Material issues

In assessing what should be included in our integrated report, we applied the principle of materiality.

Material issues have been identified as those that:

We believe could affect our ability to create value in the short, medium or long-term;
Are important to key stakeholders;
Form the basis of strategic discussions and decision-making; and
Could intensify or lead to lost opportunity if left unchecked.

Insight into how the material issues identified are managed and how they impact the University are signposted here.

The student experience

Our most recent rating in the National Student Survey (NSS) of 70.4% (2022/23: 70.8%) serves to highlight the challenge in improving the student experience we offer. The University remains committed to improving student satisfaction as measured through the NSS as well as how we score in the Postgraduate Taught Experience and Postgraduate Research Experience Surveys.

It is understood that survey ratings below what we strive for has the potential to damage our reputation, affect future student recruitment and retention and therefore potentially impact unfavourably on the University’s financial health. This is particularly the case at this moment in time where growth in the International student market has become more challenging for us and for the UK higher education sector as a whole.

Strategic programmes, aligned to Strategy 2030 objectives are progressing and Our Student Support Model is now in place. We know that it may take some time for positive results to be seen and this will remain as a priority for the entire University until we see improvement desired.

This is covered in the Strategic Plan performance framework on page 11, Understanding our Risks on page 16 and from page 29 of the Operational Review.

Political and geopolitical uncertainty

As 2024 nears an end, uncertainty remains with regard to the new UK Government direction and policy on matters such as immigration and higher education. Very recent announcements on tuition fees are welcome but more clarity is needed on impact beyond 2025/26 and this will not be known until the Government sets out its long-term plan for universities.

The very recent UK Government budget announcement on employer National Insurance charges serves as an example of how the University can be significantly impacted by Government decisions.

Additionally, geopolitical tensions remain from the wars in Ukraine and the Middle East and the impact of a new US Government in 2025 is unclear. With nearly half of our student population from overseas markets, unfavourable geopolitics has the potential to impact negatively on our teaching income. Our cost base is also exposed to decisions and tensions across the globe.

This is covered in Understanding our Risks from page 14 of this document.

Financial and economic environment

The University closely monitors the changing macro-economic environment and any challenges it presents. This includes inflation, which has reduced in the last year but the impact of the recent higher inflation period is still reflected in the University cost base and inflation in some types of expenditure remain above the historic trend.

Higher interest rates over the same period have resulted in the University benefitting from increased interest income on our treasury funds. Future interest rates are uncertain but the direction is expected to be downwards, with an impact on the income the University generates.

Changes to UK National Insurance have a financial impact and will result in a significant increase in our staff costs from April 2025. The impact of our current higher cost base combined with slower growth in income from overseas tuition fees requires us to carefully monitor and control the overall financial sustainability of the University in the short, medium and longer term, and we do this through regular scenario modelling for University Court.

This is covered in Understanding our risks from page 14, in the Director of Finance’s foreword on page 38 and in the Financial Review from page 40.

Financial and economic environment

This is covered in Understanding our risks from page 14, in the Director of Finance’s foreword on page 38 and in the Financial Review from page 40.

Political and geopolitical uncertainty

The very recent UK Government budget announcement on employer National Insurance charges serves as an example of how the University can be significantly impacted by Government decisions.

This is covered in Understanding our Risks from page 14 of this document.

Climate change

The University has committed to become net zero carbon by 2040. Achieving this ambitious target is not without its challenges that the University must overcome to meet ever-growing stakeholder expectations.

Current challenges include the size and age of the University estate and energy-intensive activity such as research and supercomputing where the University plays a world-leading role.

The financial cost of overcoming technical challenges and achieving net zero carbon is significant but the University remains fully committed to tackling the climate crisis.

A refreshed version of the University Climate Strategy (2016–2026) is currently under development that will raise our ambitions further to meet stakeholder expectations.

This is covered in Understanding our Risks on page 17 and in the Operational Review from page 32.

Industrial action and pensions

For the first time since 2016 there is no mandate for staff to strike on disputes covering pay and condition. This follows successful national negotiations on pay award and changes to benefits for member of staff in the Universities Superannuation Scheme (USS).

Benefits offered to USS members have improved following completion of the 2023 valuation that showed scheme assets now exceeded scheme liabilities. As well as increasing member benefits, the scheme being in surplus also resulted in a reduction in employee contributions to the scheme.

Staff costs are the University’s greatest single cost and with pay award negotiated annually and USS valuation completed every three years, there remains a need to closely monitor developments for potential impact on staff happiness and financial cost to the University.

This is covered in note 33 of the financial statements from page 92 and the Financial Review from page 40.

Digital security

A programme of capital investment in core IT infrastructure has completed this year, with an outcome of reduced IT infrastructure risk.

The University does however remain exposed to cyber threats, presenting a risk to how we operate and perform our core activities. These threats have potentially significant financial consequences for us and therefore mitigation will remain a key area of focus for the foreseeable future.

This is covered in Understanding our Risks from page 14.

This article was published on 2025-01-23