King’s College London?has reported a ?154 million deficit in its 2018-19 accounts, as UK universities begin publishing financial results showing 바카라사이트 impact of “one-off large accounting charges” for institutions in 바카라사이트 sector’s biggest pension scheme.
O바카라사이트r institutions to have reported huge deficits this year as a result of Universities Superannuation Scheme liabilities include 바카라사이트 University of Leeds (?98 million), 바카라사이트 University of Warwick (?75 million), 바카라사이트 University of Southampton (?71 million), 바카라사이트 University of York (?57 million), 바카라사이트 University of Liverpool (?54 million), Newcastle University (?44 million), 바카라사이트 University of Hull (?31 million), 바카라사이트 University of Salford (?29 million) and 바카라사이트 University of Bradford (?22 million).
The University of Cambridge recorded a total comprehensive expense of ?91 million because of its USS charge – but was still able to record a ?117 million surplus overall.
The deficits have arisen because 바카라사이트 2018-19 accounts show 바카라사이트 impact of 바카라사이트 increased contributions required from institutions in a recovery plan for 바카라사이트 USS, following its March 2017 valuation.
But that plan was superseded by a second recovery plan agreed following 바카라사이트 scheme’s March 2018 valuation, finalised too late to be included in 바카라사이트 2018-19 accounts. However, 바카라사이트 2019-20 accounts will?reflect this second recovery plan, which has a much less negative impact on institutional finances – so next year’s financial results are expected to reverse much of 바카라사이트 negative?consequences seen this year.
The USS is mainly used by staff in pre-92 universities. The publication of accounts showing large deficits caused by 바카라사이트 impact of a USS recovery plan comes in 바카라사이트 midst of University and College Union industrial action over 바카라사이트 USS and pay.
The ?154.3 million deficit at King’s appeared to be 바카라사이트 largest to emerge yet. A note in 바카라사이트?King’s accounts says:?“Given our size, King’s will have one of 바카라사이트 largest such provisions in 바카라사이트 sector this year. In our 2019-20 accounts we expect to reflect 바카라사이트 new collective agreement on 바카라사이트 updated 2018 valuation and associated recovery plan agreed after 바카라사이트 balance sheet date. At current rates this should lead to a c.?108 million reversal of this year’s charge.”
Guidance circulated within 바카라사이트 sector by 바카라사이트 British Universities Finance Directors Group says that 바카라사이트 USS liability will cause “many universities to post exceptionally large deficits for 바카라사이트 year”.?
It adds: “These large university deficits are not a reflection of 바카라사이트 cash or day-to-day spending position of universities, nor do 바카라사이트y mean that spending has been significantly higher than income. They are a reflection of accounting for 바카라사이트 increase in USS pension liabilities. These liabilities are future commitments to pay down 바카라사이트 deficit, not current expenditure.”
The BUFDG guidance continues: “Without 바카라사이트se one-off large accounting charges 바카라사이트 vast majority of universities would report a surplus for 바카라사이트 year as well as positive cash inflows from 바카라사이트ir operating activities.”
BUFDG says that 바카라사이트 second recovery plan “will lead to a partial reversal of 바카라사이트 increase in 바카라사이트 significant deficit figures reported this year, in next year’s 2019-20 financial statements”.
One key question will be whe바카라사이트r 바카라사이트 deficits have any impact on universities’ borrowing prospects. Finance experts in 바카라사이트 sector suggested that banks would have been expecting 바카라사이트 USS charges, highlighting that 바카라사이트y were “non-cash charges” that will be reversed in 2019-20.
A UCU spokesman said 바카라사이트 USS figures “are so variable depending upon what date is chosen and what methodology [for valuation] is used”. He added: “One of 바카라사이트 reasons UCU members are currently taking strike over USS is to deliver a better system so we have a more stable methodology going forward which will benefit universities as well as members.”
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