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Report of the Council on the financial position of the Chest, recommending allocations for 2007-08: Notice

16 July 2007

The Council has considered the remarks made at the Discussion of this Report on 12 June 2007 (Reporter, p. 808). It endorses the remarks made by the Pro-Vice-Chancellor for Planning and Resources, and draws attention to his comments on the effect of the delays in funding from the Research Councils to cover indirect costs (full Economic Costing). In paragraph 42 of the Allocations Report the Council noted the uncertainty in the future additional income associated with research and indeed most recent analyses give no grounds for complacency.

Dr D. R. de Lacey commented on the Quinquennial Equalization Fund (QEF). The Council notes and endorses the response by Dr S. J. Cowley who is a member of the Council and of the Resource Management Committee. The Council believes that it is indeed strongly in the interest of the University for strategic reserves, such as the QEF, to be built up, as the Chest moves back into surplus. Although the Report proposes a small deficit on the Chest in 2007-08, the University's overall financial position is sound and overall reserves are projected to increase.

The Council notes Professor G. R. Evans's comments about the costs, both financial and in terms of staff resources, to the University, of recent initiatives from HEFCE. The expected increase in staff pay as a result of the recent pay and grading exercise has been included in recent estimates of expenditure. Although the full costs eventually arising from the harmonization of conditions of service are at present difficult to quantify with accuracy, the Council believes that the benefits to staff will be of lasting value. The exercise was not a HEFCE initiative although the University has received HEFCE funding, which will in part cover the costs initially, through the Rewarding and Developing Staff funding stream.

Dr de Lacey and Professor Evans both referred to the increase in numbers of academic-related staff, as did the Pro-Vice-Chancellor. The Planning and Resources Committee have requested an analysis of all staff categories and expect more detailed information about the various categories of staff to be published in the Allocations Report for 2008-09. The Council will consider this analysis and any implications for the composition of the Regent House as foreseen by Dr de Lacey once it has considered the responses to the present consultation on governance (see Reporter, p. 594).

In their comments on the 800th Campaign Dr de Lacey and Professor Evans implied that the Campaign was not raising the expected sums and that the Campaign had the potential to distort the University's activities. With regard to the latter point the Council notes that all gifts are made for purposes agreed with the relevant University institution. Moreover the Council notes that over half the planned total has already been raised and philanthropic giving to collegiate Cambridge continues to increase. The first of an annual series of reports about the 800th Campaign is available at http://www.foundation.cam.ac.uk/uploads/File/800%20Report.pdf. Of the £286m received by the University under the umbrella of the Campaign for the period covered by this report, 44% has been added to the Cambridge Endowment Fund. In 2005 and 2006 the proportion of endowment funding rose to 50%, even without the beneficial impact of the Herchel Smith legacy (the majority of which was received in 2002 and 2003). Dr de Lacey has drawn attention to the objective of raising unrestricted or substitutional gifts. In 2005-06 the Development Office released just over £1m of unrestricted funds to the University. In addition since July 2005, gifts and pledges of over £16m have been received to support existing Chest-funded posts, either on a fully endowed or term basis. Whilst raising unrestricted and substitution funding will remain challenging, the Campaign is having some success in this regard.

The recommendations of the Report are for the approval of the allocations from the Chest for the coming financial year. The Council is accordingly submitting a Grace to the Regent House (Grace 1, p. 888) for the approval of the recommendations in the Report.

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Cambridge University Reporter 18 July 2007
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