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Grants from the Colleges Fund: Notice

14 May 2001

The Council have received the following report from the Committee of Management of the Colleges Fund which under Regulation 4 for the Fund (Statutes and Ordinances, p. 887) they now publish to the University.

1. The distributions from the Colleges Fund which were made in June 2000 were the final payments under the 'old system'. Statute G, II was amended by Grace 6 of 26 May 1999 and by Order in Council dated 8 February 2000. The effect of the changes to the Statute was to increase the tax rates from 1999-2000 onwards. As indicated in the Council's Report of 19 March 2001 (p. 564) the amount to be transferred to the Fund in the financial year 2000-01 will be just under £4.8m, which includes a voluntary contribution of £1m from Trinity College.

2. The Committee have agreed to distribute a total of £4.4m in 2001. They have prepared a note setting out in outline the basis on which such distribution will be made. This is attached as an Appendix to this Notice.

3. Grants to be paid on 30 June 2001 are as follows:

Churchill 273,108
Clare Hall 83,313
Darwin 165,054
Downing 310,283
Fitzwilliam 450,098
Girton 209,603
Hughes Hall 260,045
Lucy Cavendish 271,608
Magdalene 294,632
New Hall 259,838
Newnham 106,111
Queens' 180,274
Robinson 452,481
St Catharine's 246,072
St Edmund's 212,604
Selwyn 252,613
Wolfson 372,263
Total 4,400,000

4. Grants for 2002 and subsequent years will be determined by the Committee of Management in the light of further consultation with the Colleges.


A note setting out the principles on which the Colleges' Fund Management Committee intend to make distributions from the Fund in 2001 and subsequent years

1. The regulations provide (Statutes and Ordinances, p. 886) that 'the Committee shall have discretion to make grants to Colleges from time to time according to their needs and the resources of the Fund. Grants may be either single or recurrent for such period of years as the Committee may decide.' The Fund 'shall be used to make grants to Colleges for either recurrent or non-recurrent purposes.'

2. The Committee have decided to award grants for 2001 only and to review the basis of grant in 2002.

3. The total amount available in 2001 is £4.8m, including a voluntary donation of £1m from Trinity College. Given the uncertainty as to whether any future additional contributions would be received, and concerns about future changes to graduate fees, the Committee decided to retain £0.4m and to distribute £4.4m in 2001.

4. For 2001, very approximately 10/19ths of available monies will be distributed as endowment-related grants and the remainder as grants related to the loss of publicly funded fee income. The amounts available are calculated as £2.4m and £2m respectively.

5. All Colleges are given the opportunity to apply to the Committee and consideration is given only to those Colleges which apply. The Committee did not take into account any special circumstances.

6. In accordance with the previous practice of the Committee, the estimated surplus or deficit of endowment has been calculated by reference to the financial model of a notional College, with a given number of Fellows, undergraduates and/or graduates. These numbers are used to drive a model Endowment Account, which indicates the amount of endowment income required for such notional College. The income requirement is then scaled up by reference to the actual numbers returned in College applications, and converted into a capital requirement using a 4% yield. The resulting figure is then compared with the actual College endowments, as indicated in the application forms, including written-back sinking funds. This produces an estimated surplus or deficit.

7. The endowment-related grant splits the available cash between applicant Colleges on a linear scale, calculated within the range of 'plus £15m to minus £10m' of estimated surplus or deficit. Actual payments are moderated, as the Committee agreed to limit the maximum grant to £350,000.

8. Fee-related grants take account of the actual loss of income as calculated on behalf of the Bursars' Committee Fees Sub-Committee and are also related to calculated endowment surplus/deficit. This year the Committee agreed that no College with a calculated endowment surplus of more than £25m would qualify for a fee-related grant.

9. Fee-related grants have been calculated on a scale of 1 to 3, from 100% at £25m to 300% at minus £20m, scaled-up so as to allocate the full £2m available.

10. In 2001 the Committee have taken no account of conference income. They wish to consult the Colleges about appropriate ways in which such income might be brought into account in future years.

11. As previously indicated, Colleges will be advised to credit the full grant to a special reserve from which transfers can be made either to General Capital Account or to Corporate Capital Account. The Committee will, however, for the purposes of calculating College wealth, continue to record all grants as additions to endowment (i.e., to assume that they have been credited to Corporate Capital). Colleges will also be required to provide information as to how each grant has actually been applied.

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Cambridge University Reporter, 16 May 2001
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