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Oxford loses £100m in credit crunch

Oxford University has revealed that it has lost more than £100 million as a result of the global economic recession. Over the course of the past year, investments in the University have fallen from £689 million to £593 million.

The University’s financial statement was published on the 12th January. It covered the period July 2007-July 2008 and exposed what the University has described as a “relatively modest decline” of 5.1 percent, from £688.6m to £653.5m.

However, an additional note covering the period up to October 2008 was also included “in order to meet interest in the impact of the more recent global financial downturn”. This note shows that the decline from July 2007 to October 2008 is much larger. It has fallen 14 percent, to £592.5m.

These figures do not cover the losses sustained by the individual colleges, or the £30 million in savings that have remained frozen in Icelandic bank accounts since the Icelandic banking collapse last October.

It is as of yet uncertain whether this will be returned to the University. A spokesperson commented that, “We’re still looking into whether that is lost money or not”

However, a University statement stressed the need to “put the drop in context” and compare it to the losses sustained by the rest of Britain’s equity market.

They said, “to put the drop in context, the average UK equity market fall from its peak has been in the order of 40%. Endowment returns account just 4.5% of the University’s overall income, so Oxford is much less exposed than many institutions to falls in equity markets.”

Another spokesperson also stressed the need to remember that Oxford has revealed more information than many other institutions. He said: “If Oxford is going to be compared to other institutions, it is necessary to remember that we have actually given out more information than a lot of universities. Most have only produced financial statements that end earlier in the year, whereas ours goes up to October.

“For example, if you compare our losses against what Cambridge lost, they have lost something in the region of 80 million over the period from July 2007-July 2008. We have lost slightly more than that but over a longer period.”

These setbacks come after Oxford embarked on a massive campaign for funding last year. This aimed to raise £1.25 billion to help the University compete with wealthy American rivals.

Among the projects university administrators hoped to fund were the development of the old Radcliffe Infirmary site and new buildings for the Bodleian.

At the time, University Vice-Chancellor John Hood stressed the importance of the drive for funding. He told his team that they “must significantly increase the University’s endowment.”

The University was unable to offer precise amount of money raised to date, but a spokesman claimed that the campaign was “still going well”. However, he declined to predict the effects that the economic downturn might have on the campaign’s future.

Research funding may be another victim of the credit crunch. A University statement declared that, “we are also alert to the fact that over the longer term the global downturn may well affect Oxford’s other sources of income, such as external research funding. Again, we will be monitoring the situation closely.”
As a result of the economic and funding downturn a push for an increase in the tuition fees may be made.

Last October, Oxford Vice-Chancellor John Hood stated that the “grave deficit” in the University’s accounts meant that a rise in top-up fees is “inevitable” if the quality of an Oxford education is to be maintained.

He was supported by Malcolm Grant, chairman of the Russell Group, who expressed support for the removal of the £3,000 cap on tuition top-up fees after a review in three years time.

The Government is about to begin reviewing whether the cap on student fees should be lifted to enable universities to charge “US-style” fees of up to £20,000 a year.

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