Former polys top the debt league

Debt levels are continuing to rise among higher education institutions, with the former polytechnics still carrying the largest burden, according to an annual financial guide to the sector.

The average figure for total debt as a ratio of total income is just over 23 per cent, but this masks wide variations, with 75 of 158 institutions above the average, while the older former polytechnics have an average of almost 43 per cent.

The latest yearbook from Noble Financial Publishing says the total debt of all institutions has risen from Pounds 1,291 million in 1993 to Pounds 2,269 million in 1996, up 75 per cent. Total income has risen over the same period by 50 per cent, while assets have risen by only 32 per cent, pointing to an increasing reliance on debt by the sector.

About 20 institutions have a debt of more than half of their income, with the University of Derby bearing the largest, at 87.15 per cent of its income.

More than 92 per cent of institutions have revealed information on their finances. Sir William Stubbs, chief executive and rector of the London Institute, says in the foreword that the yearbook performs a valuable role in higher education management.

"To manage effectively, managers must have a thorough understanding of their own operation, its financial flows, the cost drivers and how income is generated. They will do even better if they gain some understanding of how things are done elsewhere and of the consequences, both financial and qualitative, of different approaches."

The University of Wales retains its place at the top of the table for endowment and interest income as a percentage of total income, with 12.08 per cent, ahead of Cambridge University in second place with 10.65 per cent. But Cambridge's total endowments of Pounds 405 million substantially exceed those of Oxford, with Pounds 293 million.

The School of Oriental and African Studies has the highest average staff costs of Pounds 33,603, which the yearbook says is a "crude indicator" of average salaries. This pushes last year's leader, King's College, London, into second place with Pounds 32,881, while Falmouth College of Arts has the lowest staff costs of Pounds 13,4.

Noble's Higher Education Financial Yearbook 1997, Pounds 195 (0131-225 9677).