Reporter 18/2/04: Joint Report of the Council and the General Board on resource allocation: introduction of a Cambridge Resource Allocation Model: Notice

Joint Report of the Council and the General Board on resource allocation: introduction of a Cambridge Resource Allocation Model: Notice

16 February 2004

The Council and the General Board have considered the remarks made at the Discussion held on 2 December 2003 (Reporter, p. 290) on their Joint Report dated 17 and 11 November 2003 (p. 182), and respond as follows:

1. Several speakers suggested that the implementation of the model would lead to the loss of posts and potential redundancies. The Council and the Board wish to emphasize that any loss of posts will result from the University's overall financial position and not from implementation of the Resource Allocation Model (RAM). The RAM merely provides information which is used in making academic and financial decisions. Reference was also made to the importance of academic planning and the identification of academic priorities. The Council and the Board agree, but are convinced that plans should be prepared within an agreed financial framework, which will be informed by the RAM.

2. Dr D. M. Thompson noted the vulnerable position of small Faculties and Departments, and Professors R. J. Bowring and G. R. Evans referred to cross-Faculty teaching. These points are accepted and it is for these reasons that the RAM is designed to operate at School, rather than Faculty or Departmental level. Professors Bowring and Evans also noted that the model takes no account of 'inter-School' activities. It would be possible to adjust attributions of student numbers and space (and other costs/drivers) to account for such activity and this could be attempted if the Councils of the Schools consider it a priority.

3. With respect to endowed posts, Dr Thompson is correct that the funding of such posts is not included as part of 'chest allocation' in the model. There is therefore no 'penalty' for having raised endowment funds and every incentive to continue doing so, in particular to cover the cost of posts currently supported from the Chest. It should be noted, however, that since staff expenditure and space are cost-drivers in the model, the appointment of additional staff from endowed funds (or from any source of funds) results in the attribution of additional costs in the RAM which must be offset by savings or by additional income from, for example, HEFCE 'R' funds. Dr Thompson requested clarification as to whether the RAM applies to all income received by the University from whatever source, or only or primarily to HEFCE income. The Council confirm that income attributed through the RAM is the income accruing to the Chest: mainly the HEFCE and TTA funding, composition fees, and other operating and unrestricted endowment income. It currently includes the proportion of the overheads generated on research grants and contracts which is credited to the Chest for the support of central costs.

4. Dr Thompson also sought reassurance that the University Library should be recognized as a resource for the University as a whole. As Professor M. Schofield noted, the RAM supports the University Library, the museums, and the Botanic Garden with funds top-sliced from general income in recognition of the special position of these institutions, both within the University and as a national resource. However, the model also funds these institutions, in part, by contributions from those Schools whose teaching and research benefit from the services provided. The relative proportions of 'top slice' and 'school funding' must be kept under review, but the Council and the Board are satisfied that the principle is correct.

5. Professor Bowring asserts that the 'University has expanded the Clinical School at the expense of its other operations'. The Council and the Board disagree with this assessment. Much of the expansion of the Clinical School has been funded by benefactions and other external funds raised by the School. The expansion of the School has attracted HEFCE 'T' and 'R' income well in excess of the additional expenditure not covered by these funds and the excess HEFCE income has been used to expand and subsidize activity elsewhere in the University.

6. Dr S. J. Cowley suggests alternative approaches to the attribution of income 'earned' by undergraduate teaching. He proposes that composition fees and HEFCE 'T' income should be combined before being attributed on a weighted basis and notes that this would remove the incentive to substitute overseas students for UK/EU students and would render the model less sensitive to change in fee income. Dr Cowley also raises issues relating to research grant overheads. The Council and the Board agree that the RAM Development Group and its successor should review the attribution of funds for undergraduate teaching and the attribution of research grant overheads in the light of Dr Cowley's remarks, but that implementation of any resulting changes should be delayed until 2005-06.

7. Professors M. Kelly and I. M. Leslie emphasized the challenge faced by Schools and other institutions in preparing their plans and Dr A. W. A. Peterson highlighted the dangers of unintended consequences of RAM implementation. The Council and the Board agree and note Professor A. C. Minson's recommendation that the RAM should be kept under permanent review. It is crucial that implementation of the RAM should not result in perverse academic outcomes. The plans proposed by the Schools will, therefore, require careful perusal by the General Board and their committees. The Council and the Board emphasize that, although an agreed financial framework within which planning can take place is welcome, it does not replace the annual Allocations Report which remains the responsibility of the Council and the recommendations of which must be approved by the Regent House by Grace.

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