The University of Melbourne released a report on its financial position for the year ending December 31, 2020 and its financial outlook for 2021.

The university’s preliminary and unaudited accounts show an operating surplus of about $8 million for the 2020 year, in the face of a fall in revenue of $275 million dollars and additional costs including $60 million in student support grants.

The positive result is being attributed largely to a $360 million dollar cut in spending. The university says other measures that were put in place to manage the financial impact of the Covid-19 pandemic included reducing capital expenditure by more than $300 million, drawing down on the university’s financial reserves by $120 million and increasing debt by $300 million.

One-hundred and ninety staff took voluntary redundancies while a “very small handful” of staff were made involuntarily redundant.

“Throughout this time, the resilience shown by our students and staff has been incredible”

Vice-chancellor Duncan Maskell said the result is due to prudent financial management and the resilience of the university community.

“The pandemic has resulted in us needing to make difficult decisions, including some that have led to a number of valued colleagues leaving the university,” he said.

“Throughout this time, the resilience shown by our students and staff has been incredible. Repeatedly, they [the staff] have overcome the challenges created by the pandemic to continue to deliver the world-class teaching and research that the University of Melbourne is renowned for.

“At the same time our students, who have been unable to study on campus and immerse themselves in university life, have embraced online learning. They too have adjusted and overcome the difficult circumstances that confronted them over the past 12 months.”

The university also reported a boost in enrolments in Semester 2, plus an increase in the number of subjects that students took in the last half of the year.

Looking ahead, the university expects the challenging outlook to continue into 2021 and 2022, anticipating a continued fall in revenue over the next two years, resulting in the loss of almost $900 million in revenue over three years.

However it is believed further job cuts may not be as dire as first predicted in August last year when staff were told 450 permanent staff would be axed. Maskell said the 2020 result means it is possible job losses could ultimately be “considerably less than 450”.

Domestic student enrolments are on track, but international student enrolments have fallen. Currently, more than 23,000 international students are enrolled (new and returning students) which is 10% down on last year (based on Equivalent Full Time Student Load) and is down 22% compared to pre-Covid estimates for commencing students.

Despite the result in 2020, Maskell warns the future remains extremely unclear with the only thing certain is that the effects of the pandemic will continue to be felt for several years to come. “I was inspired by what the university was able to achieve last year, but I am under no illusion that 2021 and 2022 won’t be just as challenging.”

It is the second Victorian university to announce it has emerged better than expected after Monash University announced earlier in February a $259m operating surplus. VC Margaret Gardner described it as a “buffer for the future”.