In 2006/07, half of the high education sector's income came from teaching and research grants and tuition fees. The research from vice-chancellors' group Universities UK found that the largest relative increase in income is from fees from international students.
The report found that "during the last five years, fees from non-EU students have come to represent a bigger share of higher institutions' income than the funding council's research grants."
Professor Geoffrey Crosswick, who led the report group said: "This year's report includes extensive financial analysis which is made available at an important period for higher education funding.
"The analysis provides evidence of the increasingly diverse income portfolio that universities are developing as part of a wider strategy to reduce its dependence on public funding."
The report highlighted wide variations between the public research grants received by different universities. It noted that within the higher education sector "almost a half of institutions receive either no research grants or less than 2 per cent of the total institutional income.
"A second group receive between 2 per cent and 14 per cent of its income from the funding council's research grants, while a small group receive a greater proportion."
It noted that around 60 institutions receive 2 per cent or less, while less than 10 receive 20 per cent of their income from research grants. The researchers also noted that the average surplus of high education institutions is still less than needed to maintain investment.
Professor Crosswick said: "Across the sector as a whole, a median surplus of 2.3 per cent was generated. This is well below the 3 per cent to 5 per cent level which is judged the minimum necessary to allow investment for sustainability."
The report found that the largest proportion of postgraduates and undergraduates taking their first degree are coming to study in the UK from China, with many also coming from the United States. The researchers noted that as in previous years, "the growth of student numbers coming from countries outside the EU has significantly outstripped the growth in enrolments of home and EU-domiciled students."
It found that in the 10 years from 1997/98 to 2006/07, the numbers of non-EU students have more than doubled. Focusing on subjects, the researchers found that enrolment in education studies has almost trebled in 10 years, from 27,339 students in 1997/98 to 87,210 in 2006/07. In the same time frame, the number of media studies students rose by 296 per cent, drama and dance students by 120 per cent and social work students by 117 per cent. In addition, the numbers of students on anatomy, physiology and pathology courses rose by 212 per cent from 5,431 to 16,930.Reuse content