Annual Financial Statements 2018-19

The University generated an underlying operating surplus, before significant items not influenced by day-to-day operations of £2.7m (2017/18 £0.8m). Underlying operating surplus is defined as the surplus generated from normal activities and is the measure used by management throughout the year to measure the University’s performance.

The way Universities report their end-of-year financial position changed from 2015/16, which means their accounts look significantly different in comparison to the years before. It is important to note that the underlying financial performance of many universities has not changed, the only change is to the way they are reported.

This is as a result of an accounting code introduced by the UK accounting standards body, the Financial Reporting Council. The code - ‘FRS102’ - changes the way some income, expenses, assets and liabilities appear on the financial statements.

These financial reporting requirements resulted in significant changes to the presentation of the Financial Statements; changes to accounting for pensions have also resulted in greater year-on-year volatility in income and expenditure over and above any changes arising from operational factors. 

The University is reporting a consolidated deficit for the year, before comprehensive income, of £8.1m (2017/18: £7.8m). As in previous years, the deficit includes a significant combined non-cash charge of £8.9m (2017/18: £4.1m) in respect of the accounting for both the Strathclyde Pension Fund and USS Pension Fund.

Such non-cash charges are being experienced nationally as the valuation of pension liabilities is impacted by the significantly lower net discount rate compared to 31 July 2018. In addition, legal cases such as the McCloud and GMP judgments have exceptionally impacted on the post service costs of the LGPS schemes, and the increasing employer costs associated with the USS revaluation process are also acting to increase non-cash charges in 2018/19.