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Annual Reports of the Council and the General Board for 2002-03, and Financial Statements for the year ended 31 July 2003: Notice

14 June 2004

The Council have considered the remarks made at the Discussion of the Annual Reports and the Financial Statements on 27 January 2004 (Reporter, pp. 439, 446, and 447). They have invited the response of the General Board to the remarks on the Board's Annual Report. With regard to the remarks that concern their own Annual Report the Council have agreed to comment as follows:

Board of Scrutiny

1. The Council are pleased that the Board of Scrutiny acknowledge and welcome the progress that has been made towards the consolidation of the University's accounts and the preparation of a new strategic plan, the review of the relationships between the Finance Committee, the Planning and Resources Committee, and the Buildings Sub-committee, the work carried out by the Resource Allocation Model Development Group (RAMDOG), and the establishment of a team of Pro-Vice-Chancellors. Since the publication of their Annual Report, the Council have published a Consultative Report on matters relating to central administration and management which refers particularly to the future responsibilities of the Finance Committee, and the Planning and Resources Committee, and which proposes the establishment of a new Buildings Committee (Reporter, p. 537). Following consideration of the remarks made at the Discussion of the Consultative Report on 27 April, and after further consultation within the University, the Council intend to publish a further Report about consequential changes in the central administration.

2. The Board also commented on intellectual property arrangements. In November 2003, the Council, after consulting with the General Board, invited Professor W. R. Cornish, Chairman of the Research Policy Committee's Working Group on Intellectual Property Rights (IPRs), to prepare a draft Second Report on IPR which would include a draft Ordinance to govern the University's IPR policy. The draft Ordinance would take into account comments made on the Working Party's report which was discussed on 21 October 2003 (p. 123). The Council and the Board have now received the proposals and have published them in a Joint Second Report (Reporter, p. 599). The Report was discussed on 11 and 18 May and the Council and the Board are currently considering the remarks made.

Pay and personnel issues

3. Many of the remarks referred to pay and personnel issues. Dr M. R. Clark, who spoke in his capacity as President of the Cambridge Association of University Teachers, commented on the proposed pay settlement. In response to his remarks about salaries in the University, the Council point out that Cambridge is no different to other higher education institutions in its experience of erosion of pay. Dr Clark was not explicit when he stated that the 'conditions of staff' have also been eroded. In fact the Council consider that terms and conditions in relation to the employment of staff have undergone improvement.

4. Dr Clark suggested that, if Cambridge does introduce a pay restructuring based on the national negotiations, many staff will be worse off financially than they are under our present pay scales. He referred to the proposed pay spine having more increments with each increment being smaller than the current percentages. Projections of likely career earning depend on assumptions about the details of how pay structures will be applied at each university and about the starting pay and promotion and progression with prospects for individuals. According to UCEA, the AUT's calculations are based on generally pessimistic assumptions which would not apply to the vast majority of staff. The central bodies have not yet agreed on any detailed local application of the framework agreement. Hence much of the detailed comment in his remarks is speculative and has no basis in fact. The proposed national single pay spine has 51 steps, equally spaced with a 3% increment, with the lowest step at £10,250 and the highest at £44,935 (at 1 August 2003 pay award levels). The University is currently using four different pay spines for non-clinical staff up to the professorial minimum. The average incremental step on the stipend scale from step 6 to 31 is 3.73%, with the largest being 6.15% and the smallest 1.09%. For assistant staff, the average incremental step is 3.00%, with the largest 6.15% and the smallest 2.46%. One of the key aims in bringing about changes to pay and grading structures is to support equal pay for work of equal value, underpinned by a common grading structure using a common pay spine. There are thirty-five main grades currently associated with the stipend scale of which some cover only one step and others up to fifteen. Access to any incremental step is therefore denied to some but not to others.

5. Dr N. J. Holmes referred particularly to the national Research Associate 1A scale. The points he has raised will be taken note of in any detailed proposals for new pay structures for Research Associates in Cambridge.

6. With regard to contract research staff, Dr Clark alleged that such staff have been told that they were not being put forward for consideration for promotion as a cost-saving measure for the University. In fact a prerequisite for promotion for contract research staff is that sufficient external funding is available to meet the cost of the promotion. No cost falls on central funds and the University, by denying promotion, does not save money.

7. Some speakers referred to a breakage of the link between academic and academic-related grades. Academic and academic-related staff in Cambridge already have different terms and conditions of employment. However, the introduction of a common grading methodology in Cambridge will involve some commonality of structure between the two groups. The Council and the General Board will consider carefully the needs of all the University's staff and any relevant constraints before making detailed proposals for a new grading structure and there would be wide consultation on any proposals. There is no thought that academic-related staff are less important than academic staff. If the University is to maintain the pre-eminence of its standing, it will continue to depend on effective contribution of all its staff, as was made clear in the Vice-Chancellor's speech of 1 October 2003 (Reporter, p. 40). Both recruitment and retention are important.

8. Dr D. A. Galletly was incorrect when she linked the arrangements for appraisal with assessment. The University's appraisal system does not involve assessment for the purpose of promotion, or indeed job grading. Such an assessment will be carried out in a separate exercise.

9. Mr M. N. Maclaren referred to pay structures for Computer Officers. The central bodies have addressed some aspects of this issue by interim restructuring of scales for Computer Officers to aid recruitment and retention (see the Joint Report of the Council and the General Board on adjustments to the scales of stipends and pay structure for Computer Officers, Reporter, 2001-02, p. 646). The terms of reference and conditions of employment of Computer Officers, along with all other staff, will be looked at further in the context of future implementation in Cambridge of the framework agreement.

10. Since the Discussion of their Annual Report the Council have published a Notice proposing pay increments for 2003-04 (Reporter, p. 490). In the Notice the Council stated that they intended soon to publish a Joint Consultative Report with the General Board outlining proposals for the adoption of a common grading methodology and new pay structures. Once the Report has been considered by the Regent House and wider consultation in the University has been undertaken, detailed proposals will be brought forward in a second Report. The framework agreement for the modernization of pay structures set out by the Universities and Colleges Employers Association (UCEA) lays out a model pay structure which is clearly intended to be illustrative. Higher education institutions are free to bring in 'variants or alternatives'. The proposals brought forward by the Council will be appropriate for Cambridge.

Tuition fees

11. Professor G. R. Evans referred to tuition fees. No change in Composition fees can be made without the approval of the Regent House. The Council are committed to submitting a Report to the University recommending any increase in Composition fees for 2006-07 to take advantage of the new fee arrangements as soon as the parliamentary process permits. They will publish Notices from time to time to keep members of the University informed of developments (see their last Notice, Reporter, p. 426).

Appointment of Pro-Vice-Chancellors

12. Professor Evans also commented on the openness of the process for the appointment of the new Pro-Vice-Chancellors. The Council published a Notice setting out the proposed portfolios for the new Pro-Vice-Chancellors and encouraging members of the University to express interest or to put forward names to the Nominating Committee (Reporter, p. 114).

Commissary and Office of the Independent Adjudicator

13. In reply to Professor Evans's remarks about the Commissary, the Council wish to confirm that they expect the Commissary to send them a summary of his decisions on the three applications for review made to him, for publication in the Reporter. The new Office of the Independent Adjudicator provides an independent scheme for the review of student complaints. Currently the scheme is voluntary. Discussions are in progress between the central bodies and the Colleges to consider the effect this Office will have on the University and the Colleges.

Management information

14. Professor Evans is incorrect in asserting that the University's financial difficulties are the result of CAPSA, an over-ambitious building programme, and the new promotion arrangements. The Council have previously said that the Financial System, which has resulted from the CAPSA project, is producing reliable management information in addition to effective transaction processing. That management information is essential if the Finance Committee and budget holders are fully to understand and control the University's finances. Financial modelling, undertaken in the Planning and Resource Allocation Office, suggests that the University's current deficit has a number of causes. The modelling suggests that teaching within the University is presently under-funded by approximately £24m a year.

Annual Report of the General Board

The General Board have commented on the remarks that concern their Report as follows:

15. Professor Evans criticized the lack of a reference to two of the recommendations made in the Report of the QAA's Institutional Audit. The first concerned the extent to which there is a general awareness of the new aspects of the Board's quality assurance procedures. The Board point out that these were summarized in their Annual Report for 2001-02 and described in detail in the Self-Evaluation Document published on 3 March 2003 (Reporter, 2002-03, p. 638). They wish to make clear that the principal new feature of their procedures involves the collection, for the Board's benefit, of information about quality assurance arrangements at Faculty and departmental level. The second recommendation, which Professor Evans described inaccurately, proposed that the Board review the information needed to assure themselves about the quality and standards of courses offered in conjunction with bodies outside the University. The Board have already indicated that they are addressing this and the other recommendations made in the Audit Report (Reporter, 2003-04, p. 92), and that they will be reporting further to the University.

16. Professor Evans referred to a recent staff satisfaction survey that was distributed to academic staff in the first instance. The Equality Audit which reported in 2001 argued for best practice in employment to underpin the development of equality and diversity in the University. The survey is just one aspect of this broadly defined approach and is informing the on-going agenda for equality and diversity in the University. Professor Evans also referred to proposals to consider changes in the structure of the University's pay scales in order, amongst other things, to meet equal pay considerations. Equal pay consideration is based on the principles of fairness and transparency and is informed, for example by quantitative pay data.

17. Dr M. R. Clark referred to the Human Resources Strategy and stated that the Cambridge Association of University Teachers was not consulted over its contents. The Board note that comments on the strategy were invited from all members of staff and that the Association could have submitted comments had it wished to do so.

Financial Statements for the year ended 31 July 2003

18. In their remarks on the Financial Statements for the year ended 31 July 2003, both the Chairman of the Board of Scrutiny and Professor Evans commented on the sum paid as compensation to senior officers on vacating their posts. The Council took action in this matter that they believed would be in the interests of the University.

19. The Chairman of the Board of Scrutiny and Professor Evans also commented on the fact that the external auditors stated that the accounting policies adopted by the Council do not permit the financial statements to comply with applicable United Kingdom accounting standards as they do not include the accounts of entities such as the Local Examinations Syndicate and the University Press, and do not include works of art. The Council have agreed that the consolidated financial statements for 2003-04 will include the accounts of the Local Examinations Syndicate. They have authorized discussions with the Press about the possibility, in due course, of amending the University Statutes to permit inclusion of the accounts of the Press in the consolidated financial statements. Discussions are also underway about the inclusion of the accounts of certain trusts that support the activities of the University by providing, for example, scholarships.

The Council are submitting a Grace to the Regent House (Grace 7, p. 855) for the approval of their Annual Report.


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Cambridge University Reporter 16 June 2004
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