Finance White Paper

In July 2022 Council approved the Finance White Paper for implementation from 1 August 2023. The Finance White Paper will implement a series of proposals to improve financial planning processes within the University. These proposals create a settlement for historic reserves, then create cash-backed reserves for surpluses going forward, simplify funding flows and introduce a 3 year settlement for central charges. A three-year settlement that supports the financial sustainability of the University was agreed by Council on 13th March 2023. It is important to realise that the changes set out in this Finance White Paper do not of themselves ‘create’ any more money. They are expected to increase transparency, improve decision making, better align governance with financial responsibility, provide better financial incentives to increase both income and value for money, and promote more informed investment in the University’s academic future.

The Finance White Paper proposals have been approved by Council after substantial engagement with divisions, department and the services over the past two years. Academic divisions have reviewed the proposals in detail and consulted extensively with their departments, and their views as well as feedback from across the whole University via a consultation exercise in Trinity Term 2022 have substantially informed these proposals in the Finance White Paper

The subheadings below aim to explain the rationale behind the Finance White Paper and describe the proposed changes

  • A lack of transparency and accountability make it difficult to identify the financial consequences of decisions and ensure that there is alignment of costs and benefits;
  • The surplus that the academic divisions1 generate is being double-counted, as part of the surplus is required to fund core University investments;
  • A number of the academic divisions are in recurrent financial deficit;
  • There is a lack of clarity over the status and use of historic departmental reserves;
  • Financial planning is focused on a single year; and
  • There is insufficient provision for future capital requirements and for meeting increasing challenges in providing essential services such as IT and repairs and maintenance.

1Note – in the context of the Finance White Paper, ‘division’ means the grouping of academic departments acting collectively as one of the four academic division 

The Finance White Paper’s proposals have been guided by the following principles:


All parts of the University have a responsibility for the financial well-being and viability of the University as a whole, now and in the future.

1. Financial information should be used to inform decision-making by transparently linking income, expenditure and funding.

2. Decisions should be made with awareness of current and future financial implications at departmental, divisional and University level.

3. Incentives should ensure the alignment of short, medium and long-term interests and encourage efficiency and effectiveness across the University.


Financial responsibility should be held at the lowest appropriate level.

1. Governance, decision-making and accountability should rest at the same level as financial responsibility.

2. Financial responsibility includes the compliant and sustainable management of income, expenditure & investment (the ‘as earned’ model).

3. The application of subsidiarity should take into account the importance of fairness and the need for appropriate standards of service and infrastructure across the University.

  • A simplification of funding flows – the abolition of the current 123 infrastructure charge and capital charge and the introduction of new Space and Service Charges;
  • The elimination of the double-count by introducing a Contribution from the divisions, to be transparent about how the divisions are contributing to the funding of a number of specific University activities agreed by Council;
  • A three-year funding settlement for the new charges and Contribution to provide greater certainty to all parts of the University and support longer-term planning;
  • The creation of cash-backed reserves to enable the divisions and departments to manage the financial ‘ups and downs’ each year, plan for income and expenditure over more than one year and fund modest investment to sustain and grow income;
  • Drawing a line under the historic reserves, with deficit reserves being written-off, surplus reserves being maintained, with the access to surplus reserves being broadened;
  • Continuity of access to accumulated PI funds and SRF reserves and
  • The abolition of the 1.25% financing charge.

These reforms are underpinned by the creation of new governance arrangements for the revised funding flows, enabling the divisions departments and the services to consider collectively the best way to support academic activity across the University.