102 (FRS 102) and the Statement of Recommended Practice: Accounting for Further and Higher Education (2019 edition)
• presented in pounds sterling

The schedules set out how each amount disclosed has been extracted from the financial statements. As set out above, the accounting policies used in determining the amounts disclosed are not intended to and do not comply with the requirements of accounting principles generally accepted in the United States of America.

Primary reserve ratio

Equity ratio

Net income ratio