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REPORT

Report of the Council on the introduction of an equity share scheme

The COUNCIL beg leave to report to the University as follows:

1. The costs of housing in Cambridge have been well publicized and are a major difficulty in recruiting staff in all categories to the employment of the University. The University provides some limited assistance with accommodation and is expanding the amount of accommodation that will be available to staff in the development of West Cambridge. Proposals for increasing the financial assistance available to staff in respect of removal expenses will also be coming forward shortly from the Personnel Committee.

2. Although the problem of affordable housing concerns all groups of staff, a particular difficulty exists in relation to a small number of key individuals, particularly those who relocate from overseas where house prices are often significantly lower than those found in Cambridge. On several occasions individuals that the University has wanted to appoint and who would otherwise have joined the University have not come to Cambridge because they could not find accommodation suitable to their requirements. Other universities have also experienced similar problems and have sought ways to alleviate them. The University of Oxford, for example, already has a limited shared equity scheme in place. Several of the Cambridge Colleges have also introduced equity share schemes for their Fellows.

3. It is proposed that the University should offer such a scheme in a very limited number of cases where applicants for academic and related appointments encounter difficulty in purchasing property in the Cambridge area on first appointment to the University. Under the scheme the University would make a contribution toward the capital cost of purchasing a property within 20 miles of Great St Mary's Church and would hold a share of the equity in proportion to its capital contribution. This contribution would be limited to not more than 50% of the purchase price and would be subject to a maximum sum of not more than £150,000 in any particular case (this figure to be adjusted in line with market conditions by the Council from time to time). In addition the University's contribution would also be limited so that the aggregate of the annual interest owed to the University and the total annual cost of any borrowings to finance the purchase does not exceed 33% of the applicant's gross family income. The application of the scheme in particular cases would be agreed by a committee, chaired by the Vice-Chancellor and comprising the Chairman of the Professorial Supplementary Payments Committee, and the Academic Secretary or Registrary, according to whether a case arises in an institution under the supervision of the General Board or the Council.

4. The introduction of such a scheme into the University was included in the 'emerging' HR Strategy approved by Council and the General Board for submission to the HEFCE in 2001 in order to obtain additional funding for rewarding and developing staff. The strategy envisaged that only a small number of arrangements would be in place at any one time and made provision to meet the cost involved in the loss of interest on the capital tied up in property that would otherwise have been earned from other forms of investment. The costing used in the strategy assumed that there would be a loss of interest of the order of 2-3%, with no account being taken of any difference in capital growth rates. The provision made in the HR Strategy for this loss (£40,000 in 2001-02) would allow between ten and twenty cases to be in place at any one time depending on the amount of capital required within the overall limit of £150,000 per case that is currently proposed. The amount of capital available for this purpose may also vary from time to time and act as a further constraint on the number of cases.

5. Investment in local residential property is not something that would normally be considered as an appropriate investment by the University. However, the Council are of the opinion that there is a need to introduce such arrangements in order to overcome problems of recruitment. Assuming the scheme is successful, the Council would intend investigating the scope for extending the scheme more widely throughout the University.

6. The Council believe that such arrangements will be of general interest within the University and are therefore submitting this Report for discussion on 12 February 2002.


4 February 2002 ALEC N. BROERS, Vice-Chancellor I. M. LESLIE G. A. REID
  P. AKHTAR D. W. MACDONALD JEREMY SANDERS
  A. J. BADGER M. D. MACLEOD M. SCHOFIELD
  JOHN BOYD JAMES MATHESON L. TAUB
  PETER GODDARD Z. NORGATE R. E. THORNTON
  D. A. GOOD  


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Cambridge University Reporter, 6 February 2002
Copyright © 2001 The Chancellor, Masters and Scholars of the University of Cambridge.