PolyU's Financial Structure and UGC Funding

Government subventions fell from nearly 60 per cent of total income five years ago to under half today, while tuition income nearly doubled to fill the gap — the crossing point of those two curves on the same set of financial statements is where PolyU's fiscal transformation can be mapped. The Hong Kong Polytechnic University (PolyU) consolidated information database · Finance module. For the specific pipelines of research funding (RGC competitive grants, RMGS matching grants), see finances-2.md.

Data currency note: this module takes PolyU's official Financial Report, published by the Finance Office, as its highest-credibility source, supplemented by the Annual Report, the University Grants Committee (UGC) and government press releases; media round-ups are used for horizontal comparison only. PolyU's financial year runs from 1 July to 30 June (so "2024/25" means 1 July 2024 to 30 June 2025). As of writing (June 2026), the latest full set of statements published is the Financial Report 2024/25. All figures are in Hong Kong dollars (HK$) unless otherwise stated, and the financial year is noted wherever possible. Readers citing these figures should defer to the Finance Office's official reports.

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# 1. Total Annual Income and Expenditure: Overview

PolyU is a statutory public university funded through the University Grants Committee (UGC). By total income, it has long sat in the middle-to-upper tier among Hong Kong's eight publicly funded universities (below HKU and CUHK, in the same second tier as CityU and HKUST). In recent years its income has grown steadily, driven mainly by rising tuition fees and a recovery in investment returns, while the share of government subventions has kept falling.

# 1.1 Five-Year Income, Expenditure and Surplus (University basis, 2021–2025)

The table below is drawn from the "Analyses of income and expenditure account 2021–2025" in PolyU's Financial Report 2024/25 (University scope; HK$'000):

Scope note: the above table uses the University basis. On the Consolidated basis, total income for 2024/25 was HK$10,748 million, and HK$10,051 million for 2023/24^※ (income analysis table, Financial Report 2024/25).

# 1.2 Annual Surplus

PolyU has maintained a steady surplus in recent years:

Per the Financial Report 2024/25: in 2024/25 PolyU recorded a University surplus of HK$493m (2023/24: HK$537m) and a Consolidated surplus of HK$691m (2023/24: HK$693m). Per the Financial Report 2023/24: the 2023/24 University surplus was HK$537m (2022/23: HK$935m) and the Consolidated surplus HK$693m (2022/23: HK$1,010m). The surplus has thus trended gently downward over the past three years, but has remained positive throughout.

# 1.3 Structure of Total Expenditure (2024/25, Consolidated)

Expenditure analysis from the Financial Report 2024/25 (Consolidated basis):

Staff costs are the single largest and most rigid line item: per the Financial Report 2024/25, staff costs and benefits rose by HK$442m to HK$5,497m in 2024/25, roughly 62 per cent of the University's total expenditure**^※; the increase was due mainly to a larger academic and research staff complement and salary adjustments in line with inflation and market levels. This means the largest and hardest item of expenditure to squeeze each year is staff remuneration — and correspondingly the most sensitive one under any funding cut.

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# 2. Structure of Income

PolyU's income comes in five main blocks: Government Subventions (UGC), Tuition & Other Fees, Interest & Investment Gain, Donations & Benefactions and Other Income.

# 2.1 Main Income Lines, 2024/25

Income analysis table from the Financial Report 2024/25:

# 2.2 Government Subventions (UGC): steady in absolute terms, sliding as a share

The UGC subvention remains PolyU's single largest income source, but its share of total income has been falling steadily — not because the grant has been cut, but because tuition and investment income have grown faster and diluted its relative weight. It is only from 2025/26 that the government side enters a phase of actual funding cuts.

A 2 per cent cut over the 2025/26–2027/28 triennium: according to the government's 2025/26 Budget and media round-ups, the total UGC allocation to the eight universities over the next three years is set at roughly HK$68.1 billion^※, which already incorporates a 2 per cent annual reduction — about HK$2.8 billion in total across the three years (an average of about HK$22–23 billion a year). This is a rare, across-the-board funding cut. In its own press releases, PolyU has welcomed the measures in the 2024-25 and preceding Budgets to promote the commercialisation of research outputs (PolyU media release^※); the University has made no negative public comment on the cuts.

# 2.3 Tuition Fees: the second pillar, and growing

Tuition and other fees are already PolyU's second-largest income block, and growing fast: on the University basis, they rose from HK$1,759m (22.5%) in 2020/21 to HK$3,110m (33.2%) in 2024/25^※ — nearly doubling in five years. PolyU's Financial Report 2024/25 states explicitly that the growth in University total income for the year was "mainly attributable to an increase of HK$594 million in tuition and other fees".

Tuition policy for local students on UGC-funded programmes is set uniformly across Hong Kong; PolyU moves in step with the other seven universities:

• The freeze: the UGC-funded degree tuition fee was last adjusted in 1997/98, when it was set at HK$42,100 per student per academic year; it then stayed frozen for over 26 years.
• Three consecutive rises: in June 2024 the government announced that the subsidised undergraduate fee would rise by an average of 5.5 per cent a year for three consecutive years from 2025/26, moving from HK$42,100 up to HK$44,500 (2025/26) → HK$47,000 (2026/27) → HK$49,500 (2027/28)**^※.
• In addition, a substantial part of PolyU's tuition income comes from non-UGC-funded programmes (self-financed and postgraduate courses, plus continuing-education courses run through its subsidiary CPCE) — which is why the "Consolidated" tuition figure (HK$4.064 billion) is far higher than the "University" figure (HK$3.110 billion).

# 2.4 Interest and Investment Returns: the amplifier and the spoiler

Interest and investment gains are the most volatile line in PolyU's income. On the University basis, the past five years read: 2020/21 ~+HK$801m; 2021/22 ~−HK$482m (a loss); 2022/23 ~+HK$360m; 2023/24 ~+HK$579m; 2024/25 ~+HK$810m (five-year analysis table, Financial Report 2024/25^※).

• Per the Financial Report 2024/25, as at 30 June 2025 about 86 per cent of PolyU's investments were in fixed-income securities; the growth in investment income in 2024/25 was "mainly attributable to an increase in unrealised gains from equity investments".
• PolyU also operates a Hotel Development Fund (HDF), whose investment returns are initially recognised as deferred income; in 2024/25 the interest and investment gains recognised from this source amounted to HK$117m (2023/24: HK$81m)^※.

# 2.5 Donations & Benefactions

Donations and benefactions are a modest but stable income source for PolyU, and have grown steadily in absolute terms in recent years. On the University basis they rose from HK$167.6m (2.1%) in 2020/21 to HK$348.5m (3.7%) in 2024/25^※ — more than doubling in five years. For the named donors behind specific buildings, research institutes and endowed chairs, see ./benefactors-and-donors.md; this page does not repeat the roll of names.

PolyU also runs the PolyU Foundation and an Institutional Advancement Office to coordinate fundraising; some donations are recognised in income for the year, while others are placed in designated Restricted Funds that operate over the long term.

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# 3. Reserves, Net Assets and Endowments

# 3.1 Net Assets

PolyU's financial statements reflect its reserve strength through Net Assets and a set of funds (Restricted Funds, Deferred Capital Funds, etc.). Per the Financial Report 2024/25:

Balance-sheet detail (HK$'000): consolidated net assets 12,317,947, of which Restricted Funds 5,253,464 and Deferred Capital Funds 3,802,766^※. Per the Financial Report 2023/24, consolidated net assets rose 6 per cent from HK$10,935m to HK$11,627m in 2023/24, and University net assets rose 5 per cent from HK$10,056m to HK$10,593m (Financial Report 2023/24^※).

# 3.2 The Eight Universities' HK$4 Billion "Return": PolyU Must Hand Back HK$422 Million

In 2025/26, on top of the funding cut, the government also required the eight universities to return reserves in a one-off exercise. The "Financial Outlook" section of the Financial Report 2024/25 states this explicitly:

"Following a review of the balances of the General and Development Reserve Fund (GDRF) of the eight UGC-funded universities, the Government of the Hong Kong SAR has required the eight universities to return a total of HK$4 billion of reserves on a one-off basis in the current year. Based on its GDRF balance, the University is required to return HK$422 million to the Government in three equal instalments in the first quarter of 2026." — Financial Report 2024/25^※

In the same section, PolyU stresses that after the return its "financial position remains robust" and that it retains ample strength to support its strategic objectives in teaching, research and knowledge transfer, and will "develop and implement mechanisms to optimise the use of surplus and reserves for strategic initiatives".

Background check: according to media round-ups, the eight universities hold total reserves of about HK$139.3 billion, of which roughly HK$11.1 billion sits in the "General and Development Reserve Fund" without designated use^※; the government's clawback mechanism targets precisely this spendable balance. The HK$422 million PolyU must return is its own share of the eight universities' combined HK$4 billion (per the official statements — more precise than any media account).

# 3.3 Endowments and Restricted Funds

Unlike some American universities, PolyU does not publish a single headline "endowment" figure by total market value. Its donated capital is reflected mainly in the Restricted Funds line of the financial statements and in various named/designated funds (scholarships, endowed chairs, research funds, etc.), which are invested as portfolios over the long term with the income spent on their designated purposes. Per the Financial Report 2024/25, consolidated Restricted Funds stood at HK$5,253m^※. In addition, PolyU receives cash and in-kind donations through the PolyU Foundation, and maintains special vehicles such as the Entrepreneurship Investment Fund (EIF), which had invested in 19 start-ups^※ as of 2024/25.

Note: PolyU's published statements do not present a single "total endowment market value / portfolio size" figure; readers seeking that metric should work through the Investments note to the financial statements and the Restricted Funds note (Note 10) line by line. This module makes no claim about a single "total endowment" figure (no unified disclosure exists).

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# 4. Key Points at a Glance

1. Scale (both scopes): in 2024/25 total income was HK$9,360m (University) and HK$10,748m (Consolidated), both five-year highs; the annual surplus was HK$493m (University) and HK$691m (Consolidated). Historically, the investment swing to a loss (about −HK$482m) in 2021/22 pushed total income back down to HK$6.6 billion (University basis).
2. Income structure: the UGC government subvention remains the single largest source, but its share has slid from 59.0% in 2020/21 to 47.1% in 2024/25 (first time below half); tuition and other fees have nearly doubled in five years to 33.2% on the University basis, becoming the second pillar; investment returns are the most volatile line and the amplifier of the surplus.
3. Expenditure: staff costs (staff costs and benefits) amount to about HK$5,497m, roughly 62 per cent of University expenditure — the largest rigid line item.
4. Reserves/net assets: in 2024/25 consolidated net assets were HK$12,318m (+6%), University net assets HK$11,086m (+5%).
5. Funding cuts and clawback: over the 2025/26–2027/28 triennium, UGC allocations are cut by 2 per cent overall, about HK$2.8 billion (on a total of about HK$68.1 billion); separately, the eight universities must return a combined HK$4 billion in reserves, of which PolyU must return HK$422m, in three equal instalments completed in the first quarter of 2026.
6. Donations: donation and benefaction income has risen in five years from about HK$168m to about HK$349m (University basis); for the named donors behind buildings, see ./benefactors-and-donors.md.

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# Appendix: Institutional Background — Where PolyU's Money Comes From

PolyU's financial structure is rooted in Hong Kong's "Eight Universities + UGC + RGC" funding system. Understanding that system is the key to reading the institutional logic behind the income columns (for a fuller treatment, see 12 Misc · The UGC Funding System).

# Three Main Funding Pipelines

• UGC recurrent subvention: allocated to the eight universities by the University Grants Committee on a cyclical basis; it is the foundation of PolyU's finances. Its declining share (now below half for the first time) reflects the diversification of PolyU's income sources.
• Competitive research funding: PolyU's academic research relies mainly on funding distributed competitively by the Research Grants Council (RGC) — PolyU competes for it against the other seven universities. Per UGC data, the 2025/26 round of General Research Fund (GRF) awards totalled 1,164 projects and about HK$1.043 billion (across all eight universities combined).
• Donations and matching: the government's Research Matching Grant Scheme (RMGS, from 2019) matches private donations at a set ratio, incentivising universities to attract private money — part of the institutional explanation for why PolyU's donation income has nearly doubled in five years.

Data note: the GRF 2025/26, RMGS and other scheme-level figures come from official UGC sources (as cited via 12 Misc · The UGC Funding System); PolyU's income shares, the cut and the clawback figures come from PolyU's financial reports (see the sections above).

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