UCC slashes deficit despite 'very difficult' year with finances hit by Covid

The university had achieved the smaller deficit through budget management and by boosting income, particularly from overseas students

UCC said it had secured €21m out of €168m funding available under Government supports to deal with the pandemic, and got €1.36m in Government-funded wage subsidies.

University College Cork slashed its deficit last year, despite the challenging impact of the Covid-19 pandemic on the college’s finances.

The latest annual accounts for UCC show the university reported a net deficit of €2.3m for the 12 months to the end of September in 2020, compared to a deficit of €5.6m a year earlier. 

Total income at the college fell €11.7m, or by 2.7%, to €421.1m.  However, there was also a 2.9% fall in overall expenditure to €426.4m due largely to a fall in operating expenses.

UCC treasurer Dermot O’Mahoney, said the impact of the Covid-19 pandemic on all areas of the university’s activities had posed significant financial challenges.

Mr O’Mahoney said it had achieved the smaller deficit through budget management and by boosting income, particularly from overseas students. 

Revenue from international students increased by €1.6m to €37.1m, while total academic fee income grew almost €4m to €151.2m. The growth in self-generated fee income reflected UCC’s continued priority to secure its financial sustainability, he said. 

However, the treasurer said other commercial revenue sources such as from its campus retail outlets were severely impacted. Research funding also declined by 5% to €94m. 

Mr O’Mahoney said exchequer funding continued to decline as a proportion of overall income and that the trend was likely to continue. 

Grants from the State increased to 14.6% of total income last year, Mr O’Mahoney said, reflecting additional and once-off Covid-19 funding. 

UCC said it had secured €21m out of €168m funding available under Government supports to deal with the pandemic, and got €1.36m in Government-funded wage subsidies.

Staffing costs fell by €1m to €257.6m largely due to a fall in pension costs, while there was also a fall in in "occasional" staff costs due to online teaching and examinations.

During the year, UCC sold its shareholding in a former spin out company, Alimentary Health - now known as PrecisionBiotics - to a Danish pharmaceutical firm for which it will receive an initial €4.16m. It could get as much as €6.48m from the deal by 2023. 

Meanwhile, the college’s cash reserves shrunk by €5.6m to €84.6m. The pandemic had created “a very difficult operating environment for the higher education sector”, the treasurer said, adding that Covid-19 would continue to weigh on its finances in this year’s accounts. 

However, he said the university had prepared financial projects and forecasts and was confident that its ongoing activities can be sustained in the current environment.

The treasurer said the reliance by UCC and other universities on non-State income for over half of their their overall revenue was threatening the sector’s ability to deliver its services, in a sustainable manner. Mr O'Mahoney also expressed concern at the decline in capital funding.

He said the level of recurrent funding for students would not sustain borrowings to fund essential investments in infrastructure.