Annual Reports and Financial Statements: Brief overview

Brief overview for the year ended 31 July 2024

Vice-Chancellor’s statement

The start of a new academic cycle is an opportunity to reflect on recent achievements and to think about the months ahead.

Cambridge had an excellent year, with an impressive roll call of new Fellows of the learned societies, and many members of our community recognised with national Honours. We enjoyed sporting success, award-winning exhibitions, celebrated discoveries, new spin-out companies, and significant progress on major capital projects.

The year 2023–24 was also a strong one for philanthropy, as we reached the goal of £500m raised for the Student Support Initiative. That scheme has been transformative – it has underpinned the Foundation Year and the Get‑In Campaign, the Stormzy scholarships, the Mastercard Foundation scholarships, and the Harding postgraduate scholarships. It has also enabled the transformation of our student health and wellbeing services, and much more.

We are now identifying ways to work more closely with a new government; in this moment of national renewal, Cambridge has a huge amount to offer.

Four of our current initiatives illustrate how we can contribute. In collaboration with the Colleges, we are stepping up widening participation efforts to attract students from areas of the country where we do not draw as strongly. We are in the advanced planning stages for two new hospitals on the biomedical campus – the Cambridge Cancer Research Hospital and the Cambridge Children’s Hospital – both of which will revolutionise care across East Anglia, the UK, and beyond. We are expanding the Bennett Institute for Public Policy, already a hub of academic and policy research about the major challenges facing the country and the world. And finally, we have bold, ambitious plans for the creation of an Innovation Hub at West Cambridge that will bring together the very best researchers, innovators, entrepreneurs, spinouts and funders under one roof.

We want to make the University of Cambridge the best possible place to work. That means rewarding our staff appropriately and supporting them to do their very best work here.

Toward that end, the University recently launched its People Strategy, a suite of initiatives designed to strengthen our ability to attract, develop, and reward talent, build community, and run an effective organisation.

The successful roll‑out of our ambitious plans requires robust finances. While we are not immune to the financial challenges faced by the UK’s higher education sector, Cambridge has the resources to make it resilient. These resources enable us not only to balance the annual operating budget but also to invest in our people, our Estate, and our digital capacities for the longer-term. We are working across the University to cut costs, increase revenues (including philanthropy), and attain a better balance between spending today and investing for tomorrow. It is this long-term financial planning that will ultimately allow us to achieve our academic mission.

Professor Deborah PrenticeVice-Chancellor

About the University

The University of Cambridge is one of the world’s leading universities, with a rich history of radical thinking dating back to 1209. Its mission is to contribute to society through the pursuit of education, learning and research at the highest international levels of excellence.

The University comprises 31 autonomous Colleges and over 100 Departments, Faculties and institutions. Its 24,000 students include around 8,000 international students. In 2023, 72.6% of its new undergraduate students were from state schools and more than 25% from economically disadvantaged backgrounds.

Cambridge research spans almost every discipline, from science, technology, engineering and medicine through to the arts, humanities and social sciences, with multi-disciplinary teams working to address major global challenges. In the Times Higher Education’s rankings reflecting results of the most recent UK Research Excellence Framework in 2021, for research, the University was rated as the highest scoring institution covering all the major disciplines.

A 2023 report found that the University contributes nearly £30 billion to the UK economy annually and supports more than 86,000 jobs across the UK, including 52,000 in the East of England. For every £1 the University spends, it creates £11.70 of economic impact, and for every £1 million of publicly-funded research income it receives, it generates £12.65 million in economic impact across the UK.

The University sits at the heart of the ‘Cambridge cluster’, in which more than 5,000 knowledge-intensive firms employ more than 73,000 people and generate £24 billion in turnover.

Cambridge University Press & Assessment publishes thousands of books, hundreds of journals, and through its examinations, issues more than 11 million grades worldwide each year. The Press & Assessment serves more than 100 million learners in 170 countries.

Public benefit

The University is an exempt charity subject to regulation, with effect from 1 April 2018, by the Office for Students under the Higher Education and Research Act 2017. The University reports annually on the ways in which it has delivered charitable purposes for the public benefit. Highlights for the year are included as a separate pdf document at https://www.admin.cam.ac.uk/reporter/2024-25/weekly/6773/brief-overview2024.pdf. The Council, in reviewing the University’s activities in this regard, has taken into account the Charity Commission’s guidance on public benefit. The Council is satisfied that the activities of the University, as described in this Report and Financial Statements, fully meet the public benefit requirements of advancement of education, research and dissemination of knowledge.

Environmental sustainability

Cambridge’s world-leading research and education play a key role in developing sustainable solutions and future leaders who are equipped to tackle global environmental challenges such as climate breakdown and biodiversity loss. The University recognises the need to deliver its academic activities in an environmentally responsible way and is taking action on a number of fronts to improve its environmental sustainability performance across its estate, supply chain and investments. The University has adopted a number of commitments to reduce carbon emissions across its operations.

From an estates perspective, the University is committed to reducing energy-related emissions from its operational estate1 by 75% against 2015–16 levels by 2030–31, and to absolute zero by 2048. Over the past year a major focus has been on exploring opportunities to utilise the existing estate more efficiently and effectively in support of the University’s academic mission. The ‘Reshaping our Estate’ programme has identified opportunities to deliver an estate that costs less to run, has lower carbon emissions and is more biodiverse, whilst providing high-quality spaces that support collaboration and academic excellence. These findings will now inform the development of a Strategic Estates Framework, with environmental sustainability at its core. Alongside this, there has been a continued focus on decarbonising the University’s supply of heat, with a number of heat decarbonisation projects moving forward, including at the Whittle Laboratory, Keynes House and Donald McIntyre building. The University continues to work on pathways towards its absolute zero by 2048 commitment.

Energy-related emissions from the operational estate in 2023–24 are shown in Table 1. The University reports more fully on the environmental performance of its estate in an annual Environmental Sustainability Report. The 2023–24 report will be available in early 2025.

Table 1: Energy-related emissions from the operational estate 2023–24 (tCO2e)

	2023–24	2022–23	Baseline (2015–16)
Total Scope 1 and 2 Market-based carbon emissions (energy and fuel use)*	24,712 Ⓐ	23,229	74,828
Total Scope 1 and 2 Location-based carbon emissions (energy and fuel)	51,677 Ⓐ	50,690	74,828
Total nuclear waste generated (tonnes/year)**	0.697	0.794	–

*Progress against the target is measured against the University’s Market-based emissions. For full transparency, the University’s Location-based emissions are also shown.

**A proportion of the University’s procured electricity is sourced from UK wind farms via a Power Purchase Agreement (PPA). As an interim step towards zero carbon energy sources, the proportion of electricity that is not currently sourced via a PPA is generated through nuclear power, which is reported as zero carbon. In the interests of transparency, the University reports the amount of nuclear waste generated as a result of its use of nuclear power. Conversion factors from https://www.edfenergy.com/fuel-mix.

PricewaterhouseCoopers LLP (PwC) has performed an Independent Limited Assurance engagement on selected balances within the 2023–24 data, shown with the symbol Ⓐ, in accordance with the International Standard on Assurance Engagements 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’ and International Standard on Assurance Engagements 3410 ‘Assurance engagements on greenhouse gas statements’, issued by the International Auditing and Assurance Standards Board. The Independent Limited Assurance Report can be found on our website along with our Methodology Statement – the basis on which the balances are calculated and a description of the limited assurance given.2

In 2024, the University recruited its first Biodiversity Manager, who will play a pivotal role in embedding biodiversity improvements across the management of the estate and, longer term, across the University’s supply chain, helping to deliver against the pledge to become a Nature Positive University.

With regard to procurement, the University has introduced a new Supplier Code of Conduct, which sets out the minimum sustainability and environmental standards and expectations that University suppliers are required to meet. The University is working in collaboration with other universities and its suppliers to improve the data it holds on the carbon impact of its supply chain, with an initial focus on the highest carbon categories of expenditure. Alongside this, the University has developed new procurement and purchasing training for its staff, with a focus on environmental sustainability to help staff make informed decisions.

University of Cambridge Investment Management Limited (UCIM) is the investment organisation that manages the Cambridge University Endowment Fund (CUEF). UCIM’s sustainable investment strategy, in place since 2020, is focused on

(i)investing to achieve a phased approach to net zero

(ii)engaging with our fund management partners to decarbonise their portfolios and

(iii)reporting with transparency and accountability to our stakeholders. UCIM is committed to working with the University and all stakeholders towards its ambition that the Endowment Fund will be ‘net zero’ of greenhouse gas emissions by 2038.

In 2023, UCIM started measuring its own greenhouse gas emissions and the organisation was awarded Gold in the University’s Green Impact Awards in 2024. As at 30 June 2024, the CUEF’s exposure to conventional energy3 was 1.6% of the portfolio; a reduction of 0.6% since 30 June 2023. UCIM continues to actively engage with its core fund management partners to support them to decarbonise their portfolios, including delivering a bespoke executive education programme, in partnership with Cambridge Institute for Sustainability Leadership, to provide them with frameworks and tools to reach net zero. UCIM provides regular updates to investors in the CUEF and other University stakeholders on progress against its sustainable investment strategy. Further information is available at https://www.ucim.co.uk.

The University’s Banking Engagement Forum, established in 2022, has enabled the collegiate University to use its combined influence as a customer or potential customer with banks and asset managers to help mitigate climate change. This year its work has included launching a collaboration of over 70 Higher Education Institutions on a Request for Proposals for cash products (deposits and money market funds) that do not contribute to the financing of fossil fuel expansion; commissioning an environmental rating of UK banks; and hosting several client-service provider engagement meetings with banks and asset managers in which senior University and College personnel have pressed for the cessation of financing of fossil fuel expansion.

In July 2024, the University Council announced its plans to strengthen leadership on environmental sustainability across the University’s academic and operational activities. A comprehensive body of work is underway and the University will publish a new operational environmental sustainability strategy and plan in 2025.

Cambridge University Press & Assessment is focusing on climate education by offering resources and expertise in teaching and learning for nature, the environment and climate in partnership with students, teachers, and education ministries. It is creating the skills and understanding required for adapting to climate change by embedding understanding of climate issues and sustainability into its education programmes, publishing, assessment, and research. This year, the Press & Assessment launched an online climate literacy course in India, developed in partnership with Cambridge Zero, to give students the skills and knowledge to tackle climate change in a flexible and accessible way – and at scale.

The Press & Assessment is committed to reaching carbon zero on its energy-related emissions by 2048. The organisation is a proud signatory of the UN Global Compact, the world’s largest corporate sustainability initiative, and reports annually on its progress. This reporting year, the Press & Assessment reduced its scope 1 and 2 carbon emissions by 9% across its UK operations and remains on track to meet its science-based target to reduce energy-related emissions. For more information, the Press & Assessment carbon report is available at https://www.cambridge.org/carbonemissionsreport.

Financial highlights

The University’s audited financial statements for the year ended 31 July 2024 are included in the next section of this Reporter issue, p. 294 to p. 376. The following analyses, extracted from those financial statements and the accompanying financial review, summarise the University’s sources of income, surplus for the year and the factors affecting net assets.

Group income

The Group’s income has increased by £112m (up 4%) compared to the prior year, due primarily to a continued strong performance from Cambridge University Press & Assessment, and increased tuition fees and education contracts, donations and endowments, and investment income.

Group net assets

The Group’s net assets totalled £7,991m at 31 July 2024 (2023: £7,168m). The increase in net assets substantially reflects non-cash credit adjustments of £344m relating to the USS pension scheme deficit recovery provision, £346m of net investment gains, and £13m relating to the fair value revaluation of the Group’s CPI-linked bond, combined with actuarial gains of £99m on the Group’s defined benefit pension schemes.

Cash and cash equivalents (excluding cash held in the CUEF) increased from £399m to £479m in the year, primarily as a result of transfers between short term investments and cash. There was an operating cash outflow of £58m (2023: inflow of £26m).

Group surplus for the year

The Group generated a reported surplus for the year of £726m (2023: £199m). After adjusting for the fair value revaluation, the CPI index linked Bond, change in USS pension deficit recovery provision, donations, endowments and capital grant income, and the CUEF income on a distribution basis, the underlying ‘adjusted operating deficit’ was £16m (2023: £10m). The University considers this to be a meaningful, consistent measure of underlying recurrent operating performance.