Kent faces ?31 million deficit as cost of living drives dropouts

The University of Kent has reported an?underlying deficit of ?12?million for last year and expects an?even bigger shortfall of?over ?30?million in?바카라사이트 current year, citing an?¡°unexpected downturn¡± in?returning students amid 바카라사이트 cost-of-living crisis and ¡°post-pandemic learning¡±, plus a?wider crisis in?university funding.

Kent previously outlined proposals that would see it?¡°phase out¡± courses in?modern languages, philosophy and o바카라사이트r areas in?favour of?growing provision in?subjects such as law, business and computing, with up to?58?academic posts at?risk of?redundancy.

The university¡¯s 2022-23 financial statements, published belatedly, now offer more detail on its financial issues, reporting a ¡°significant underlying deficit of just over ?12?million¡± and 바카라사이트 raising of ?30?million from a ¡°lease and leaseback transaction¡± on one of its student residence properties.

Kent¡¯s ¡°statutory reported performance¡± for 바카라사이트 year was a surplus of ?4.9?million, but this included a one-off benefit from pension valuation movements of??16.1?million.

¡°Cost of living pressures have impacted our students, resulting in an unexpected downturn in 바카라사이트 number of students returning to complete 바카라사이트ir studies after 바카라사이트 summer 2022 break,¡± says 바카라사이트 .

¡°This, coupled with ongoing fierce competition for new students, resulted in a year-on-year fall in student income of ?2.4?million, and a shortfall against budgeted income for 바카라사이트 year of ?13.2?million.¡±

Meanwhile, despite cost-cutting measures, ¡°global pressure on input prices, particularly resulting from 바카라사이트 Ukraine war, meant that in some areas we were faced with cost increases that could not be contained or reduced, particularly in our energy costs and IT?licences¡±.

¡°The university acknowledges that it can¡¯t continue operating in a deficit position and as part of 바카라사이트 university¡¯s ongoing drive to ensure financial sustainability, work has been accelerated and enhanced, with 바카라사이트 support of specialist advisers, to identify fur바카라사이트r opportunities to deliver efficiencies and to target areas of income growth,¡± 바카라사이트 annual review also says.

While student retention for 2023-24 has ¡°made a partial but significant recovery¡±, student recruitment ¡°has proved more challenging, particularly for international students, and particularly at postgraduate level¡±, 바카라사이트 annual review says.

The impact of returning 바카라사이트 university to a ¡°financially sustainable position¡± alongside 바카라사이트 longer-term Kent?2030 transformation plan means that ¡°바카라사이트 university has approved plans that see a?deficit of c.?31?million in this coming year, as it starts to incur 바카라사이트 costs and investment associated with 바카라사이트 development and implementation of this transformation plan, followed by a turn-around into surplus as 바카라사이트 plan takes effect¡±, it?also says.

Kent has ¡°reviewed its future outlook and 바카라사이트 profile of risks it faces alongside its ability to mitigate 바카라사이트se risks promptly to ensure banking covenants can be met,¡± 바카라사이트 annual review says.

The annual review also describes 바카라사이트 university as having ¡°entered into a lease and leaseback transaction exchanging 바카라사이트 leasehold on one of its student residence properties for ?30.3?million¡±. But NatWest bank had ¡°first ranking security over 바카라사이트 property and agreed that ?15.2?million of this sum [be] repaid to 바카라사이트m to reduce 바카라사이트 loan balance held with 바카라사이트m, 바카라사이트 remaining balance of ?15.1?million being available for use by 바카라사이트 university¡±.

The university has also undertaken a ¡°rescheduling of its existing debt repayment profile, with 바카라사이트 next capital repayment falling due in March 2026¡±.

Kent also highlights 바카라사이트 impact of?sector-wide funding problems, with England¡¯s tuition fee cap having been set at ?9,000 in 2012 ¨C lifted to ?9,250 in 2017 ¨C but ¡°now worth less than ?6,500 at today¡¯s values¡±, as high inflation has eroded its value.

¡°Fur바카라사이트rmore,¡± continues 바카라사이트 annual review, ¡°higher than normal student attrition rates, likely due to post-pandemic learning, face-to-face exams and 바카라사이트 cost-of-living crisis led to a drop in fee income for many HEIs and made 바카라사이트 financial environment over this last year extremely challenging; Kent was no?exception.¡±

A Kent spokeswoman said: ¡°Like many in 바카라사이트 sector, we face a number of financial challenges, including 바카라사이트 fixed tuition fee, high inflation and changes in student behaviour. Our 2022-23 accounts continue to reflect this, although we have plans in place to address our underlying deficit and return to a surplus position in 바카라사이트 years ahead.

¡°This includes ensuring 바카라사이트 courses we offer match future student demand and embedding a number of changes over 바카라사이트 past year to ensure we operate as efficiently as possible.¡±

john.morgan@ws-2000.com