Expenditure

Total expenditure was £1,327.2 million, an increase of 7.0% (£86.9 million) on the previous year, when we exclude the impact of the movement in the pension provision. Expenditure has grown at a compound annual growth rate of 6.4% since 2019–20.

Staff costs

Staff costs (excluding pension provision) increased by 8.4% to £700.1 million in 2023–24, £54 million higher than the previous year. £13.3 million of this increase related to research grants and contracts and was externally funded.

The overall number of full-time equivalent staff grew by 4.5%. There was an uplift in our net recruitment in academic, research and professional services staff. Some of this increase is reflected in the increase in externally funded research activity, however most of the increase related to an additional c. 240 full-time equivalent posts in professional support roles. Areas the latter have been deployed into include: boosting support for student mental health and well-being; enhancing our information and communications technology to deliver a world class digitally enabled experience for applicants, students and alumni; enhancing the capacity within our property teams to support the development of our estate.

At the latest valuation of its financial position in 2023, the USS pension scheme recorded a surplus of £7.4 billion. This represented a significant improvement on the previous valuation in 2020, which had concluded that the scheme was in a deficit of £14.1 billion. This has led to the reversal of a £244.7 million pension provision in respect of the deficit and employer contributions to the scheme reduced from 21.6% to 14.5% in January 2024. Early implementation of part of the 2024–25 pay award (£5.6 million) was facilitated through the savings generated from the reduction in contributions to the USS pension scheme.

The SAUL pension scheme now has a surplus of £134 million, an increase on the deficit of £217 million reported in the 2020 valuation. The amount employers contribute for individuals in the career average part of the scheme fell from 21% to 19% of salaries from September 2024 and will feed through into next year’s financial results.

Non-staff costs

Operating expenditure increased by £39.6 million to £515.4 million in 2023–24, with £28.5 million of that increase relating to premises costs. Premises costs were 93.8% higher than two years before (2024: £153.5 million; 2022: £79.2 million). Utilities costs remained at elevated levels (2024: £58.9 million; 2023: £64.7 million) for although market prices fell, we no longer had any benefit from government price-capping; the cost in 2022 was £19.7 million. Part of the increase in premises costs in 2023–24 was in respect of dilapidation work (£5.7 million) as we met and provided for contractual obligations on certain leasehold properties that we will be returning to their landlords. The recharges from the NHS for the use of their space increased to £13.9 million in 2023–24 from £7.0 million in the prior year and we started incurring facility charges (£2.4 million) for use of the new MRC Laboratory of Medical Sciences at our Hammersmith Campus. Investment in increasing activity at our White City Campus and additional maintenance work account for most of the remainder of the increase.

Gains on investments

Imperial has a portfolio of endowed assets (2024: £235.2 million; 2023: £220.1 million) that are managed alongside a portfolio of non-endowed funds retained by the University for long-term growth. The combined portfolios are invested in a range of equities, bonds, property and cash with a target to deliver a total return (income plus capital gain) of at least CPI +5% on a rolling ten-year basis. As at 31 July 2024 the ten years’ annualised return was 7.0% against a target of 8.1%. (2023: annualised return of 6.1%). The gain on investments reported in the financial statements of £41.0 million (2023: £7.7 million) was driven by strong performance in the equity and bond portfolios (2024: £35.8 million; 2023 £14.5 million) and gains on investment property (2024: £5.5 million; 2023: -£7.0 million).

Capital

Significant investment in Imperial’s physical and digital infrastructure continued this year with capital additions of £168.2 million in 2023–24 (2023: £134.9 million).

Major projects undertaken included continued rationalisation of the Faculty of Medicine’s estate, with the final £8 million invested in the new School of Public Health which opened this year at our White City Campus. This new facility will be instrumental in driving advances in health policy and preventing and treating disease. We are extremely grateful to the generosity of two benefactors who each contributed £20 million towards the cost of this building of £57 million. An additional £42 million was spent on the refurbishment of the Clinical Research Building (home to the National Heart and Lung Institute) that is set to become Imperial’s first fossil fuel-free building. We are also grateful to have received a £10 million gift towards the cost of refurbishment of this building.

The other major project undertaken this year was the replacement of our existing steam boilers with low temperature hot water boilers as part of our carbon net zero strategy, with a government grant helping fund the total cost of £41 million.

Cashflow

Cash from operations of £81.1 million was £24.7 million higher than the previous year (2023: £56.4 million).

Imperial benefited from favourable working capital movements this year with net working capital improving by £41 million. The amount of funding we receive in advance of research work being undertaken improved by £34.7 million, partially offset by an £8.4 million increase in amounts due on other research contracts. Accruals were higher at this year-end as higher service charges from the NHS for using their space fed through.

Cashflow from financing activities remained broadly in line with the previous year, with no new borrowing undertaken during the year and most of our debt on fixed rates. Repayments for amounts borrowed fell by £3.8 million as one of our amortising loans had been fully repaid in the prior year. Net cash investments increased by £42.0 million in comparison with the previous year as a result of the higher level of capital investment described above.