Cambridge University Reporter


Report of Discussion

Tuesday, 26 October 2004. A Discussion was held in the Senate-House of the Ninth Report of the Board of Scrutiny (Reporter, 2003-04, p. 1082).

Professor J. R. SPENCER:

Mr Deputy Vice-Chancellor, as this year's Chairman of the Board of Scrutiny, I have the honour to introduce our Ninth Report.

Under the Statutes, we are required to 'scrutinize on behalf of the Regent House' the Annual Report of the Council; the abstract of the accounts of the University, and any Report of the Council proposing allocations from the Chest. Under the Ordinances, we are also required to scrutinize the Annual Report of the General Board - and in carrying out our work of scrutiny, we have the right 'to examine the policies of the University and the arrangements made for the implementation of those policies.' We are, in short, part of the official mechanism for ensuring that the University is run in a way that is effective, transparent, and accountable to the Regent House.

We consist of eight members directly elected to serve for a period of four years; plus, as ex officio members, the Proctors and Pro-Proctors - who are elected by the Regent House on the nomination of the Colleges.

In practical terms, we interpret our role to be to offer, on behalf of the Regent House, constructive criticism, in intelligible language, of the way the University is run. In this we are reactive. We are not a Her Majesty's Opposition, much less a government in exile. We do not have a rival legislative programme, and our job is to point out problems and suggest their causes, not to solve them. But the limited task that we perform is taken seriously. For our members, service on the Board of Scrutiny takes up a lot of time - almost as much time as other academic colleagues devote to service on the Council and the General Board. We intend our criticism to be constructive, even where it is sharp. I would like to take this occasion to say that we appreciate the dedication to the University that our colleagues show in serving on the central bodies, and also the dedication of the University's administrators.

If the constitution of the University of which the Board is part is to work effectively, it is necessary for the other parts of the constitution to engage with us. In the past, I regret to say that they have not always done so. In fact, we have often felt that the Board is seen, in certain quarters, as a useless irritant, to be ignored when this is possible, and put down when it is not. This is unfortunate for many reasons: not least the fact that, on various occasions, our warnings have been proved correct.

In our Eighth Report a year ago, we pointed out that the University's Assistant Staff Pension Fund appeared to be under-funded, and that the current level of staff contributions - which then stood at one per cent of pay - was 'not likely to be sustainable'. In its official response to the Report last November, the Council noted what we said about staff pensions and said that it 'regretted the alarmist tone of the Board's remarks:' a theme taken up by a Council sympathizer in the subsequent Discussion, who said our 'strong language' was 'unhelpful in rebuilding trust'. Had he read what we wrote, I wonder? I have re-read the relevant part of our Eighth Report, and can see no language that is remotely alarmist. And as to substance, our predictions were correct: as all members of the assistant staff are aware - quite literally to their cost - last summer their pension contributions were raised, at short notice, and in one single hike, from one per cent to six.

In making this painful point I am not trying to reopen past disputes, but seek to look ahead: and I am happy to say that 'ahead' is looking better. Last year, the Board had a useful meeting with representatives of the Council, in which we had a 'full and frank discussion', in the literal rather than the euphemistic sense of that hackneyed phrase. The University's administrators, as always, have been helpful and courteous. And this year, we are very pleased to see that the Council, instead of waiting months to respond as in the past, have published a Notice with its initial reaction alongside our Ninth Report.

Our Ninth Report is long, and in the rest of this introduction I shall not try to summarize it. Instead I shall just mention as headlines a few major themes.

As in past years, much of our Report is concerned with money matters.

Despite efforts to contain it, the University's budget deficit has continued to grow. This is worrying. In order to contain it, the University needs to address strategic issues and make hard decisions. The Board recognizes that serious attempts are being made to do this, and awaits further developments with interest.

In order to sort its finances out, the University must adopt 'joined-up budgeting'. This means, among other things, budgeting that consolidates Chest and non-Chest incomes and expenditures. It also means publishing a version of the University's accounts that consolidates those of Cambridge University Press and the University of Cambridge Local Examinations Syndicate with those of the rest of the University. These are matters to which the Board has called attention, year after year, in its previous Reports. It is pleased to learn from the Council's response that action is being taken.

The Board believes that the University should embark on a thorough revision of the Statutes and Ordinances. This is not because we wish to put in train a process of constitutional reform. It is because the rules by which the University's affairs are governed should be clearly set out, and available to all, which they currently are not. What is needed in this University is a Code: and a Code in the spirit of Napoleon - not Bletchley Park.

We believe that, for the Council to do its job effectively, its paperwork should be streamlined. In its reaction to this, the Council says 'The Board may not be aware that significant changes have been made to the working methods of the Council since late 2003.' In fact the Board is well aware of this, because the Proctors, who are members of the Board, attend the Council as observers. If working methods have been improved, we believe that further improvement is desirable, and possible.

Mr Deputy Vice-Chancellor, the Board extends its thanks to the Council for its comments on our Ninth Report that it published in the summer: and looks forward to hearing its further reaction later.

Mr C. LARKUM:

Deputy Vice-Chancellor, the Board of Scrutiny tells us (para 75) that it has 'the right of reporting to the University on any matters falling within the scope of its scrutiny.' It does not tell us what that scope is and, from its actions, we might conclude that it regards the second half of the sentence as redundant, believing that it has 'the right of reporting to the University on any matters'. Full stop. Indeed there are so many matters that the Board is now planning to increase the frequency of its reporting. Before it does, it would be good to determine more exactly what the agreed scope of its scrutiny is.

The Wass Report thought it understood the position very well and said so. 'We have specified the responsibilities of Scrutiny with some precision'. The Board was to 'take the lead in scrutinizing the three major items of University business … ['the Council's Annual Report, the Allocations Report, and the Accounts'] and to advise the Regent House of any issues arising from them that merited discussion or criticism.'

There has been no formal expansion of these responsibilities of any significance in the period since. Chapter VII of the Statutes repeats Wass, simply amending the Allocations Report to 'any Report of the Council proposing allocations from the Chest.' And the relevant Ordinance contains only three regulations, of which two are directly to the point. Regulation 1 reiterates the areas of responsibility, merely glossing in brackets after the Annual Report of the Council '(including the Annual Report of the General Board to the Council)'. Regulation 2 says that, in carrying out its scrutiny of the documents referred to in Regulation 1, the Board has the right 'to examine the policies of the University and the arrangements made for the implementation of those policies, and to report thereon to the Regent House.' Regulation 2 therefore elaborates on and defines Wass's phrase 'any issues arising from them', and confines its application to University policy and to the structures established for implementing policy.

We should note in passing that the Statutes seek to preclude conflicts of interest by disqualifying certain University officers and members of the bodies the Board has responsibility for scrutinizing from serving on the Board. In this the University was wiser than the Board itself, as we shall see.

Where are we heading? In the first place to the Board's lengthy comments this year on Investment Management. The Board first establishes its ground. 'The University is an Exempt Charity and is not currently regulated in respect of its investment activities. Recent proposals from the Government, if enacted, will have the effect of requiring a regulator (possibly the HEFCE) to do all it reasonably can to increase compliance by the University with charity law.' What a remarkable picture! The University is evidently such a hardened and determined offender against charity law that even HEFCE, vested with the powers of a new Charities Act, cannot be expected to bring it fully to heel.

And what lies behind this bizarre characterization? The Board thinks it has detected the University in planning to pay a higher dividend on the Amalgamated Fund units than there is income available to pay it - not in the year under review but in the year just beginning. The Board acknowledges that the offending dividend has only been 'provisionally estimated', but that is good enough for several long paragraphs of sententious comment and advice. I speak as a member of the Investments Sub-committee and can assure the Regent House that there is no prospect that the committee will recommend a dividend in excess of the income available to support it - though, if the University adopts a total return distribution policy for the Amalgamated Fund, the concept of available income will no longer be relevant, even under Charity Law.

Then the Board turns its attention to the management of the University's investments. 'It is known' it begins, much as Jane Austen began 'It is a truth universally acknowledged' - but then Miss Austen wished to give the nod that hers was a work of tongue-in-cheek fiction. Not so the Board of Scrutiny. It is sadly in earnest: 'It is known that a manager measured against any particular benchmark is likely to select an investment portfolio similar to the benchmark so as to reduce the risk of severe under-performance.' It goes on: 'If the adviser on asset allocation is also the portfolio manager, the advice on the former is therefore likely to be biased [the Board does not mince its words] unless there is provision automatically to change the benchmark according to the agreed policy changes. At present there is no such provision.'

Don't worry if you haven't followed the argument, it is quite technical. Just note that the advice will be biased if a given condition is not met, and the Board asserts that the condition - the provision to change benchmarks - is not met. So what is its conclusion? Do we change the benchmarks? No. 'We recommend that there should be a separate contract for asset allocation advice.' What a glorious leap of we-know-better-than-thou arrogance. The logical conclusion of its own argument is ignored, and the Board is into lecture mode again. And in lecture mode it continues, going on to recommend how the different parts of the portfolio should be managed.

Such intrusion surely goes beyond what Wass intended or the current Statutes allow, as regards the scope of the Board's responsibilities. Its criticism is directed not at Wass's three major items of University business, nor at policies, but at management details delegated to a sub-committee composed of individuals chosen for their expertise in the area of investment, including several investment professionals.

Does it matter in a real sense that the Board interferes in this way? Yes it does. Let's return to its first criticism: that the University was about to pay out too much by way of dividend from the Amalgamated Fund. The Board tells the recent history of the Fund's dividend, and makes clear that the dividend has been cut in the review year even before a decision about the criticized 2004-05 dividend is taken. What it doesn't say is why the dividend was cut.

Let me take you back five years to the Board's Report of 1999. The Board was then exercised that the Amalgamated Fund was paying not too much, but too little. It accused the University of squirreling away investment income in the income reserve as a 'form of surreptitious saving'. It was unimpressed by the argument that the income reserve plays an important role in smoothing the dividend year to year and in avoiding dividend cuts. It knew better. 'We realize, of course, that the abolition of Advanced [sic] Corporation Tax relief for charities will result in a reduction of income, but this is a gradual effect over seven years; it is not clear that there is any need to smooth it over an even longer period.' It recommended the Council to increase the dividend pay-out, and the Council obliged by advising the Investments Sub-committee to 'look to a slightly reduced income reserve', and authorized a special dividend of £3.7 million in 2000.

'We welcome this,' said the Board in its October 2000 Report, referring to the special dividend, 'but note that it is actually rather modest'. It then took the Council to task for muddled thinking and levelled another piece of artillery - the accounting SORP - at the Amalgamated Fund's income reserve, unimpressed that the University auditors found no incompatibility. The assault was continued in subsequent Reports until the income reserve was exhausted. This occurred well within the seven years over which the Board had looked forward in 1999 with such bland confidence, and precisely at the time in the market cycle when an income reserve was most needed to avoid a dividend cut. But the reserve had been used up in paying special dividends when they were not needed, with the result that in 2003-04 the Amalgamated Fund's dividend was cut - for the first time in its 45-year history.

Deputy Vice-Chancellor, when I was much younger the word chutzpah was defined for me as the attitude of someone who murders his father and mother and then pleads diminished responsibility as an orphan. That was amusing, but didn't translate well to the real world; and a long search began for a more telling example. No longer. First the Board harried the Amalgamated Fund to pay out more and dismantle its income reserve; now, with the reserve gone, it is apoplectic at the mere thought that the Fund might run to profligacy on its own account and pay out too much in 2004-05. That fits the bill beautifully.

Interference by the Board in fields beyond its area of responsibility can thus be damaging. There would have been no occasion for a dividend cut in the past year but for the Board's attentions. The Investments Sub-committee has long been an object of those attentions over the range of its activities, despite (or perhaps because of) the fact that for some of the time a member of the Investments Sub-committee has also been a Board member. The Statute, as we saw, expressly sought to avoid conflicts of this nature. The Board of Scrutiny, which rightly demands high standards of other University bodies, evidently sees no inconsistency in having sections of its Report drafted by a member of the body it is criticizing, nor a need to declare the conflict of interest. May we hope that the scope of the Board's scrutiny will be more strictly drawn in future to avoid such conflicts, or that the list of University bodies that may not supply members to the Board will be extended.

I have stressed the point about damage. The Board last year criticized the Investments Sub-committee for failing to achieve the same investment return as the Yale Endowment in the US. Those familiar with David Swenson's book Pioneering Portfolio Management - Swenson being Yale's Chief Investment Officer - will be aware of two criteria he maintains are essential for successful endowment investment. Managers need to think and invest unconventionally; and, since investments take time to bear fruit and it requires courage of managers to stick to their guns, managers must be shielded from gratuitous criticism, particularly from having conventional wisdom forced on them by uninvolved colleagues. I ask the Board of Scrutiny to take note.

Very, very briefly I should like to put on a different hat and comment on the Board's discussion of the handling of the increase in contributions to the Assistant Staff Pension Scheme, of whose Managing Committee I recently became chair. It says (para 35): 'The failure to address the (pension) issue in a timely way has led to undue optimism in planning and - because of the late announcement of the increase in staff contributions - has adversely affected staff relations.' The first half of that sentence I endorse. The second half is untrue and should be retracted. The Board implies that staff were unaware of the likelihood of an increase until after the triennial review was published in April 2004, and states 'the administration could have begun alerting staff to the likely shortfall in the fund twelve months earlier'. In fact, the shortfall and its consequence - that contribution rates were likely to rise in August 2004 - were drawn to members' attention as early as the annual members' meeting in June 2003, and follow-up items appeared in Members' Newsletters in August 2003 (12 months ahead of the increase) and in February 2004. The truth is that no one has yet found a good way of breaking bad news; but this does not excuse the Board of Scrutiny from making unfounded allegations - allegations that have given offence and have, so far as the Pensions Administration is concerned, 'adversely affected staff relations'.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, the Board of Scrutiny is so-called partly because it has a right to 'scrutinize' papers and documents. The Board has remarked before now that it has sometimes had to fight hard to enforce its rights of access to the records of the University's conduct of its affairs. Sometimes, it seems, there are alleged to be none. In this year's Report, the Board points out that there appears to be no way of discovering how our administrative staff have multiplied and where. Since the Pavlovian reaction to criticisms is always to blame whatever went wrong on not having enough administrators, and since senior administrators are very well paid in relation to the rest of us, this alleged unavailability of the figures is of some importance.

I begin by referring to this fundamental issue of the constitutional protection of the accountability to the University of the central bodies and their subordinate committees through the Board of Scrutiny, in indignation. A Notice has been published, setting out for us an Information Strategy for the University which we have not been allowed to discuss or agree (Reporter, 20 October, p. 48). Please will the Board put on its agenda for this year a scrutiny of our record-keeping, its links with the preservation of our historical record in paper form, the ownership of intellectual property in our records and rights of access to them under the Freedom of Information Act, and the terrifying implication in this Notice that your work-in-progress and mine is 'knowledge' to be 'managed' by the University's administrators.

The Board of Scrutiny began its career a year or two before I was on the Council, with its reputation to make. It was easy to see that it was making it if one was a Council member because the Council's feathers were ruffled, and history tells how attempts were made to suppress it or curtail its activities. A previous speaker sought to nit-pick his way back to returning the Board to its box and turning the key. I think this underlines that it has now settled into a powerful place in our constitution. The Board is now an increasingly respected voice.

Yet there is beginning to be a sense of déjà vu about the Board's Reports as last year's sensible suggestion reappears again this year, because nothing has been done. The administration squats protectively over its mistakes and omissions like a defensive toad. A case in point is the repeated request that Agendas and Minutes of the central bodies be put up on the Web. It took years to get that achieved. (May I add the suggestion that our Statutes and Ordinances, being a published CUP book, should not be restricted to the cam-only domain?) Another is the proposal that Statute K, 9 be amended to allow delegation not only to a person but also to a committee (70) which has been made more than once, and you would think the central bodies would be keen on that because it would greatly inhibit the powers of our committees to act as a brake upon the activities of senior administrative and academic officers.

The Board quite rightly begins with the bigger picture. It is more important than ever that we should move away from the 'strategy' (a courtesy-title surely?) of introducing 'reforms' separately. This is a muddled and piecemeal process, bound to have unintended consequences, resembling the hotchpotch initiatives of our current Government. Our Vice-Chancellor remarked in her inaugural address on the 'chaos of daily University life'. I fear she is not feeling so cheerful about that now, and surely we have to recognize that the very complexity of our common life requires a constant attention to consistency and connectedness?

But sometimes the suspicion forces itself upon one, resist it as one may, and reluctant as one is to entertain any sort of conspiracy theory, that between the apparent small 'progressions' is indeed a grand scheme. To feed us any such grand scheme bit by bit would indeed be a cunning method of putting over a much more integrated scheme than appears. So first I want to support the Board's call for 'wide-ranging debate' before the Regent House on the University's direction and purpose and how all the recent far-reaching changes and proposed changes relate to one another (2).

This is not an easy brief and it is not always possible for those who have not been attending in class and keeping up with events to see where things are leading. There has been recent discussion on the ucam.governance newsgroup about this problem. Apathy or bewilderment or fear of making oneself conspicuous by asking too many questions can prevent the average member of staff or student from putting an oar in, and you still sometimes hear the assertion that there is no need because 'They' have it all in hand. But can we trust them? The T-word looms, and I fear it is going to pursue our Vice-Chancellor throughout her term of office as an increasingly hollow echo, unless this request to allow 'wide-ranging debate' is met at once.

Finance. 'The Board … remains concerned that for the second consecutive year the auditors have not been able to give a 'true and fair' opinion. This is a matter of concern because it makes it impossible for us to get a clear picture of the real size of our deficit.

Then there is the unclarity about how we should disburse it. The Board's Report points to the expensiveness now of putting right the consequences of unfortunate decisions made some time ago about contributions to the Assistant Staff Pension Fund (34). That is bad enough, but worse is the fact that this was not discussed by the Finance Working Party with a resulting 'undue optimism in planning'. The Board points out (24ff.) that the RAM, designed as an instrument of transparency' is becoming an instrument of power games and control with 'unintended or perverse incentives created'.

The Oxford University Gazette of 23 September includes the Corporate Planning Statement for 2004, in which we read (5) that the University of Oxford has 'successfully implemented a new financial management system (supplied by Oracle)' which they are calling OSIRIS. Their CAMSIS, which they are calling ISIDORE, will be ready to process applications for next year's graduate intake. Will ours? Really? The same document speaks of bringing recurrent income and expenditure into balance in Oxford in 2007-08 and of 'the consolidation of a substantial fund to support capital expenditure and the decision not to draw on it as such but to use the income which it generates to support borrowing'. The Gazette of 13 October has Oxford's already-operative RAM updated for 2004-05. Where is ours?

The Board notes in various parts of its Report the incoherence of the planning designed to recruit and reward staff. The imminent departure of a high proportion of senior academic staff by normal retirement or early retirement is going to leave a gigantic hole. Read last year's lists, Reporter, p. 46, bearing it in mind that 'retirement' includes many going early, and 'resignation' just means they want to keep their USS pension running in a post elsewhere. A lot of Professors crowding the exits, aren't there? Our band of the 'middle-aged' is comparatively small, because of the national moratorium on the creation of academic posts for some decades past. 'Over 600 of our colleagues have served this place for 25 years or more', remarked the Vice-Chancellor in her speech of this October. (I understand the parties they have been invited to on the strength of this have been a bit of an eye-opener for her as those invited expressed their feelings.) That gap cannot be filled by a few special deals; and it is doubtful whether sufficient individuals could be persuaded to come here for lower than average salaries now that we are moving to employment conditions no better than the average university in terms of freedoms and collegiality, and upward mobility seems more than ever uncertain and at the mercy of line-managers. The anxieties of all categories of staff and the unions on all this were expressed at length in the Discussion of 12 October (Reporter, 20 October, p. 84).

And staff matters are, in the end, inseparable from student matters, for it is the students who feel the pinch when pay is front-loaded to buy in new research 'stars', old research 'stars' leave in disgust because they are not being offered the same rewards, and the teaching load shifts increasingly away from the University's teaching officers and onto research students and short-term-contract younger staff. The Vice-Chancellor promised 'a serious review of the supervision system' in her speech on 1 October. Does she want it ended then? Oxford can speak in its Corporate Planning Statement (14) of the 'largely favourable view formed by the QAA audit, particularly the close working relationships between all parts of the collegiate university'. Our institutional audit, completed a year earlier, criticized the novelty of many of our procedural protections for students and the fact that they were so new that staff and students alike did not appear to have heard about them. Casualization of teaching is unlikely to put that right. Nor is there much sign of improved disciplinary flexibility. The Vice-Chancellor said in her October speech that she saw it as her 'task … to help ensure that our structures support interdisciplinary research' but my own experience suggests that that fair wind is not blowing for the support of interdisciplinary teaching.

The Estates Plan of 2003, as the Board points out (53) had already 'grown beyond a sustainable size' in 2003, according to the University of Cambridge Estate Plan. Surely this document should, as the Board suggests, not for the first time (55), be made public? Then we can take a better-informed view of the plans to tack another town the size of Reading onto Cambridge in the name of an 'expansion' which it is arguable we do not need, certainly not on that scale. The Vice-Chancellor spoke in October of 'the development of new accommodation in North West Cambridge' as though it was unquestionably going ahead. Yet we are already, it is admitted in this present Report, 'overprovided' with space 'in the University as a whole' (53).

Legal advice. The panel which reviewed the RSD found the legal group well received (Reporter, 11 August 2004, p. 1051). But the panel examining the Personnel Division sees no need for in-house legal help. From time to time I and others have deprecated the annual waste of money on legal fees and suggested that we should do as Oxford does and have a team of specialist in-house lawyers. The Research Services Division now has a complement of these, but as the Board points out, it is not providing the 'access to reliable advice on legal and constitutional matters' those taking part in decision-making need. 'Such advice is not always available when it should be'. 'The Board also notes that there is often a potential conflict between the interest of getting on with management of the University and complying with legal obligations. Our big leading players tend to think they as well as the University are above the law.

In governance there are structures and there are human realities. There are offices and there are persons-in-offices. You do not bring about reform merely by creating the offices. I have commented more than once on the lack of a clear constitutional position for the new 'team' Vice-Chancellor. The Board points out (73) that Council agendas are too long. This must inevitably lead to still more cursory 'decision making' by our elected representatives. But the decisions are getting taken somewhere. Cambridge is now in danger of developing a Blairite style of sofa government in unrecorded conversations in the Vice-Chancellor's Dome Room, with no documents for the Board to scrutinize, as the Vice-Chancellor and the Registrary and the PVCs sit side by side on that sofa desperately twiddling the Rubik cube of the University in the hope that if they go on long enough they can make it all line up.

So scrutinize what you can, Board of Scrutiny. We need you more than ever in these times of defensive speeches such as the one we have just heard. What is the speaker afraid of?

Mr N. M. MACLAREN:

Deputy Vice-Chancellor, I beg the Vice-Chancellor, the Council, the General Board, and the central administration to think very hard why this Report says what it does, and to use its recommendations as a basis for action. We are all agreed that the University desperately needs both a simpler structure and better management, but it is unclear that the current approaches to change will lead to either.

We have only to look at our national governments and quangos for the past few decades to see how not to increase accountability and efficiency. Unfortunately, we seem to be making many of the same mistakes. This Report's general call for strategic planning first and implementation second should surely not fall on deaf ears, nor should its request for increased openness.

The specific points that I shall make are relatively minor details, but they may indicate how those of us at the coal face can see where the current approaches are not succeeding. It is important to note that they are mere examples, and would be best addressed by the strategic approaches this Report is recommending.

Paragraph 36 refers to the increase in academic-related and other administrative staff; I attempted to break this down a bit more, into Computer Officers in Departments, the Computing Service, and the central administration, and Administrative Officers and Officers with titles starting 'Advisory' or 'Assistant' in the central administration. My numbers are doubtless slightly wrong, but are:

COs in Departments (1999-2000: 70; 2003-04: 77; Increase: 10%). COs in Computing Service (1999-2000: 53; 2003-04: 63; Increase: 19%). COs in Administration (1999-2000: 21; 2003-04: 29; Increase: 38%). Administrative Officers, etc. (1999-2000: 90; 2003-04: 176; Increase: 96%).

38% more Computer officers may well be needed in the central administration to manage CUFS, CAMSIS, the RAM, etc., but much of the purpose of such schemes has been to transfer management to Departments, and this has increased the work-load on departmental Computer Officers. The above figures seem a little unbalanced.

And why did we double the number of administrators without a clear statement from the Council stating why this was needed, and what the new staff were going to do? Yes, we know that an increase was needed in some areas, but I cannot remember having seen an overall plan. Does this mean that the doubling was not planned but merely happened?

Paragraphs 53 to 59 refer to the strategic plans for the University's estate and geographical shape. In addition to the costs we could save by a more efficient use of space, we could save costs by less time-consuming and less political negotiation procedures. This may sound a minor matter, but Professor-weeks are expensive, especially with their overheads in other staff time, and a lot of them have to be expended on even quite minor issues.

There is also the matter of access, transport, parking, and all that they imply. Most of the blame for wasted time can be laid elsewhere but, because the University lacks a clear geographical strategy and facilities tend to be where they can find space rather than where they would best be located, it is very hard to get any improvement and so these areas remain a low-level drain on resources.

Obviously, the details of such improvements should not even be considered at the level of the Regent House, the Council, the Board of Scrutiny, or the General Board, but it is the lack of an agreed, documented strategy and appropriate delegation of responsibility that means they can be considered there or not at all. That is not how to run an efficient organization.

Paragraphs 66 to 74 refer to governance issues. Let us look at the on-going reorganization of the House of Lords to see what can happen when constitutional changes are made without agreeing the strategy first. This Report's recommendations would avoid going further down this line.

Dr S. J. COWLEY:

Deputy Vice-Chancellor, I am a member of the Board of Scrutiny. Earlier this afternoon we heard criticism of aspects of the Board's Report, and maybe the Board does have mistakes in its Report. In the same way I would hope Council admitted its mistakes, I would hope that the Board would admit to any of its mistakes. There are a couple of points I would like to make.

First, regarding the Assistant Staff Pension Scheme. We have been told that the assistant staff were warned that their contributions were going to have to be increased. In fact, they were apparently warned of the increase before the Council accused the Board of being alarmist! However, the fact remains that when the increase was actually announced to the assistant staff (as anybody who has talked to assistant staff will be aware), it was a shock to them. It is clear that the warning was not effective.

Second, I would like to point out that before the Board published its Report, a copy of the Report was sent to a number of people in the Old Schools for comments and corrections of fact. The Board was told about various things, and corrected them. Earlier, we were told that the Board exceeds its remit, but the Board is asked to comment on the Allocations Report. Paragraph 18 of the Board's Report, commenting on the Allocations Report, reads as follows 'as a matter of standard accounting treatment the Board would expect the capital dividend not to be treated as income for accounting purposes, and that therefore the projected University deficit on the Chest for 2004-05 will be higher than currently projected by some £0.6m'.

I am not an accountant but that statement was checked by an accountant. It therefore seems to me that the Board correctly spotted something in the Allocations Report connected with investments that was wrong. If, however, the Board is mistaken, then it should have been told.

Finally, I would like to comment on the matter of policy. Apparently, although the Board can examine the University's policies it cannot comment on whether or not the University should adopt a total returns policy for the Amalgamated Fund!

Dr D. R. DE LACEY:

Mr Deputy Vice-Chancellor, so the Investments Sub-Committee meekly follows the Board's every suggestion to our cost, the Bursar of Sidney tells us, and he pleads Swenson's Defence, that it should be shielded from criticism. Is it so thin-skinned?

We must be grateful that the Council shows no such dermatological problems, since we find in the Report so many excellent ideas which have been - yet again - ignored by the central bodies.

Or perhaps the Regent House would prefer the Board to continue to interpret its remit as widely as possible, and would rather its suggestions were more broadly implemented?

Dr M. R. CLARK:

Deputy Vice-Chancellor, I am currently serving as the elected President of the Cambridge Association of University Teachers, but for the sake of clarity I would like to make it clear that my remarks today are my personal comments on the Ninth Report of the Board of Scrutiny.

My opinion is that this Report has much to commend it to the Regent House and to the Council. It would appear to be a Report which, whilst critical of some aspects of our administration and governance, is constructively critical. It has appeared to me that the previous administration serving under Sir Alec Broers as Vice-Chancellor was often very dismissive, sometimes apparently hostile, to criticisms raised by the Board of Scrutiny. I hope that the administration serving under our current Vice-Chancellor does not take such a stance but instead gives some thought to the recommendations made by the Board in their Ninth Report. We should continue to keep in mind that the Board of Scrutiny was created on the recommendation of the Wass Report looking into our procedures.

I have to say that I share some of the Board's scepticism over the implementation of the RAM as a main mechanism to guiding our resolution of our financial deficit (paragraph 15 of the Report). The main problem is that it is too blunt an instrument and it does not accurately reflect consequences of changes to the balance of income and expenditure. By way of an example from my own School and Department, it would seem at first sight that we could make financial savings by increasing the allocation of space to teaching and office space, and by decreasing the amount of space allocated to specialist research use such as dedicated tissue culture facilities. Also, it would tend, even within a consideration of research dedicated space, to make some forms of research that require only limited facilities to appear more cost effective than other forms of research requiring more extensive facilities. However to use such principles to guide allocation of research space and selection of research topics, risks damaging our future standing in the RAE and also our ability to retain research active staff in areas that are also of major benefit to the quality of our teaching. In other words to make financial savings on resources dedicated to research that then has an impact in reducing our RAE ranking would obviously have a detrimental impact on our finances. I'm sure that this is not how the RAM is intended to be used, but the Council should be aware that there are signs that such false adherence to the RAM are being manifested at departmental level within the University.

Paragraph 16 of the Report refers to a need to pay academic staff more in order to protect our standing in the RAE by enhancing the recruitment and retention of excellent academic staff. However, I would sound a note of caution on this point. It would be wrong in my opinion to over-emphasize the need for salaries of academic staff, and not to take note of the strong criticisms made recently on the Discussion of the Consultative Joint Report of the Council and the General Board on a new pay and grading structure for non-clinical staff (Reporter, 20 October 1994, pp. 84-104). The point was well made by senior staff from the School of Physical Sciences: Sir Richard Friend, Professor Athene Donald, and Professor Jeremy Sanders, that we should not neglect the many assistant staff, support staff, and academic-related staff, without whom many of the academic staff would not be able to carry out their research and teaching. I was also pleased to learn from Sir Tom Blundell, the Chairman of the Council of the School of Biological Sciences, that a similar response had been made on behalf of the School directly to the Director of Personnel. It is very doubtful if we could maintain a high standing in the RAE if we only concentrated on academic salaries. Indeed I would go further and suggest that salaries for academic staff, whilst important, are not the only recruiting factor, but that academic freedoms are also of major importance. Our academic freedoms are undoubtedly being eroded, as witnessed by arguments put forward in the debates over attempts to implement changes in the University IPR policy (Report of a Discussion of the Second Joint Report of the Council and the General Board, dated 29 March 2004, on the ownership of Intellectual Property Rights (IPRs), Reporter, 26 May 2004, p. 738). It seems to me, at least in part, that much higher salaries are required as a compensation for the erosion of academic freedoms.

I agree with the Board in its recommendation regarding the management and expansion of the University estate. I have in the past been critical in Discussion of plans for buildings such as the East Forum, the plans for which seemed to create unnecessary financial risks for the University. The full cost estimates for new buildings really must take into account the cost implications for old buildings that are to be vacated, or used for alternative purposes. I think the example of Brown's Restaurant (paragraph 54) is an interesting example of how the University might recoup some income on its estate in central Cambridge without selling the freehold on that estate.

I find the arguments in favour of the establishment of an Office of General Counsel (paragraph 72) compelling. It seems to me that the Registrary does indeed have a very real conflict of interest when it comes to overseeing and defending the actions of the UAS, whilst at the same time seeking legal advice that might be contrary to the actions of the UAS. In my opinion this conflict was particularly manifest with regard to the commercial interests in IPR, following the merger of the Wolfson Industrial Liaison Office into the Research Services Division. The more recent proposals to consider de-merging Cambridge Enterprise from RSD and the UAS (Second Joint Report of the Council and the General Board on the ownership of Intellectual Property Rights (IPRs): Notice, Reporter, 20 October 2004 (p. 48), and Review of Research Services Division: Report (July 2004) Reporter, 11 August 2004 (pp. 1047-1053) would resolve some of these conflicts but I still think establishment of an Office of General Counsel should be given serious consideration.

Finally, I offer my support for proposals for a change in the scheduling of the Reports of the Board of Scrutiny to coincide with the relevant Reports of the Council and the General Board. The Board of Scrutiny is meant to be a watchdog of Regent House, and to have both the Reports of the Council and of the Board of Scrutiny to be scheduled for the same Discussion would allow for a much more informed response from members of the Regent House.

Professor A. W. F. EDWARDS:

Mr Deputy Vice-Chancellor, the Board of Scrutiny reports to the University (Statute A, VII, 2) and not to the Council. Its Reports should therefore open with the words 'The Board of Scrutiny begs leave to report to the University as follows', as they used to.

The Council have published a Notice with 'some preliminary comment on the recommendations of the Board's Report' (p. 1053). It is not correct for the Council to publish comments on a Report to the University prior to its Discussion, save as allowed in Statute A, VIII, 1, when they must be published with the Report. This means what it says, such comments being appended to the Report, not freestanding.