Wednesday 8 June 2011
Vol cxli No 32
A Discussion was held in the Council Room. Pro-Vice-Chancellor Professor Ian White was presiding, with the Registrary, the Senior Proctor, a Pro-Proctor, and ten other persons present.
The following Reports were discussed:
Report of the Council, dated 16 May 2011, seeking authority to submit a planning application for University land at North West Cambridge (Reporter, 2010–11, p. 760)
Professor J. K. M. Sanders (Head of the School of the Physical Sciences and member of the North West Cambridge Project Board):
Mr Deputy Vice-Chancellor, from my perspective, North West Cambridge presents a great opportunity for the University to fulfil some of its key strategic goals. We wish to remain internationally competitive in research, but a major barrier frustrating that aspiration is housing, which is expensive and in short supply in the Cambridge area. This is a major concern to me, both as a Head of School who wishes to recruit world-class individuals to the academic staff, and also to me as the leader of a research group that has international post-doctoral colleagues who need somewhere attractive to live. The accommodation problem is also the main constraint on the University’s expansion in graduate student numbers; there is a separate debate to be had about the right proportions of undergraduates, taught postgraduates, and research postgraduates in the overall student population, but an increase in the number of graduate students currently features in the aspirations and the frustrated plans of most of the six Schools.
North West Cambridge offers the most promising solution to these problems. The new post-doctoral and postgraduate housing is likely to be configured at least partially in collegiate form, but exactly what that should mean in the twenty-first century is still a matter for discussion, and it is likely to evolve over the lifetime of this project. The project would also provide private sector housing and a wide range of community facilities, and together with West Cambridge, would form a long-term land bank for further academic and private sector research space. I believe that the masterplan provides an exciting vision of how Cambridge might grow over the next couple of decades through a combination of private and public mechanisms in a coherent, sustainable, and exemplary way. The Council of the School of the Physical Sciences last term gave its unanimous support to the overall aims of the project.
The project team has worked closely with the planning authorities and local community to bring the masterplan to its present state, and has achieved a remarkable degree of agreement on the way forward. This is therefore the right moment to proceed with an outline planning submission for the scheme as a whole; not to do so would be to throw away what has already been achieved. Obtaining planning permission would allow more detailed planning and feasibility studies, without committing the University to any specific project or urgent timeline: there is a ten-year window following the granting of permission before work has to start on the ground, and all future phases would need to be approved by further Graces.
There is everything to gain, and little to be lost, by proceeding with an application for outline planning permission, and I therefore commend this Report to the Regent House.
Dr D. R. de Lacey (Faculty of Divinity):
The Council wishes to create a vibrant, urban extension to the City that predominates as a University quarter but one that is also a mixed academic and residential community supported by high-quality schooling, shops, community, and leisure facilities, connected internally and with the wider city by green spaces and pedestrian and cycle routes (paragraph 4).
It’s a great goal, and I could only wish that it included recognition that half of the site is outside the City, and in my own Parish of Girton: so that when paragraph 4 continues: ‘It will also integrate with the development of West Cambridge and the adjoining areas’ some of us are a little surprised. The nwcambridge.co.uk website likewise ignores the needs and wishes of the Parish: the page ‘How You’ll Benefit’1 refers only to Cambridge residents.
However, let that pass. Of greater concern to me is that some key aspects of those ‘high-quality . . . facilities’ are not going to be provided on site, but will be the subject of a section 106 contribution to the NIAB site, which is proposed for the other side of an extraordinarily busy road. Two problems here.
The road is one, particularly so for those most likely to benefit from these facilities – that is, the young and the old; and I do find it extraordinary that so little thought has been given to coherence (to use the Report’s own word) in this important area of the planning. The development of the site will, of course, significantly increase this problem. I have a proposal to put to Regents and to the planners: in this liberated era of localism, please work with the Councils (the Parish, the County, and the City: they have all said they want it) to plan and finance an enforceable 30 mph limit along Huntingdon Road. This would at least be a start. Permeability across Madingley Road is a similar problem, but that is not in my Parish.
A second, possibly even greater, problem lies with the proposal to position facilities such as school and library across the road. My concern is not just about the County’s predilection for closing libraries down. When the University is ready, and the signs seem to be that it pretty well is, our site can be built. There is absolutely no guarantee that the NIAB site will be developed in step, or indeed be developed at all if the economic downturn continues. We could find we have a ‘vibrant, urban extension to the City’ entirely devoid of some of those ‘high-quality . . . facilities’ necessary to make it, er, vibrate. Please will Council inform us of Plan B if that were to occur?
Paragraph 4 continues: ‘The highest principles of energy and transport sustainability will be incorporated into the development so that not only will North West Cambridge support the academic and social needs of the University, it will show what can be achieved through contemporary technology . . .’.
That being so, it is a pity that the planners have apparently not availed themselves of the advice of the leading sustainable energy expert, who conveniently holds a chair in this University and has made the fruits of his labours freely available in a downloadable book1. I gather the recent overhyped press release (which a search of our press office website strangely fails to reveal now), failed to give the full story when it seemed to put all our faith in Combined Heat and Power (CHP) yet I remain underwhelmed at the current proposals. Here surely is an opportunity to use the leading-edge technology of which Cambridge is so proud, and for which it is renowned. Perhaps we should encourage relevant Departments to organize competitions for innovative sustainable solutions, or grant scholarships for research into some of the latest ideas, to make this a totally zero-carbon development. But we would have to act fast.
‘The financial implications of all relevant parts of the anticipated section 106 Agreement are being included in the project budget’ (paragraph 22). This is rather startling. I understood that the days of a developer and an officer hammering out a section 106 agreement in a smoke-filled room and in secrecy (nudge, nudge; wink, wink) were over, and not just because of the smoking ban. I should declare an interest: I am both a District Councillor for Girton and its Parish Chairman, and in neither capacity am I aware of being consulted over our section 106 needs. I do hope before the budget is finalized this omission will be corrected. It is all the more surprising given that the project team has to its credit been enthusiastic over consultation: perhaps when we next meet they could bring some section 106 ideas with them.
Report of the Council, dated 16 May 2011, on the financial position and budget of the University, recommending allocations from the Chest for 2011–12 (Reporter, 2010–11, p. 764).
Professor S. J. Young (Pro-Vice-Chancellor for Planning and Resources):
Deputy Vice-Chancellor, this will be my second Budget Report as PVC for Planning and Resources, and it marks the start of a transitional period during which the new undergraduate fee regime will be introduced, research funders will demand that we operate with lower overheads and greater strategic focus, and government funding for capital projects will be severely reduced. This environment presents many challenges but it also offers opportunities for improving our recurrent operations and our longer term strategic planning.
In my 2010 Report, I suggested that after the zero cash increase in 2010–11, the planning guidance for 2011–12 would need to cut further, and so it turned out. The guidance for the 2010 Planning Round asked for a cash cut of 2% in 2011–12 and a 1% cash increase in each subsequent year through to 2014–15. On current inflation assumptions, this will result in a 9% cut in real terms by 2014–15, and Schools and Institutions will have to work very hard to achieve this. Nevertheless, and despite this tight planning scenario, the University will still incur a cumulative deficit of £36m before returning to balance in 2015–16.
Our expectations for future government funding are now clear, and I believe that these projections are relatively robust. I also believe that running a deficit through the period provides the right balance between financial prudence and avoiding undue damage to our teaching and research.
Of course, there remain many uncertainties, especially regarding pay and inflation, and the ability of Cambridge Assessment and Cambridge University Press to continue to grow in such a challenging economic environment, but there are also some upsides in prospect. The voluntary severance scheme will yield significant savings during the planning period and other strands of work emanating from the Planning and Resource Committee’s efficiency working groups should result in better service, and reduced costs.
I will not dwell further on the details of our financial position since these are set out in the Report. However, I would like to draw attention to three specific issues.
Firstly, the current planning regime works well, but it lacks adequate incentives. The University has a Resource Allocation Model (RAM) which it maintains for information but does not use to allocate resources. A mechanistic allocation of resources based on a RAM is undesirable since it would not reflect our strategic priorities and it has the potential to deliver large funding perturbations outside of any School’s control, for example, as a result of changes to government policy. However, I believe that the RAM is a good tool for driving incentives. This year the Resource Management Committee has introduced a new ‘RAM Distribution Model’ into the Planning Round such that if a School’s RAM surplus or deficit moves outside a tolerance band, then a fraction of the excess is added or subtracted from the School’s baseline allocation. When viewed as an incentive, this encourages Schools to move above the tolerance band by increasing income or saving costs whereupon they receive an increasing proportion of their additional earnings. In its first year of operation, this mechanism has resulted in an additional £1m of recurrent funding being added to School baselines. It is hoped that Schools will ensure that these incentive funds are passed through to those who actually earn them.
Secondly, the capital planning framework and associated capital fund mentioned in the 2010 Report are now in place, and the Planning and Resources Committee are in the final stages of agreeing the details of its operation. In place of the previous ad hoc opportunistic approach, this framework will allow Council to establish a long-range capital plan which matches our academic priorities and allows us to implement critical infrastructure in a timely and cost-effective manner. Financing via the capital fund will allow us to smooth out fluctuations in external funding, including fluctuations in government Capital Infrastructure Funding and donations. It will also provide a structure for managing strategic borrowing, if and when that is thought appropriate.
Thirdly, this Report draws attention to the situation regarding funding for research. Relative to the teaching budget, the broadly cash-flat government support for research was a good outcome. Nevertheless, our research funding is under pressure and this pressure is likely to increase. Research sponsors are demanding larger, more focused projects aligned to an institutional strategy, and trend data suggests that we are losing market share to our competitors. Following the Wakeham Report, RCUK is seeking to reduce its funding of indirect costs whilst our overhead recovery is falling already as a result of a trend away from RCUK and industry funding, towards charities, EU, and UK government. And underlying all of this, our TRAC analysis indicates that on average we are receiving only 90 pence of income for every £1 we spend on research. There is no single solution to these problems but it is clear that we need closer alignment of our research to an institutional strategy; we need to improve the quality of grant applications and seek a greater return of indirect recovery; and we must reduce the costs of research, for example, by more efficient use of resources.
In conclusion, this Budget Report presents Council’s recommendations for allocations from the Chest for 2011–12 which are consistent with its plan to steer a balanced path between tightening budgets and maintaining a healthy state of operations. It also incorporates some of the first outcomes of Council’s strategy development, including the new capital planning framework, and the introduction of a RAM-based incentives mechanism.
The focus of the last few years has been on undergraduate funding but our attention must now switch to research. Preparation for the REF and the structural changes needed to regain our leading market share must now be our highest priority.
Finally, Deputy Vice-Chancellor, I would like to express my thanks once again to the many staff of the UAS who have worked hard to produce the data and projections that inform this Report.
Professor N. A. Dodgson (Computer Laboratory and Emmanuel College):
Deputy Vice-Chancellor, we need to make savings (paragraph 48), but where? Heads of Schools and Institutions have been grappling with this question for months.
I found it instructive to consider the composition of the University’s staff and students over the past ten years (the tables in Appendices 1 and 2 of the Report). Between 2002 and 2011, student numbers increased by 7% (from 16,895 to 18,047) while staff numbers increased by 19% (from 7,065 to 8,430). The increase in staff therefore cannot be fully explained by the increase in students; we have to dig deeper into the tables.
Over the past ten years, the number of academic staff posts has barely changed: from 1,514 in 2002 to 1,523 in 2011. That is an increase of nine posts, less than 1%, despite a 7% increase in students. Over the same time, the number of administrative posts (‘academic-related’) has increased by 49% (from 877 to 1,308). But that is not the whole story. Assistant staff numbers increased by 9% (2,596 to 2,836) while contract research staff blossomed by 33% (2,078 to 2,836).
So, over the last ten years there has been essentially no change in the number of permanent academic staff, a modest increase in both students and assistant staff, and a massive increase in both contract research staff and administrative staff.
In passing, note that there is a stark contrast between the employment conditions of the latter two, expanding groups. Contract researchers are largely on soft money. Once the research contract expires, their positions are made redundant. Administrators, by contrast, are largely funded from the Chest and it is more difficult to ascertain when an administrative post becomes redundant.
Also in passing, note the disparity: 1% more academics, but 7% more students to teach, and 33% more contract researchers to supervise. Does that mean that our academic staff are working 40% harder than they were ten years ago?
More importantly, there is something odd in this differential expansion of the different types of staff. The University should be driven by research and teaching, which are its core business. Over the last decade, the number of contract research posts and the number of students increased. Shouldn’t the number of academic posts have increased in proportion, as more money came in? Why is it that almost all of the increase was in administrative posts? If things had gone up in proportion, we should now have about 200 more academics than we do (1,720 rather than 1,523), we should have 300 fewer administrators (997 rather than 1,308), and we should have 100 more assistant staff (2,950 rather than 2,836).
We are being asked to make savings, and my simple analysis indicates that growth has not been the same across all categories of staff. I propose that savings should also not be the same across all categories.
If we consider the permanent staff in Appendix 1 (that is, we exclude the contract researchers), then I suggest that the Council merely has to move backwards in time to see where those savings should be made. For example, a 4% saving in permanent staff numbers would see us moving back four years to 2007, with 10% fewer administrators (1,179 rather than 1,308), 4% fewer assistant staff (2,724 rather than 2,836) and, bizarrely, 2% more academic staff (1,559 rather than 1,523). It does seem odd that Cambridge, whose core business depends critically on its academic staff, has 36 fewer academic staff today than it did four years ago, when, over the same time, the number of administrators has increased by 129.
I appreciate that this remark has a lot of numbers in it. Let me summarize without them:
Our core business is teaching and research.
Our core business is co-ordinated, directed, and done by academic staff.
The number of academic staff posts has barely changed in a decade of otherwise considerable growth.
Therefore cutting academic staff posts is both inappropriate and counter-productive.
Professor J. K. M. Sanders (Head of the School of Physical Sciences):
Deputy Vice-Chancellor, our core business is increasingly constrained by government. The previous speaker asked to go back ten years, but the UK Border Agency will not disappear, even if we wish it to, and the constraints on health and safety, or on statistical returns to government, will not go back ten years, even though this University may wish it to. The data in the previous speaker’s speech may be accurate, but they seemed rather lacking in knowledge about the context within which we are trying to work.
Professor G. R. Evans (Emeritus Professor of Medieval Theology and Intellectual History) (read by Dr D. R. de Lacey):
Mr Deputy Vice-Chancellor, there is plenty here about the effect of reductions in public funding and fee income, and some rather shameful admissions of plans blatantly to exploit such potential cash cows as remain:
In terms of income generation, by 2013–14 the introduction of premium M.Phil. fees and increases to overseas fees will generate £10m per annum more than predicted in the 2010 Budget Report.
But I can see nothing to suggest that thought is being given to the potential for soliciting and applying donations so as to help ease the pressures the University now faces in relation to both Chest and non-Chest income. These would of course have to be accepted on the appropriate understanding, and I am well aware that it is easier to get money for a building named after a benefactor than for the repairing of the metaphorical guttering which keeps student support flowing and assists with the costs of teaching.
The amount brought in by donations, and the understandings on which that funding is accepted, are surely matters on which the Regent House ought to have a say, especially in these financially precarious times. And while a Report on this is being prepared so that it may all be looked at in advance of the Annual Accounts and next year’s Allocations Report, may I flag up another set of related concerns. Beefing up funding to be used for student support and lowering of fees is an excellent plan. But the money must be ethically sourced, with no risk that there could be calls for the money to be returned for very shame. It has happened in the past. (Remember the funding for the Robert Monk Chair and the Tyco scandal which embarrassed the University after it had accepted the money?1).
When the furore broke a little while ago about LSE and Gaddafi money, I bethought myself of the time when I was a member of Council and in that capacity, of the working party which put together the draft from which emerged Cambridge’s code on the ethics of acceptance of benefactions. This became a Notice by the Council entitled ‘Ethical Guidelines on the Acceptance of Benefactions’.2
I was interested to know how these guidelines were actually being applied in Cambridge. The University’s huge outreach seeking benefactions during the centenary year did not end (or begin) with that year and it may be remembered that there was evidence of some breakdown of communications which led to that merry attempt to offer a benefactor the chance to name the University Library after himself, without the Development Office apparently knowing about this until it hit the headlines with attendant guffaws. Remember the jests about Tesco University Library?
The Executive Committee has the duty of approving the acceptance of benefactions under delegated powers from the Vice-Chancellor. Its Minutes were not online. I asked for them under the Freedom of Information Act and when I got them I could see that mostly the approvals were happening more or less on the nod. Some instances had blanked out passages where disclosure would allegedly ‘be likely to prejudice the University’s relationship with actual or potential donors’ and so on.
I asked who prepared and approved the briefings the Executive Committee received in approving the acceptance of benefactions. It seems that these are done in the Development Office by ‘staff’ and ‘under the supervision’ of the Director of Development and Alumni Relations. But there is no committee in the Development Office or anywhere else formally seeking, accepting, and ‘making’ these recommendations.
So we have a rather risky structure here, surely. The Vice-Chancellor trusts the Executive Committee, which trusts the Development Office, which trusts its ‘staff’. I have not been able to obtain details of what actually happens between benefactor and ‘staff’ in creating the briefing because ‘the process for preparing Executive Committee briefings falls outside the scope of Freedom of Information as it is not held in recorded form’.
Read the Guidelines again. How can the Executive Committee be sure it is having regard to them when the information before it is arrived at by a process it cannot inspect? Cambridge’s very own scandals may yet come to light.
Dr S. J. Cowley (Department of Applied Mathematics and Theoretical Physics):
Deputy Vice-Chancellor, I am a member of the Resource Management Committee, the Planning and Resources Committee, and the Council. As such I have followed the preparation of this Allocations Report almost from its birth. From my standpoint there has been much detailed work on the Report within both School and non-School Institutions (e.g. see paragraph 4). As such I believe that the Regent House should have confidence that the projections are the best that can be achieved at this time given the significant external uncertainties with which the University has to work (although, of course, the numbers may change next month when, or should I say if, the White Paper is eventually published).
Key numbers are the projected ‘surpluses’ for the next year and following: these are –£9.2m, –£12.7m, –£10.8m, and –£3.7m for the Chest, and –£8.8m, –£8.2m, –£7.5m, and +£0.7m overall. It is only in 2014–15 that there is an overall positive surplus, by which time the Chest will have accumulated a further deficit of £36.4m. This should be added to the, unfortunately missing, QEF (Quinquennial Equalization Fund) surplus, which in fact was a deficit of about £25m last year; hence by 2014–15 the accumulated total deficit on the Chest is projected to be over £60m.
On the slightly brighter side, once non-Chest income is included, the deficit over the next four years is ‘only’ £23.6m, but it is still a deficit, and it means that many of the posts that are currently ‘unfilled’ in Central Bodies speak, or ‘frozen’ in common parlance, will remain so at least until 2014–15 (and possibly, or more probably, longer). The bottom line is that this Report is somewhat dismal reading. If one assumed that the unstated aim of HMG was to damage the HE sector, much as the manufacturing industry was damaged in the 1980s because all we needed was [financial] services to run a successful economy, then the policy would seem to be on track.
One of the roles of the Council, on behalf of the Regent House, is to try and minimize this damage. I, and as far as I can tell, no other member of the Council, wants to charge £9,000 fees. Further, if £9,000 fees is the lesser of two evils, I, and as far as I can tell, all other members of the Council, would prefer to have an even more generous bursary scheme. However, if the University charges fees of less than £9,000, or has a more generous bursary scheme than that proposed, then there will have to be cuts elsewhere; the deficit is already too large.
In this context I would like to address a number of matters raised by Bruce Beckles in the last two weeks.
On 17 May 2011 he took issue with the projections in the Report on undergraduate UK/EU fees, funding, and student finance, since they were based on an assumption of ‘a small annual increase in student numbers’. He criticizes this stance on the basis that it is ‘hard to reconcile with the ruthless, fiscally responsible approach the Council has alleged we must adopt in these challenging times’. He also suggests that this is inconsistent with the Council’s Notice of 23 February 2011 by stating that there is ‘no mention of increased student numbers there’. However, he was and is in a position to know that the Report was based on estimated undergraduate student numbers increasing from 10,728 in 2006–07 to 11,191 in 2014–15; so the Council was not inconsistent. Second, the small increase in student numbers of 463 reflects further introduction of fourth-year courses, etc., and should be compared with the natural variation of 501 in annual Home/EU undergraduate students over the last ten years given in Appendix 2 of this Report. Third, as a charity, the Council has to be fiscally responsible and, as noted by myself and others in earlier Discussions, as charity trustees of the University, members of the Council have a duty to ensure that the charity is and will remain solvent.1 Fourth, it is possible to be fiscally responsible without being ‘ruthless’, and the Council has not been ruthless. For ruthlessness, I refer Bruce to the stance taken by some other universities who have not been willing to run an interim deficit.
He also criticizes the online consultation on the proposals for setting the undergraduate fee. I have some sympathy with his position here, in that I agree that it would have been better if members of the Council had had a copy of the online comments – or a detailed summary of those comments. However, to put a slightly different spin on this criticism, I note that of the 145 posts to that forum, over a fifth are from members of the Council.2 Some members of the Council were reading the forum, and there was input from the forum at the relevant Council meeting: I made it.
Bruce Beckles also raises the £1bn raised through the 800th Anniversary Campaign, and notes that:
the average annual amount given in ‘unrestricted donations’ for the financial years from 2006–07 to 2009–10 was £11.7 million. This is a small portion of £1bn, but a vastly significant amount where undergraduate education is concerned, if the Council is correct that ‘£1m on general income for educational purposes, on the other hand, is substantial’
Of the £1,037m raised by 31 July 2010, £555m was received by the University (and which is in some sense covered by this Report), of which £43.2m was for ‘Students’ and £25.5m was for ‘Other/Unrestricted’. Funds raised for ‘Students’ include postgraduate studentships, and the Campaign has already contributed over £30m to that aim; that money is already accounted for. Of the money spent by the Cambridge Bursary Scheme on support for Home/EU undergraduates, just under 20% was provided by gifts to the Colleges and the University; that money is already accounted for. Such money has already been used, and is being used, as intended, to compensate for the large gap in funding between the University’s income from HMG and fees, and its expenditure on undergraduate education.
However, suppose that the £25.5m raised by the University for ‘Other/Unrestricted’ had been dedicated as an endowment for student support: it would be generating about £1.25m per annum. This is a sizeable sum, but if so used the £25.5m would not have been available for other expenditure on teaching and/or research, and there would have to have been cuts elsewhere (e.g. more frozen posts). Further, since the Campaign is nearing completion, a natural question to ask is whether the University and Colleges can continue to raise funds at the current level. An uncomfortable fact is that the area in which the University and Colleges have had most difficulty in raising money is student support; donors seem to prefer buildings.
Like it or not, the bottom line at the moment is bold red, and while the University should not be ruthless, it does have to be financially responsible. My uncomfortable conclusion is that this Report, and the decisions of last term, achieve approximately the right balance.
As a footnote on staff numbers, yes HMG has required us to act as custom officers, statisticians, etc. However, that may not be the whole story. Might I whisper ‘Press Office’ or whatever it is now called.
2Although twenty-nine contributions were mine and one was from another member of the Council.