UCPH handles DKK 11.6 billion - so why are its finances under pressure?

Shortly before the summer break, Rector David Dreyer Lassen and University Director Søren Munk Skydsgaard stood before University of Copenhagen staff with charts, billion-kroner figures and a 100-krone banknote.

The aim was to make the university’s finances more transparent.

The initiative was inspired in part by the Faculty of Science. Following extensive cutbacks at the faculty, Dean Bo Jellesmark Thorsen introduced open meetings where staff can gain insight into the faculty’s finances.

At the meeting on 25 June at the Panum Institute, the rector and university director therefore presented the broad outlines of the University of Copenhagen’s finances and answered questions from staff.

Among the charts, one in particular stood out.

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The University of Copenhagen’s central reserves stood at DKK 530 million in 2025. According to management’s projection, they will fall to just DKK 10 million by 2028 and reach minus DKK 180 million in 2030.

The projection shows how the university’s finances could develop if it does not change course. In other words, management does not necessarily expect the finances to look like this. But the curve illustrates why management believes action is needed now.

Uniavisen spoke to Søren Munk Skydsgaard and gives you an overview of how the University of Copenhagen’s finances fit together, what is putting them under pressure, and how management plans to keep them in balance.

Behind the billions lies a paradox: the university is growing financially, while at the same time it needs to find money to cover rising costs if it is to avoid further cutbacks in the years ahead.

»Right now, the University of Copenhagen has a healthy economy that allows us to maintain the framework for the university, and thereby the framework for education and research. And we want to be able to continue doing that,« says Søren Munk Skydsgaard.

Where does the DKK 11.6 billion come from?

In 2025, the University of Copenhagen had revenues of around DKK 11.6 billion, with expenses at roughly the same level.

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Fifty-four per cent of the money came from the state in the form of funding for, among other things, research and education. Another 38 per cent came from external funding – mainly research grants – while the remaining eight per cent came from sources including forensic medicine, participant fees and the sale of services.

Staff are the university’s biggest expense. Personnel costs account for 57 per cent of expenditure, while 21 per cent goes towards buildings and their operation. Four per cent goes to IT.

The University of Copenhagen’s revenues have grown substantially over the past decade, but only because external funding has increased. In real terms, external revenues rose from around DKK 3 billion in 2015 to just over DKK 4.4 billion in 2025, while government research funding has remained relatively stable.

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That is fundamentally a positive development, Søren Munk Skydsgaard stresses, because the external funding has made it possible to expand research activities significantly.

»In that sense, we are an organisation that is growing. Financially as well. So that puts us in a good position,« he says.

But the external funding also comes at a cost.

An extra DKK 73.50 for every DKK 100

When the University of Copenhagen receives DKK 100 in external research funding, the university estimates that this generates an average of around DKK 73.50 in direct and indirect associated costs.

These may include expenses for buildings, IT, laboratories, research administration and HR.

Some of the indirect costs can be covered through what is known as overhead. This is an additional amount added to the research grant to help cover the shared costs associated with the project.

But the funder does not cover the full cost.

For a publicly funded research grant, the University of Copenhagen can receive DKK 44 in overhead for every DKK 100 awarded, Søren Munk Skydsgaard explains. For most other grants, however, the amount is considerably lower. The university itself has to cover the remaining costs up to DKK 73.50.

This means that more research funding is not in itself a solution to the financial challenges looming on the horizon.

»External research funding is absolutely crucial to our research activities. But it is important to stress that increased external funding will not solve the University of Copenhagen’s financial problems. Every time we receive new research funding, the university has to contribute co-funding,« says the university director.

He stresses that this should not be taken to mean that management wants research environments to hold back from applying for grants. But they should apply for academic reasons, not financial ones. According to Søren Munk Skydsgaard, it is also important to pay greater attention to including funding for the projects’ associated costs in grant applications.

And there is a limit to how much the University of Copenhagen can contribute itself, the university director says:

»As long as we are not getting the 73.5 øre per krone covered – and we are not – there is a limit to how much the University of Copenhagen can co-finance,« Søren Munk Skydsgaard says, continuing:

»We are quite close to that point.«

He does not put a figure on exactly where that limit lies.

Instead, he points to a new agreement between Denmark’s universities and a number of major private foundations as one of the most important solutions. Under the agreement, the foundations will cover a greater share of the associated costs than they have in the past.

Søren Munk Skydsgaard calls the agreement »really good« and says it is important in reducing the costs that would otherwise fall to the university.

»But it will only work if the research environments and the administration make sure together that it is actually used in grant applications,« he says.

The square-metre puzzle

Research, however, is only one source of the financial pressure.

The single biggest challenge is the university’s buildings.

READ ALSO: University of Copenhagen needs 75,000 m² cut to offset financing shortfall

The University of Copenhagen has around one million square metres of floor space at its disposal, and according to the university director, rent alone amounts to around DKK 1.2 billion a year. This has increased in recent years as a result of the Niels Bohr Building LINK and the new building for the Natural History Museum of Denmark. On top of that come rising investments in maintenance and renovations.

Søren Munk Skydsgaard also points to an upcoming renovation of the H.C. Ørsted Institute as a major investment.

»We have good buildings, and they are generally in good condition. So it is not as if we are facing a huge maintenance backlog,« he says, continuing:

»But in the coming years, the University of Copenhagen will have to spend more money if its buildings are to remain at the desired standard.«

At the same time, changing research activities place new and shifting demands on facilities and laboratories.

To reduce rising costs, one of the solutions is what management calls consolidation.

The University of Copenhagen needs to use fewer square metres and concentrate more activities on its existing campuses. The relocation of the Faculty of Social Sciences from the former Municipal Hospital complex to South Campus is one example of this development.

»But we need everyone to help us use our space more efficiently,« says Søren Munk Skydsgaard.

IT and security are becoming more expensive

The IT bill is also growing.

Licences are becoming more expensive, while research is using ever larger amounts of data and computing power. And that trend will only continue as AI expands.

READ ALSO: Here is UCPH’s new deputy prorector for AI

Very large research projects in particular can place significant pressure on the university’s shared IT budget, according to the university director. Until now, areas such as data storage have largely been treated as a shared expense, but that is beginning to change.

If a research project uses enormous amounts of data or computing power, this should increasingly be regarded as research infrastructure and financed through the project itself.

»These are not small amounts. We are talking about millions of kroner,« says Søren Munk Skydsgaard.

At the same time, the University of Copenhagen is spending more on security.

According to the university director, the geopolitical situation means that the university has to invest more in areas such as information security and cybersecurity. For example, the University of Copenhagen needs better control of its systems, vulnerabilities, backups and suspicious activity across its IT systems.

READ ALSO: UCPH’s new head of security must reconcile intelligence-service logic with open research

What happens if the reserves run out?

The central reserves are not the University of Copenhagen’s total cash holdings, but serve as a shared financial buffer. This is where the university initially absorbs fluctuations and rising central costs, while management tries to keep the financial framework for faculties and departments stable.

Søren Munk Skydsgaard therefore describes the reserves as a measure of how financially robust the university is.

If the central finances actually run out of money, there will inevitably be consequences for the research environments.

»If there is not enough money to pay for buildings, security, IT and the other shared costs where those expenses are allocated, we will have to reduce some funding allocations that we do not want to reduce,« says Søren Munk Skydsgaard.

Reducing those allocations would mean that faculties or departments receive less money and therefore have to find savings locally. That is the situation the University of Copenhagen’s management wants to avoid.

Four measures are intended to prevent further cutbacks

Management has grouped its plan into four broad measures.

The University of Copenhagen needs to have a larger share of the associated costs of externally funded research covered. The university needs to use less space. Management intends to be more cautious about immediately spending new revenue. And administrative costs need to be kept down.

The last of these is not new. Søren Munk Skydsgaard points to the administrative reform as one of the measures already helping to keep administrative costs down.

If we succeed with the measures we are proposing, there is a strong likelihood that we will avoid a shortfall in the central finances and thereby be able to maintain the funding levels set out in the budgets

Søren Munk Skydsgaard, University Director at UCPH

This caution also means that new funding will not necessarily be channelled directly into new activities. At the financial meeting before the summer break, Søren Munk Skydsgaard said that the University of Copenhagen has so far chosen not to allocate all of the new research funding from the new four-year political agreement.

»These funds have, so to speak, already been spent in advance on co-financing externally funded research,« says Søren Munk Skydsgaard.

Some of the money is being held back to cover rising building costs. If some of the financial risks later turn out to be less severe than feared, management says the money can be released.

The potential gains from the four measures have not been fully factored into the projection, which reaches minus DKK 180 million in 2030.

The graph should therefore not be read as management’s estimate of the most likely development, but as an illustration of what could happen if the University of Copenhagen does not change course.

That is precisely why management is taking action now, Søren Munk Skydsgaard says.

»If we succeed with the measures we are proposing, there is a strong likelihood that we will avoid a shortfall in the central finances and thereby be able to maintain the funding levels set out in the budgets,« he says, continuing:

»But the measures ahead of us are not straightforward.«

This article was translated with the assistance of artificial intelligence and subsequently reviewed by a member of the editorial staff.