Alfie-George Milnes-Dobbs, Faculty of Business
Leeds University Union (LUU) is one of the largest students’ unions in the country and was the first in the UK to be awarded ‘Excellent’ status by the National Union of Students (NUS). Boasting over 300 clubs and societies, a nightclub, 5 food outlets and 11 shops running such a behemoth organisation comes at a cost.
30,721 students joined one of LUU’s 330 clubs and societies, showing its presence on campus.
As a charity, separate to the University, any profits made are 100% reinvested. Any profit taken from food, drink, merchandise and event purchases in LUU is used to improve the Leeds student experience so you can be guaranteed your money isn’t going into the University’s pockets.
Leeds Finsights, the University of Leeds student ran financial publication, took a look at how LUU operated fiscally in 2019 and here’s what they found.
Overall, LUU had a total income of nearly £12.3m in 2019 with an expenditure very similar and only leaving a surplus of £2k (change from £310k deficit in the previous year due to increased grants and access to funds). With Leeds University donating the largest chunk on the income statement (a block grant of £3.4m) followed by shop income (£2.6m) and bar income (£2.6m). This shows how important revenue from shops, bars and venues is to LUU.
Shops, bars and venues make up the largest expenditures too but are followed by nearly £2m spent on student services and £570k on student advice. £720k is spent on student activities and volunteering. Total expenditure in 2019 was £12.3m showing LUU income equals expenditure.
Through Joblink (the union’s job hunting service), over the year £1.1m in wages was paid to students through the agency. Whilst the union paid over £5.5m in wages and salaries with 455 students employed (on a weekly contract) at their busiest time. LUU on average employs 329 students on weekly contracts and 165 monthly staff.
LUU has a strong balance sheet with total net assets sitting unchanged at £3.9m and a cash balance of £3.2m (of which £800k is held on behalf of clubs and societies).
Operating similar to an SME but as a non-for-profit, you can see LUU handles an enormous amount of capital annually.
Leeds Finsights is satisfied that any profit from food, drink, merchandise and event purchases at LUU is reinvested into student services like ‘Help & Support’ and club/society management, but given the data period was 2019-2020, how will this have been affected by COVID-19?
- The £5.2m income that comes from bars and shops is in jeopardy and will have had a significant reduction in 2020/21.
- Given that one in three hospitality firms face collapse and the hospitality trade body UKHospitality saw a £53.3bn year-on year drop in sales from April to September, LUU’s finances look worrisome.
- Retail looks to have suffered the same fate, if not worse with major stores plummeting into administration (Arcadia, Go Outdoors, Victoria Secret).
However, LUU stands well supported with a history of strong assets and extensive experience of operating as a large organisation, so we posed six questions: