UU ends 2024 with much more positive financial results than expected

It is never easy to predict Utrecht University's finances and 2024 was no exception. When the budget was drawn up at the end of 2023, the university administration thought that it would be necessary to dip into the university's reserves by 27 million euros. The financial outlook was already bleak at the time because the university anticipated that the political parties that would form the new cabinet (VVD, PVV, BBB and NSC) would reduce the budget for higher education and research. So, the university talked to the faculties about reducing the budget and cutbacks followed at the beginning of 2024.  UU started to tighten the belt when the coalition agreement was concluded in May.

These early austerity measures are counted in the annual report as a ‘windfall’. In addition, in 2024 the government compensated the nine-percent wage increase and 2023 prices with a higher amount than the actual increase in expenses. The university also got more money through research. Though there was a ‘setback’ related to the amount that faculties and the corporate offices had to set aside for unused holiday hours, UU has 30 million euros left over. That is 57 million euros less than the budget.

The money that faculties did not spend went to their reserves. The Faculty of Humanities, which did not get its finances in order in 2024, is the only one in the red. The Corporate Offices also had money left over, but that goes to the university's central reserves because the department is not allowed to have reserves.

Structurally less income
We are now in the year 2025 and the government's austerity measures are taking their toll. UU must spend 35.1 million euros less this year. One would assume that saving that amount would be easy considering the money left over from last year, but according to Paul Vooijs, Deputy Director of the Finance, Control & Administration (FCA) department, things are not that easy. 

He emphasises that windfalls are one-off, which means 'we can't count them as income every year. The government's cuts are structural. What you can say is that the university has a little more meat on its bones to better cope with budget cuts in the next few years.’

UU expects the budget cuts to amount to 70 or 90 million euros by 2029. ‘As far as the near future is concerned, we do not yet know what the cabinet's spring memorandum has in store for higher education,’ he warns. ‘That could be disappointing, given all the geopolitical developments.’

A few windfalls and a setback
Plus 10 million. UU received more money from the national government as compensation for the increase in wages and prices in 2024. UU was not sufficiently compensated when wages rose by 9 percent in 2023, so the government made up for the loss in 2024. 

Plus 9.4 million. This is a supplementary payment from 2023 plus the payment for 2024. UU receives this money from the government to acquire EU subsidies.

Plus 6 million. This amount is a correction to research costs. The faculties had initially booked this amount as a loss item.

Plus ‘an unspecified amount’. In 2024, the faculties and corporate offices already saved money in anticipation of the austerity measures expected in 2025. This was accomplished by not filling all vacancies and closing most buildings during the Christmas holidays.

Minus 8 million. This must be added to ‘expenditures’. In 2024, UU had to keep 80 million aside for unused vacation days from previous years*. That amount has risen by a total of 8 million euros compared to 2023. This is partly because UU used an ‘average hourly rate for leave’ in the calculations of previous years and has since made this calculation more accurate. The more someone earns per month, the more expensive an hour off is. The hours (including those from previous years) have become more expensive due to the collective labour agreement increase.

*Those hours have an expiration date. Statutory leave expires after a year and a half, while non-statutory leave expires days after five years. Compensatory hours expire after a year.

How will the faculties, corporate offices and UU as a whole perform in 2024?

The faculties ended 2024 with a positive result of 12 million, which is 29 million more than expected. Only the Faculty of Humanities, which is in financial trouble, ends with a deficit of 2.5 million euros, whereas the budget assumed that the faculty would reach the end of the year with a small surplus of 75,000 euros.

The corporate offices and other departments also finished the year with a positive result: 10 million euros. That is 15 million more than expected when the budget was drawn up.

The University Corporate Offices (UBD) closed with a positive result of 6 million, which is 11 million more than expected. This is mainly due to the higher compensation for increased wage costs and because less money was spent on Asturias (access restricted to those with a Solis ID), the programme that the university uses for the administration of purchasing, personnel and finances.

UBD has an austerity assignment of 14.7 million for 2025, of which 6.9 million will have to be figured out throughout the year. UBD could get away with it if the Executive Board decides that the positive result from 2024 can be used for this purpose. However, the money the UBD has left over goes to the reserves of the entire university because this department is not allowed to have reserves of its own.

The Utrecht University Fund also had a windfall in 2024. The foundation ended up 3.7 million in the black.

In addition, money that had been reserved for Utrecht University Holding in 2023 had to be reversed. It was released again in 2024 and amounts to 1.8 million euros.

UU's ‘concern’ has achieved a better result. It was expected that the administrative service would withdraw almost 10 million from the general reserves, but that turned out to be only 2.6 million.

The interest on the savings also yielded more than expected. In total, UU has received 14.2 million euros in interest. The Executive Board is asking the University Council for permission to put this amount into the ‘savings account for construction and renovation projects’. Officially, this piggy bank is called the ‘interest reserves’ and its purpose is to enable the university to pay interest when it has to borrow money to finance construction and renovation projects.

Research
At the end of 2024, Utrecht University had a portfolio of research projects worth 1.73 billion euros, which is 107 million more than at the end of 2023. Most of the grants came from research financier NWO and the European Union, which account for approximately 1 billion euros when combined. Other financiers include non-profit organisations, governments and companies. The faculties of Geosciences, Veterinary Medicine and Medicine contributed the most to the growth. The research portfolios of Science and Humanities shrank last year by 1 and 7 percent respectively.