PolyU’s Financial Structure and UGC Funding

The government subvention share has slid from nearly 60% to under 50% in five years, while tuition income has nearly doubled to fill the gap—on a single set of financial statements, the point where those two curves cross marks the coordinates of PolyU’s fiscal transformation. ​The Hong Kong Polytechnic University (PolyU) Integrated 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 treats the official Financial Report published by the PolyU Finance Office as the source of highest reliability, supplemented by the Annual Report, University Grants Committee (UGC) documents, and government press releases. Media round-ups are used only for cross-institutional comparison. PolyU’s financial year runs from 1 July to 30 June (e.g., “2024/25” refers to 1 July 2024 – 30 June 2025). As of this compilation (June 2026), the latest complete official statements published are those in the ​Financial Report 2024/25. All sums are in Hong Kong dollars (HK$) unless otherwise stated, and the financial year is indicated wherever possible. Readers citing these figures should defer to the official statements issued by the PolyU Finance Office.

---

# 1. Overview of Annual Total Income and Total Expenditure

PolyU is a statutory, publicly funded university under the aegis of the University Grants Committee (UGC). Among Hong Kong’s eight UGC-funded institutions, its consolidated income has long been in the upper-middle tier (below HKU and CUHK, and broadly in the same second tier as CityU and HKUST). In recent years the University’s income has grown continuously, driven mainly by rising tuition fees and a recovery in investment returns, while the share contributed by government subventions has kept shrinking.

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

The table below is drawn from the “Analysis of Income and Expenditure: 2021–2025” set out in the Financial Report 2024/25 (University basis; in HK$’000):

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

# 1.2 Annual Surplus

PolyU has sustained a steady surplus in recent years:

Per Financial Report 2024/25: for 2024/25, PolyU recorded a University surplus of HK$493 million (2023/24: HK$537 million) and a Consolidated Entity surplus of HK$691 million (2023/24: HK$693 million). Per Financial Report 2023/24: for 2023/24, University surplus was HK$537 million (2022/23: HK$935 million) and Consolidated Entity surplus was HK$693 million (2022/23: HK$1,010 million). The surplus has thus trended modestly downwards over the last three years, but has remained consistently positive.

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

Based on the expenditure analysis in the Financial Report 2024/25 (Consolidated Entity basis):

Staff costs are the largest, most rigid single item: per the Financial Report 2024/25, staff costs and benefits rose by HK$442 m to HK$5,497 million, accounting for about 62% of total University expenditure^※ in 2024/25; the increase was driven mainly by growth in the number of academic and research staff and by salary adjustments pegged to inflation and market benchmarks. This means that the largest and least compressible item of annual expenditure is staff remuneration—which also makes it the most sensitive line when funding cuts bite.

---

# 2. Income Structure

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

# 2.1 Principal Income Components in 2024/25

Per the income analysis table in the Financial Report 2024/25:

# 2.2 Government Subventions (UGC): Steady Absolute Sum, Shrinking Share

UGC grants remain PolyU’s single largest source of income, yet their share of total income has been on a persistent downward path—not because the grants have been cut in absolute terms, but because tuition and investment income have grown faster, diluting their relative weight. Only from 2025/26 does the government enter a cycle of real cuts in absolute funding.

2% cut over the three-year period 2025/26–2027/28: According to the Government’s 2025/26 Budget and media round-ups, the total UGC grant to the eight institutions over the coming three-year period has been set at about HK$68.1 billion^※, which already incorporates a 2% annual reduction, totalling around HK$2.8 billion over the three years (averaging roughly HK$22–23 bn per year). This is a general funding cut of a kind rarely seen. A PolyU press release noted that the University welcomed the measures in the 2024-25 and previous Budgets to promote the commercialisation of research outcomes (PolyU media release^※); no negative comment on the funding cut has been made at the official level.

# 2.3 Tuition: The Second Pillar, With a Steadily Rising Share

Tuition and other fees already constitute PolyU’s second-largest income block and have been growing rapidly: on a University basis, this line has gone from HK$1,759 million (22.5%) in 2020/21 to HK$3,110 million (33.2%) in 2024/25^※, nearly doubling in five years. The Financial Report 2024/25 explicitly notes that the increase in University total income for 2024/25 “was mainly attributable to the increase in Tuition and Other Fees of HK$594 m.”

Tuition fees for local students on UGC-funded programmes are set on a territory-wide basis, and PolyU moves in lockstep with the other seven institutions:

• Freeze history: UGC-funded undergraduate tuition fees were last adjusted in the 1997/98 academic year, when they were set at HK$42,100 per student per year, remaining frozen for more than 26 years thereafter.
• Three consecutive years of increases: In June 2024, the Government announced that funded undergraduate tuition fees would rise for three consecutive years starting from 2025/26, at an average of 5.5% per year, taking the annual fee from HK$42,100 to HK$44,500 (2025/26) → HK$47,000 (2026/27) → HK$49,500 (2027/28)^※.
• In addition, a considerable portion of PolyU’s tuition income comes from non-UGC-funded programmes (self-financed / taught postgraduate programmes, and continuing education courses operated through the subsidiary CPCE)—which is why the Consolidated Entity tuition figure (HK$4,064 m) is so much larger than the University-basis figure (HK$3,110 m).

# 2.4 Investment and Interest Returns: The “Amplifier” and “Disruptor” of the Surplus

Interest and investment returns are the most volatile component of PolyU’s income. On a University basis, the figures for the last five years were roughly: +HK$801 m in 2020/21, −HK$482 m (loss) in 2021/22, +HK$360 m in 2022/23, +HK$579 m in 2023/24, and +HK$810 m in 2024/25 (five-year analysis table, Financial Report 2024/25^※).

• Per the Financial Report 2024/25, as of 30 June 2025 approximately 86% of PolyU’s investments were in fixed-income securities; the increase in investment gains in 2024/25 was “mainly attributable to the increase in unrealised gains on equity instruments.”
• PolyU also maintains a Hotel Development Fund (HDF), whose investment returns are initially recognised as deferred income; in 2024/25, interest and investment gains of HK$117 million (2023/24: HK$81 million)^※ were recognised from this fund.

# 2.5 Donations & Benefactions

Donations and benefactions are a stable but relatively small income stream for PolyU, and their absolute amount has grown steadily in recent years. On a University basis, this line rose from HK$167.6 million (2.1%) in 2020/21 to HK$348.5 million (3.7%) in 2024/25^※, more than doubling over five years. For specific named benefactors (buildings, research institutes, endowed chairs), please see ./benefactors-and-donors.md; this article does not repeat that roll-call of individuals.

PolyU has also established the PolyU Foundation and an Institutional Advancement Office to coordinate fundraising. A portion of donations is recognised as income in the year, while another portion is placed into designated Restricted Funds for long-term operation.

---

# 3. Reserves, Net Assets and Endowed Funds

# 3.1 Scale of Net Assets

PolyU’s financial statements use Net Assets, along with various categories of funds (Restricted Funds, Deferred Capital Funds, etc.), to reflect its reserve strength. Per the Financial Report 2024/25:

Balance-sheet details (in HK$’000): Consolidated Entity Net Assets 12,317,947; of which Restricted Funds amount to 5,253,464 and Deferred Capital Funds to 3,802,766^※. Per the Financial Report 2023/24, the Consolidated Entity’s net assets rose 6% from the prior year’s HK$10,935 m to HK$11,627 m in 2023/24, while the University’s rose 5% from HK$10,056 m to HK$10,593 m (Financial Report 2023/24^※).

# 3.2 “Clawback” of HK$4 bn from the Eight Institutions: PolyU to Return HK$422 m

In the 2025/26 financial year, on top of the funding cuts, the Government also required the eight institutions to make a one-off return of reserves. The “Financial Outlook” section of the Financial Report 2024/25 states explicitly:

“After reviewing the balances of the General and Development Reserve Fund (GDRF) of the eight UGC-funded universities, the HKSAR Government has requested the eight universities to make a one-off return of a total of HK$4 billion from the reserves in the current year. Based on the 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 emphasises that after the return, the University’s “financial position remains robust,” with ample capacity to support its strategic objectives in teaching, research and knowledge transfer, and that it will “formulate and implement mechanisms to optimise surplus and reserves for strategic projects.”

Background cross-check: According to media round-ups, the eight institutions collectively held reserves of about HK$139.3 bn, of which roughly HK$11.1 bn was in the unrestricted General and Development Reserve Fund (HK01^※); the Government’s clawback mechanism targets precisely this disposable balance. The HK$422 m that PolyU is required to return represents its share of the HK$4 bn total for the sector (a figure from the official statements, and thus more precise than any derived media figure).

# 3.3 Endowment and Restricted Funds

PolyU does not publish a single, externally facing “endowment” figure in the manner of some US universities; its endowed-type funds are mainly reflected in the financial statements as Restricted Funds and various named / designated-purpose funds (scholarships, chairs, research funds, etc.), which operate long-term as investment portfolios, with the income drawn down. Per the Financial Report 2024/25, the Consolidated Entity’s Restricted Funds balance stood at HK$5,253 million^※. In addition, PolyU receives cash and in-kind donations through the PolyU Foundation, and has set up dedicated funds such as the Entrepreneurship Investment Fund (EIF), which by 2024/25 had invested in 19 start-up companies^※.

Caveat: PolyU’s public statements do not report a single figure for “total endowment market value / portfolio size.” Readers who require that metric should reconstruct it case-by-case from the Investments note and the Restricted Funds note (Note 10) in the financial report. This module does not assert a single “endowment total” (no unified disclosure basis could be identified).

---

# 4. Key Points at a Glance

1. Scale (two bases): In 2024/25, total income reached a five-year high of HK$9,360 m (University) and HK$10,748 m (Consolidated Entity); the annual surplus was HK$493 m (University) and HK$691 m (Consolidated Entity). Historically, the 2021/22 investment swing from gain to loss (~−HK$482 m) caused total income to slump to HK$6.6 bn (University basis).
2. Income structure: UGC government subventions remain the single largest source, but their share has fallen from 59.0% in 2020/21 to 47.1% in 2024/25 (first time below 50%); tuition and other fees nearly doubled over five years, rising to 33.2% on a University basis, becoming the second pillar; investment returns are the most volatile component and act as the amplifier of the surplus.
3. Expenditure: Staff costs (remuneration and benefits) stand at about HK$5,497 m, accounting for roughly 62% of total University expenditure—the largest rigid line item.
4. Reserves / Net Assets: In 2024/25, Consolidated Entity net assets were HK$12,318 m (+6%), University net assets HK$11,086 m (+5%).
5. Funding cuts and clawback: Over the 2025/26–2027/28 triennium, the overall UGC grant is being cut by 2%, or about HK$2.8 bn (total envelope ~HK$68.1 bn); separately, the eight institutions are making a one-off return of HK$4 bn in reserves, with PolyU required to return HK$422 m, payable in three instalments in the first quarter of 2026.
6. Donations: Donation and benefaction income grew from about HK$168 m to about HK$349 m (University basis) over five years; for a roll-call of named benefactors, see ./benefactors-and-donors.md.

---

# Supplementary: Institutional Background—The System from Which PolyU’s Money Flows

PolyU’s financial structure is embedded in Hong Kong’s “Eight Institutions + UGC + RGC” funding system. Understanding that system is necessary to grasp the institutional logic behind the income categories (for a detailed institutional explainer, see 12 Miscellany · The UGC Funding System).

# Three Principal Funding Pipelines

• UGC recurrent grants: Allocated by the UGC to the eight institutions on a triennial basis, these are the bedrock of PolyU’s finances; their declining share (now below 50%) reflects the growing diversification of the University’s income sources.
• Competitive research funding: PolyU’s academic research is supported mainly by funding allocated competitively through the Research Grants Council (RGC)—where PolyU must compete directly with the other seven institutions. According to UGC data, in the 2025/26 round of the General Research Fund (GRF), a total of 1,164 projects were funded, amounting to approximately HK$1.043 bn (for all eight institutions combined).
• Donations and matching: The Government’s Research Matching Grant Scheme (RMGS, launched 2019) matches private donations on a proportional basis, incentivising universities to attract philanthropic funds—which helps explain, in institutional terms, why PolyU’s donation income has nearly doubled in five years.

Data note: For systemic figures such as the GRF 2025/26 round and the RMGS, see official UGC sources (as cited in 12 Miscellany · The UGC Funding System); for PolyU income shares and the funding-cut / clawback figures, see PolyU’s financial reports (as cited in the relevant sections above).

---