Reporter 14/5/03: Seventh Report of the Board of Scrutiny: Notice

Seventh Report of the Board of Scrutiny: Notice

12 May 2003

The Council have considered the recommendations contained in the Seventh Report of the Board of Scrutiny (Reporter, 2001-02, p. 1306) and the remarks made at the Discussion of the Report on 29 October 2002 (Reporter, 2002-03, p. 273). They have consulted the General Board, the Finance Committee, and the Planning and Resources Committee, and have agreed to comment on the recommendations in the Board's Seventh Report as follows:

Recommendations

I. The Board recommends

(i) a root and branch review of costs and sources of funding, taking into account all of the University's resources, identifying Trust and Special Funds that can be used to support Chest activities, and reallocating unspent reserves where possible;

(ii) proper forecasts and budgets, based on that review, and prepared inter alia in the form of the principal statements of the statutory accounts; and

(iii) that the results of this exercise are published by the end of the first half of the University's financial year, that is 31 January 2003.

The Council note that the Finance Working Party of the Planning and Resources Committee have carried out a review of costs and sources of funding. The Working Party's report was made available online to the University on 12 March (http://www.admin.cam.ac.uk/cam-only/committee/prc/report/), and a summary of the report was published in the Reporter on the same date (p. 697). The report includes consideration of improved use of trust and special funds, and of unspent reserves.

A full financial model of the University, allowing projections for up to 15 years, is being developed and is expected to be completed by October 2003. It will allow options to be explored and give a view of the impact of decisions on the academic, financial, and physical shape of the University.

The distinction between Chest (general income distributed centrally) and non-Chest funds remains important. It is particularly important to understand the extent to which non-Chest expenditure can necessitate infrastructure costs funded from the Chest. Co-ordinated budgeting and planning for both Chest and non-Chest activities, which will need to originate at the level of Departments and Faculties, is essential but is not yet fully effective. The University Financial System (CUFS) provides much useful information to assist the exercise, but there are still too few suitably skilled staff available to assist Departments and Faculties. The Council and the General Board have agreed that each School should be assigned an officer to assist with financial matters.

II. The Board recommends that when putting a Report on major building projects before the Regent House, the Council includes

(i) the balance on the relevant University fund after giving effect to the allocated amount,

(ii) a statement as to whether the donations have been received, and if not, whether they are legally committed, and

(iii) a statement on the consequences on cash flow of any deferred external funding.

The Council recognize the need to keep the Regent House better informed at an earlier stage. Improved arrangements for reporting on University building projects are being introduced, particularly as a result of the implementation of the Planning and Resources Committee's new Capital Project Procedure. The Council expect that they would normally deal with the statutory requirement for the approval of new buildings in two stages. The first stage would propose approval in principle and the second, giving details of funding, design, etc., would seek final approval to go ahead. In their response to remarks made on the construction of new cancer research laboratories at the Addenbrooke's Hospital Site (Reporter, p. 342), for example, the Council informed the Regent House that they had agreed in future to publish a Notice announcing proposed building work before the first-stage contract had been signed, to be followed by a detailed Report for Discussion when full financial information is available. The Council would expect this information to include, where possible, the financial details recommended by the Board.

III. The Board recommends that

(i) the Council publishes a detailed Report on its Estates Strategy, including: an assessment of the financial implications of its Building Programme; its policy on, and plans for the maintenance of existing and future buildings including information on actual and target spend on maintenance expressed in terms of £ per square metre; and its compliance with the Estates Management requirements of the Financial Memorandum,

(ii) the Council allocates specific amounts against a fully costed plan for compliance with Health and Safety and Disability and Environmental legislation as it affects buildings and equipment,

(iii) the Council considers the remits, the membership, the resourcing, and the interrelationship of their committees, and their sub-committees, the Planning and Resources Committee, the Resource Management Committee, and the Finance Committee to ensure that decisions are taken at the right level by the right people on the basis of full information; and publishes the results of their deliberations by the end of the Michaelmas Term 2002, and

(iv) rather than projects being presented piecemeal, the Capital Programme is presented as a whole with supporting analyses, so that there is an opportunity to assess projects against a strategic plan rather than to prioritize projects on the basis of first-come, first-served.

With regard to the first point, the central bodies, advised by the Planning and Resources Committee (PRC), will shortly be considering a revised version of the Estate Plan, which was referred to the HEFCE in 1995. The plan will cover the points raised by the Board of Scrutiny. The final version of the Estate Plan will be made widely available.

With regard to the second point, the Estate Management and Building Service prepares regular reports for the Buildings Sub-committee and the Finance Committee about the financial implications of statutory compliance. These costs are taken into account in the preparation of the Allocations Report, a budgetary report of the Chest.

With regard to the third point, the role of the Finance Committee and, correspondingly, that of the PRC are being reviewed. Recommendations from the Finance Committee were presented to the Council at their meeting of 17 March 2003. The Council have asked the PRC for their comments on the recommendations before considering them further.

With regard to the fourth point, the Council note that the PRC introduced a Capital Projects Process in October 2002, which requires that strategic context be demonstrated with sufficient detail to enable informed decisions. The Finance Working Party in their report noted that this new Process, which has been circulated to the Councils of the Schools, should help to ensure that plans for new buildings do not progress without sufficient funding for the capital and recurrent costs.

Projects in early stages of consideration or development are often uncertain in viability. There can also be sensitivity with regard, for example, to potential benefactors and planning considerations, and there can be other commercial sensitivities that require that projects are only brought into the public domain once they are more certain. Nevertheless, the Council have directed the PRC to consider the University's capital commitments in a more strategic manner.

IV. For the above reasons, the Board is now of the opinion that before the University attempts to move to produce a RAM, there should be an open discussion about all aspects of funding, especially the difficulties facing small Departments and subjects with low HEFCE ratings. An open acceptance of the probable need to support such Departments and subjects disproportionately from discretionary income seems to be a necessary prerequisite before a transparent RAM with a proper understanding of costs can be decided.

The proposals for a Resource Allocation Model have been the subject of consultation with Schools. The further development of the RAM was a central priority recommended by the Finance Working Party, which proposed that the RAM be urgently developed by a new RAM Development Group reporting to the PRC (see Reporter, p 697). That recommendation has been accepted by the Council and the General Board. The PRC at their meeting on 20 February 2003 constituted the RAM Development Group as follows: Chair (at present): Professor Malcolm Grant, Pro-Vice-Chancellor; the Chairs of the six Councils of Schools; one representative of 'non-School' activity (currently the University Librarian); one representative of the Colleges (currently the Master of Darwin College); the Treasurer; up to two members co-opted by the Group (currently Mrs Anne Lonsdale, Pro-Vice-Chancellor). The Group has been instructed by the Council to consult widely. The Development Group, which is supported by six sub-groups addressing various aspects of the RAM and its implementation, is now at work.

The Finance Working Party also proposed that the RAM as developed should inform the forthcoming budgetary round for 2003-04 and for the output of the model to be used in defining the allocations from 2004-05.

The Council expect to publish a full statement about the RAM drawing on the Development Group's work later in the academical year.

V. The Council should clarify as soon as possible the question of to whom CMI reports. The University should make a decision about CMI's future after 2005 so that there can be sensible discussions about the future allocation of resources to CMI programmes.

The Council and the General Board have clarified CMI's reporting procedure to both bodies. CMI is a company limited by guarantee, of which the two universities, Cambridge and MIT, are the members. Formal legal accountability and reporting is therefore from the Directors of the company to these members through consideration of the annual report and accounts.

Consultation and reporting beyond this is, however, required in order that the responsibilities of the University, in relation to the effective functioning of CMI programmes, can be fulfilled and in order that the University can satisfy itself that the obligations which it has assumed with the UK Government (and to MIT) can be fulfilled. It has therefore been agreed that the Cambridge Executive Director will report on progress quarterly to the Council. The General Board will undertake an initial consideration of these quarterly reports. Particular issues will be referred to the Board's Education and Research Policy Committees, or to other bodies as appropriate, and will then be reported by the Board to the Council. In reporting to the Council, the Board will consult the Cambridge Executive Director of CMI, where appropriate, on issues arising from the monitoring process.

In addition to the quarterly monitoring, the annual report and accounts of CMI will normally be referred to both the Finance Committee and the General Board for consideration, and thence to the Council.

The conclusions following quarterly monitoring, or consideration of the annual report and accounts, will be taken forward by the Council, through guidance to the Cambridge Directors of the Board of CMI, who include the Vice-Chancellor, or to the Executive Directors of the Institute.

VI. The Board recommends that the proposed amendment to Statute D, III, 3 should be withdrawn. The Board also recommends that the Council consider introducing an amendment to the Statutes to allow for delegation to a person.

The amendment to Statute D, III, 3 proposed by the Council was rejected by the Regent House. The Council have taken note of the comments made at the Discussion on governance requested by the Board of Scrutiny, held on 11 March 2003. They are considering how to proceed with respect to the duties and role of the Vice-Chancellor and also with respect to other aspects of governance and will report further to the Regent House in due course. The Council have asked officers to review the statutory provision for delegation in the light of current circumstances.

VII. The Board considers that as a matter of urgency steps should be taken to ensure that the key committees receive the level of support they need from the Unified Administrative Service in order that these committees can function efficiently.

The Council note the Board's comments. Reorganization and recent appointments at a senior level within the Unified Administrative Service (UAS) are expected to improve the servicing of the key committees. As part of the implementation of the recommendations of Professors Shattock and Finkelstein the Council received from the Registrary a three-year development plan for the UAS which is in the process of implementation.

VIII. The Board urge the Council to regularize the roles of the Treasurer and Secretary General expediently.

Since the publication of the Board's Report the Council have submitted a Report to the Regent House containing proposals concerning the Principal Administrative Officers. These proposals were rejected in a ballot during the Michaelmas Term. The Council have the position under consideration and expect to report further to the Regent House in due course.

IX. Strategic plans and service standards should be drawn up for each of the new Divisions that, inter alia, demonstrate that the new administrative structure and continuing expansion of the UAS is cost-effective. The Board also believes that there should be regular reviews of the structure of the UAS in order to ensure that the reforms are working.

The Ordinance for the Unified Administrative Service (approved by Grace 1 of 20 June 2001 as amended, Statutes and Ordinances, p. 674) lays upon the Registrary the duty to ensure that arrangements for the quality assurance of the services provided by the Service are presented to the Council. The Council had previously, on the recommendation of the Registrary, approved arrangements for a regular series of reviews under the supervision of a committee of the Council. Those arrangements have not been fully implemented following the CAPSA implementation review and changes to the structure of the Service. The Council have been advised by the Registrary that he would now wish to present revised proposals which take account inter alia of recent developments in bench-marking the quality of administrative services in universities in the UK and overseas. He intends to seek consultancy advice and to take advantage of pilot projects under the HEFCE Good Management Practice scheme. In the meantime, the majority of Divisions in the Service have implemented Service Level Agreements, and have increased the volume of staff development and training, and a pilot User Satisfaction Survey has been undertaken.

It should not be assumed that the UAS will continue to expand, although it must be recognized that the University needs management and administration which can deliver the services which the University requires, at good value for money.

In the Discussion of the Board's Report, Dr M. R. Clark drew particular attention to the comments by the Board on the Research Services Division and the Technology Transfer Office (paragraphs 63-66), and to proposals then before the Council for changes in arrangements for support for technology transfer and business creation. A Notice giving further details of these changes will be published separately.

X. The Board recommends that there should be improved induction procedures for staff, in particular as regards the democratic and academically led culture of the University, including Colleges. The Board recommends that the current democratic structures of governance of the University be fully exploited.

The Council are fully committed to developing the academic self government of the University.

The University's 'full' Human Resources Strategy (Reporter, 2001-02, p. 773, http://www.admin.cam.ac.uk/reporter/2001-02/weekly/5884/20.html) emphasizes the importance placed on staff development. A regular review of the provision will be undertaken by the new Staff Development Committee. The full list of courses provided by the Staff Development Office is available at http://www.admin.cam.ac.uk/offices/personnel/staffdev/list.html.

XI. In cases where the University is in danger of not satisfying its legal obligations, the administration needs the power to require its advice to be followed.

The Council agree that administrative and management arrangements must permit the University to discharge its legal obligations, both centrally, and in Faculties, Departments, and other institutions. The work of the Audit Committee and of the new Risk Management Steering Committee will prove invaluable in this regard.

The Council have accepted advice from the Registrary that given the structure of authority in the University and in particular the roles of the Regent House, the Council, the General Board, and their committees, it would be inappropriate and in practical and definitional terms, difficult for individual officers to be given 'the power to require [their] advice to be followed'. There are very rare exceptions to this; for example the Director of Health and Safety is authorized to require unsafe systems of work to be immediately discontinued in serious and urgent cases of malpractice. In other cases, the Council have instructed the Registrary and through him his colleagues, that officers should urgently advise the Chairs of relevant Committees, and in particular the Chair of the Audit Committee, of cases where decisions were being taken, or not taken, which rendered the University liable to be in breach of external statutory requirements.

In the Discussion of the Board's Report, Dr R. L. Tapp made several proposals in regard to the University's Disability and Employment Policy and, in particular, that the effectiveness of the policy would be enhanced if it were given statutory authority by incorporation into Ordinances.

Following discussions between the officers of the Personnel Division, the Disability Resource Centre, and the Occupational Health Service, proposals will be put to the Personnel Committee and the newly established Joint Committee of the Council and the General Board on Disability in the near future for revisions to the policy. These revisions will include provision for monitoring cases, dispute resolution, and the funding of adaptions. At the same time the Committees will be asked to consider recommending to the Council and the General Board that the revised policy be put into Ordinances.

With regard to promotion procedures, provision in relation to disabled candidates has been included in the senior academic promotion procedure recently approved by the Regent House. Similar provision has also been made in the proposals of the Council and the General Board on regrading and discretionary awards for other staff groups. The outcomes of these changes will be investigated with promotions committees and with disabled members of staff themselves, for example through the Disability Forum.

Disability discrimination training, provided by the Disability Resource Centre, has been included in the staff development programme since 2000-01. A handbook for staff with disabilities is being compiled by the Disability Resource Centre and management guidance for heads of institutions is also being prepared in collaboration with the Personnel Division.

Table of Contents

(i)	a root and branch review of costs and sources of funding, taking into account all of the University's resources, identifying Trust and Special Funds that can be used to support Chest activities, and reallocating unspent reserves where possible;
(ii)	proper forecasts and budgets, based on that review, and prepared inter alia in the form of the principal statements of the statutory accounts; and
(iii)	that the results of this exercise are published by the end of the first half of the University's financial year, that is 31 January 2003.

(i)	the balance on the relevant University fund after giving effect to the allocated amount,
(ii)	a statement as to whether the donations have been received, and if not, whether they are legally committed, and
(iii)	a statement on the consequences on cash flow of any deferred external funding.

(i)	the Council publishes a detailed Report on its Estates Strategy, including: an assessment of the financial implications of its Building Programme; its policy on, and plans for the maintenance of existing and future buildings including information on actual and target spend on maintenance expressed in terms of £ per square metre; and its compliance with the Estates Management requirements of the Financial Memorandum,
(ii)	the Council allocates specific amounts against a fully costed plan for compliance with Health and Safety and Disability and Environmental legislation as it affects buildings and equipment,
(iii)	the Council considers the remits, the membership, the resourcing, and the interrelationship of their committees, and their sub-committees, the Planning and Resources Committee, the Resource Management Committee, and the Finance Committee to ensure that decisions are taken at the right level by the right people on the basis of full information; and publishes the results of their deliberations by the end of the Michaelmas Term 2002, and
(iv)	rather than projects being presented piecemeal, the Capital Programme is presented as a whole with supporting analyses, so that there is an opportunity to assess projects against a strategic plan rather than to prioritize projects on the basis of first-come, first-served.