An interactive visualisation of income sources and expenditure destinations for a hypothetical "average" UK university with a £400m turnover.
Notice the significant reliance on International Tuition Fees (25% of total). Unlike government grants, this stream is highly sensitive to geopolitical changes and visa policies. A 10% drop here can wipe out the annual surplus.
Universities are people-centred organisations. Combined, Academic and Professional Services salaries typically consume 55% of all income. This "fixed" cost makes it difficult to reduce spending quickly during a downturn.
Research often costs more to conduct than the grants cover. The diagram illustrates how unrestricted income (like tuition fees) flows into the central "Treasury" pot to top up the deficit in research funding.