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Tuesday, 8 July 2003. A Discussion was held in the Senate-House of the following Reports:
Report of the Council, dated 9 June 2003, on amendments to Statute G, III and G, VI (p. 1017).
Mr C. P. LARKUM:
Madam Deputy Vice-Chancellor, I address you this afternoon, to my pleasure, as the former chairman of the Bursars' Committee working party on College Accounts. The working party was dissolved by the Bursars' Committee at its meeting on 3 July (last Thursday), having been in being since November 1997 when it was set up in response to concerns about College Accounts that had been referred to the Bursars' Committee by the Finance Committee of the University. I added 'to my pleasure' not simply because the six-year task of designing new accounts for the Colleges has been an arduous - and often a thankless - one, but because the working party's disbandment by the Bursars' Committee reflected their belief that it had achieved its objectives. That belief is also reflected in the recommendations of the Council in its Report on amendments to Statutes G, III and G, VI that we are discussing today. And lest I give anyone the wrong impression, the working party was disbanded not because its proposals (as embodied in the Council's Report) are seen as being the end of the line, but because the Bursars' Committee felt it was an appropriate time to begin establishing the new machinery for permanent monitoring of College Accounts that is integral to the recommendations of the Report.
My purpose today, as may be imagined, is to commend to the Regent House the Council's Report and the proposed new form of College Accounts. It may be helpful to begin with a little perspective. The College Accounts that the Report seeks to replace, were devised in the wake of the 1919-22 Royal Commission on the Universities of Oxford and Cambridge. Their primary concern was with the accurate and transparent calculation of University Contribution and they were in effect imposed on the Colleges from 1926. They include no income and expenditure account in the modern sense, and no balance sheet in any sense. It is scarcely an exaggeration to say that from 1926 to the present time they have remained unaltered, taking no cognisance of the advances in accounting practice that began with the Companies Act 1947 and have been a constant influence in the period since. The pace of change in accounting practice accelerated markedly after 1990 and shows, to date, no sign of slowing - hence the concern of the working party to provide for a permanent mechanism to oversee College accounts and make recommendations for future change.
Why did the working party's task prove so protracted? In the first place the lack of change in College accounts since 1926 was a huge factor for inertia. In this we were different from Oxford, which had responded to the Franks Report of 1966 by adopting a new form of College accounts - the so-called Franks accounts - and by instituting a College Accounts Committee enjoying statutory authority. That committee has since given the lead in all matters relating to Oxford College accounts and has gained acceptance and authority in the process. Significantly, whilst Oxford has also recognized the need for further change to its accounts over the past five years, it began consultations on a new format well after the working party in Cambridge began its work, and it completed them early enough for the amended Oxford accounts to become the required form a year ahead of those now proposed for Cambridge. The Regent House will wish to know that there was active communication between the College Accounts Committee in Oxford and the working party in Cambridge in drawing up the form of College accounts now recommended in the Council's Report.
A second factor that militated against rapid progress - and no doubt also accounted for the absence of change in the form of College accounts since 1926 - was the provision of the Universities of Oxford and Cambridge Act 1923 (that other great outcome of the Royal Commission) that no statute of the University affecting a College might be 'subject to alteration except with the consent of the College'. The purpose of the Council Report we are discussing today is, of course, the alteration of two Statutes that affect the Colleges, which must therefore be with their consent. This provision of the 1923 Act necessarily informed the approach of the working party. I referred earlier to the working party's objectives. They were, as set out in one of the working party's many reports, to develop a new form of accounts that would: (i) be acceptable to Colleges; (ii) have full regard to today's accounting standards; and (iii) would not leave the Colleges or the University open to obvious criticism. While many may see the second objective as being of paramount importance, the working party was conscious from the start that it would not achieve the second objective except by realizing the first.
What then did producing a form of accounts that would be acceptable to the Colleges mean in practice? It meant advancing by persuasion rather than by prescription. It meant identifying the key areas of modern accounts that were unfamiliar to Colleges in terms of how their accounts were then presented, and where resistance to change might be expected; it meant producing detailed discussion papers on those accounting areas (the working party produced seven in total); it meant subjecting the papers and themselves to scrutiny at successive meeting of the Bursars' Committee and at extraordinary meetings of the Committee called to discuss the working party's reports; and it meant seeking a mandate from the Bursars' Committee in respect of each paper, which then became a policy paper. This process was worked through until each paper was endorsed by a vote of the Bursars' Committee registering an overwhelming majority in its favour.
Producing accounts acceptable to the Colleges also had important implications for the form of accounts the working party set itself to produce. This is a crucial point and bears some further explanation. A frequently heard criticism of the working party's measured progress has been: 'What is the problem? There is a ready-made Statement of Recommended Practice (SORP) covering the accounts of higher education institutions - the FE-HE SORP. Why can't Colleges simply be instructed to adopt that? But if they don't like that, there is another directly relevant SORP - the Charities SORP - already used by a number of University bodies. Let them adopt that.'
Part of the difficulty, as already mentioned, lies with the consent provision of the Universities of Oxford and Cambridge Act 1923. But a more telling factor is precisely the existence of two potentially relevant SORPs. SORPs are interpretations of accounting standards designed to apply to a cohesive group of organizations that have strong characterizing features in common, and the fact that two are pointed to for Colleges reveals, almost ipso facto, that neither is likely to be well tailored to their needs. Colleges are not universities, not even mini-universities; nor are they charities in the common image of charities, namely organizations whose activities are in large measure governed by the need to raise money from the public - not yet at least. The working party concluded early in its work that each of these 'relevant' SORPs would constitute an uncomfortable strait-jacket for Colleges and would not present their accounts in the most meaningful, transparent way for the Colleges themselves, nor for typical users of their accounts.
The working party therefore set itself to design a form of accounts for Cambridge Colleges that would be fully compliant with accounting standards - the essential base-line if the accounts are to receive a 'true and fair' report from the auditing profession - but which would also be sensitive to the structure and the special needs and interests of Colleges. It set out, if you like, to come up with its own SORP for Cambridge Colleges, and that is what I believe it has achieved. That too is what the Bursars' Committee and the Finance Committee of the University concluded it had achieved.
I think it can be assumed therefore that the form of College accounts favoured by the present Report meets the first two of the objectives referred to earlier. What about the third, namely that the new accounts should not leave the Colleges or the University open to obvious criticism? Can we be criticized for not adopting one of the existing accounting SORPs? As we know, Oxford and Cambridge can be criticized for anything and everything, so it would be foolish to deny this possibility in regard to the new accounts. However, if we turn the question round and ask if the proposed accounts are defensible, I would argue that they are entirely defensible.
They were prepared with the active involvement, without fee, of the managing partner of one of Cambridge's leading auditing firms (who deserves real thanks for the large incursions we were allowed to make on his time); they were exposed for comment to partners in the other College audit firms; and, as I have already mentioned, they were developed with the conscious aim of ensuring that they conform in all respects to accounting standards. They have the greater part of their content in common with one or other of the two SORPs with which they will be compared (the working party having been happy to use them, up to an appropriate point, as models) so that the differences from these SORPs are neither greater nor more significant than the particularities that will commonly be found in any SORP when compared with another.
It may be of interest to the Regent House to know that while the Oxford College Accounts Committee and the Cambridge working party on College accounts started from widely different positions in terms of existing forms and practice, the College accounts now adopted in Oxford and those proposed for adoption in Cambridge are very similar. They are not identical, since it was not part of our remit to produce a single form of accounts for Oxford and Cambridge, but they are the same in essentials. Oxford, too, concluded that the HE-FE SORP and the Charities SORP were unsuitable for College use and developed their own format based on accounting standards.
I am satisfied, therefore, that should there be criticism of Cambridge for not requiring the Colleges to present their accounts in the form prescribed by one or other of the so-called 'relevant SORPs', it will be opportunistic, poorly informed criticism without staying power. I have here the handbook issued to Colleges to assist them in implementing the new accounting format, known as the Recommended Cambridge College Accounts or RCCA. The handbook is over 100 pages in length. It explains the relevance to Colleges of all accounting standards (SSAPs, FRSs, and UITF abstracts); it sets out the model form of RCCA accounts; and it contains the working party's policy papers already referred to. It has been developed in consultation with the Colleges' audit firms in Cambridge and has an intellectual rigour that makes it comparable to the guidance documents published in other areas of the accounting profession. I commend it to Colleges and to the Regent House.
Finally, may I thank all who have contributed to the work of the working party; in particular our professional adviser, Mr Chapman of Peters Elworthy and Moore, and the five Bursars who have worked with me as members of the working party since November 1997 and who have each authored one (and, in Ms Lowther's case, two) of the policy papers: Mr Kerr (Robinson), Ms Lowther (Girton), Dr Lintott (Downing), Mr Pratt (Fitzwilliam), and Mr Wright (New Hall).
Professor G. R. EVANS (read by Dr D. R. DE LACEY):
Madam Deputy Vice-Chancellor, Dr Alan Findlay put immense effort over many years into trying to get the form of College Accounts put onto an acceptable required basis. That should be acknowledged; campaigners can have their uses. Wry smiles permitted.
A few brief points on the inwardness of this Report, with reference to the question of accountability. One is amused that the University, criticized by HEFCE for its own accounting inadequacies, the University which begot CAPSA, should be proposing to supervise all this through the Finance Committee of the Council. And what is to happen if a College fails to comply? Well, the independent Auditor shall 'state in writing the reasons for that', and 'the College shall send the statement to the Treasurer'.
But we are to bid farewell to two of our Principal Administrative Officers (Reporter, p. 1048) in September. One of them is the Treasurer. (Let me express my personal friendly feelings towards her; this is merely constitutional stuff.) I have not seen advertisements of either post. If these two are to be the last holders of their offices, what is now needed is more than 'further information about other consequential changes' (p. 1048). We cannot alter Statute G in these terms if there is in future to be no Treasurer. I know the Registrary is aware of this problem but the Council and its Business Committee should surely have done us the courtesy of realizing that we would spot it too, and wording this Report accordingly.
But perhaps it will not matter since it is apparently not anticipated that anything will happen if a College does send in such a statement.
It is worse than that. Colleges may apparently choose to take their time over complying or not to comply at all. That does not seem to me to be in the spirit of the great change made by the Oxford and Cambridge Act 1877, which made Colleges financially answerable to the University and required them to assist it with its own funding. In these recent days of the payment of the College fee to Colleges through the University, the financial interdependence of these autonomous bodies has grown yet more complex. Is it mischievous of me to suggest that whatever the truth of the story which appeared in The Times on 28 June, St John's' Bursar may wish to render account of his stewardship under Statute G, II, 1 to his fellow Council members and their Finance Committee? Just as a test of the way all this might work.
Dr A. L. R. FINDLAY:
Madam Deputy Vice-Chancellor, two cheers for this Report. Its title is hardly eye-catching and yet it is, nevertheless, an important milestone. The RCCA is, even to my untutored eye, an improvement on the existing form of statutory College accounts which, as we have been reminded, includes 'no income and expenditure account in the modern sense, and no balance sheet in any sense.' The existing form of College accounts does not remotely provide a 'true and fair view'; indeed, all that it can be said to provide is, in the currently prescribed words of the auditors' certificate, 'a true and fair statement of the transactions of the College for the [year] and of the resultant balances as shown by the books of the College.' In addition, as we have heard, the accounts are required to show the basis on which the College contribution to the University is calculated.
My interest in this matter arose when I was a member of the Council of the Senate, as it then was, in the early 1990s. A new Charities Act 1993 came into being which served to consolidate several components of earlier Charities legislation. The University of Cambridge, including components such as Cambridge University Press and the Local Examinations Syndicate, and the Colleges, are all charitable bodies, and like all charities (exempt or non-exempt) became obliged to make their accounts available to members of the public.
What was the idea behind the legislation? Professor Kevin Gray reminded me in January 1994 of the words used by Earl Ferrers in November 1991 when moving the Second Reading of the Charities Bill in the House of Lords:
'The underlying purpose [of the Bill] is to enhance public confidence in the charitable sector by ensuring that charities are well managed and properly regulated. It is not a question of increasing bureaucracy, which none of us wants; but it is a question of ensuring that there should be a regime which will result in the public having confidence in the charitable sector. We think that the best way of maintaining the public's goodwill is to ensure that every charity is accountable, publicly and openly, for the manner in which it conducts its affairs.'
That requirement for public and open accountability means not only that charities must make their accounts available to the public, but that those accounts should meet a standard which enables those accounts to present a true and fair view of the financial affairs of the charity. It is the achievement of the 'true and fair view' that is the purpose of the various Statements of Recommended Practice (SORPs) to which reference has been made by Mr Larkum. I am not expert enough to know all the features of a set of accounts that are regarded as necessary to establish a 'true and fair view'. However, one feature appears both in the Charities SORP and in the Higher Education SORP, and its presence seems to represent a reasonable yardstick for determining whether a set of accounts is true and fair. That is the requirement that, in the Notes to the Accounts, the Remuneration of Higher Paid Staff should be listed by showing, in bands of £10,000, the number of employees receiving annual remuneration in excess of £50,000. From such Notes, we can, for example, learn from a set of Charities-SORP-compliant accounts produced by Eton College that in the year ended December 1998, 46 persons at Eton College earned between £50,000 and £59,999, three earned between £60,000 and £69,999, one between £70,000 and £89,999 (sic), and one between £100,000 and £109,999. Similarly, we discover from the accounts of Cambridge University Press for the year ended December 2001 (now produced in accordance with the Charities SORP) that 67 employees earn more than £50,000, one of whom earned somewhere between £190,000 and £199,999 - a good deal more than the Vice-Chancellor or the Prime Minister. This information is now, commendably, published on the Web, and is obtainable in a pdf file from http://uk.cambridge.org/information/annualreport/.
The RCCA, as described in the Schedule of Report we are now discussing, makes no mention of Remuneration of Higher Paid Staff. I have been assured informally that such information will, in fact, appear in the RCCA. If that is the case, why was it not included in the details of the 'Notes to the Accounts' that appear on pages 1022 and 1023 of the Reporter? Are there other things which will be included in the Notes to the Accounts which we have not been told about? More importantly, are there important things, included in either the HEFCE SORP or the Charities SORP which the Colleges could reasonably be asked to disclose, but which the Bursars have decided that they would prefer not to disclose? There could be a variety of reasons for deciding that it would be 'inappropriate' to include information: one is that it would be awkward or embarrassing; the other is that it would simply not fit with the way Colleges do their business. It would be good to be reassured that all decisions to exclude features found in the HEFCE SORP or the Charities SORP have been based on the latter grounds, and not on the former. But obviously, if members of the Regent House are to make an informed judgement about whether or not the RCCA will provide a true and fair view, they need access to all details of the RCCA, not just to a selected sample of its components.
I have a second, and more serious, misgiving about the Report. We read that 'the majority of Colleges have indicated that they wish to implement the RCCA at the earliest opportunity'. But we are also told that two Colleges have indicated that they intend to continue for the time being to use the current statutory accounts. Those Colleges are, I believe, Christ's and Trinity.
Now the current wording of Statute G, III includes, in paragraph 2, the requirement that 'Every College shall send to the Treasurer on or before 31 December next after the closing of its accounts a statement of its accounts as nearly as practicable in the form contained in Schedule D, or in such modified form as the University may from time to time direct'. Note that last verb - 'direct'. The University presently has the statutory power to direct Colleges to produce accounts in a certain form. If the recommendations of this Report are approved, the University will give up that power. And it will give up that power knowing that at least two College may well choose, for the indefinite future, to continue to produce accounts in an obsolete format. That seems to me like a bad idea. The Colleges shall, in future, be required to 'have regard to' the RCCA, but are permitted to flout those recommendations if they so wish by continuing to produce accounts in a form which, by common consent, does not provide a true and fair view, because it does not conform to current accounting standards. The University should not tolerate the continued presentation of accounts which are manifestly unsatisfactory. And the University should not, at this critical moment, abdicate its power to be intolerant.
May I remind members of the Regent House of what is meant, in this context, by 'true and fair', by repeating part of what I said a few years ago in this place?
Valuable guidance comes from a Legal Opinion on 'True and Fair' issued in November 1983 (Palmer's Company Law, F. 640 - F.643). This opinion was obtained by the Accounting Standards Committee (ASC) from Leonard Hoffmann, QC (now the Right Honourable Lord Justice Hoffmann) and Mary Arden (now the Honourable Mrs Justice Arden). Palmer's Company Law states that 'The opinion gains its weight from the quality of its argument, and needs to be read in its entirety. It is difficult to summarise; indeed it would be misleading to attempt to do so. The ASC intends to take account of the opinion in all its future work.' It is also noted that the material should be read in conjunction with a later opinion of 1993 which appears as paragraph F.008/2. This later Opinion, by Mary Arden, takes account of developments during the ten years separating the two Opinions, including the shift of responsibility from the Accounting Standards Committee to the Accounting Standards Board, and the publication in 1988 of a Report entitled The Making of Accounting Standards by a Committee chaired by Sir Ron Dearing. Having noted that it would be misleading to attempt to summarize the first Opinion, I shall court criticism by quoting two extracts:
From paragraph 4, ' 'True and fair' is . a legal concept, and the question of whether accounts comply can be authoritatively decided only by a court.'
From paragraph 9, ' the courts will treat compliance with accepted accounting principles as prima facie evidence that the accounts are true and fair. Equally, deviation from accepted principles will be prima facie evidence that they are not.'
And from paragraph 8 of the later opinion by Mary Arden: 'The status of accounting standards in legal proceedings has also in my view been enhanced by changes in the standard-setting process since 1989.'
Her final paragraph 15 ends as follows: 'Just as custom which is upheld by the courts may properly be regarded as a source of law, so too, in my view, does an accounting standard which the court holds must be complied with to meet a true and fair requirement become, in cases where it is applicable, a source of law in itself in the widest sense of that term.'
To summarize. We have accounting standards. The RCCA, we are assured, meets those standards. The current statutory form of College accounts does not meet those standards. The University can direct Colleges to produce accounts which meet those standards, but the effect of these proposals will be to cause the University to lose that power, in the knowledge that two Colleges do not propose to follow the new format.
The strength of the collegiate system is, it could be argued, the strength of its weakest link. Two Colleges are proposing to continue to produce accounts which will not provide a true and fair view. That is surely, Madam Deputy Vice-Chancellor, unacceptable. The University should not, at this critical moment, be abdicating its power to compel them to mend their ways. The University must retain its power, when push comes to shove, to direct.
Dr O. RACKHAM:
Deputy Vice-Chancellor, I would criticize the new accounting practice on two grounds. Firstly, maintaining a stable form of accounts is not entirely due to mere inertia. One of the purposes of having accounts is to enable comparisons to be made from year to year; and that purpose is defeated every time the form of accounts is changed. How is anyone asking whether the fortunes of such-and-such a College are rising or falling expected to get over the dislocation which will arise between 2003-04? The old and the new forms of accounts need to run in parallel for a few years.
Secondly, I see that Colleges are supposed to go through the motions of entering the value of all their tangible assets. This seems quite unrealistic. What, for example, is the value of King's College Chapel? When was the last time a King's College Chapel appeared on the market? Any attempt at valuing it would produce a huge but quite unmeasurable amount: maybe £100m, maybe £1,000m - who can tell? My point is that the balance sheet of King's College is going to be dominated by a gigantic but nebulous amount and will therefore be itself nebulous. Whether that is a fair balance sheet is a matter for debate but it will not be a true balance sheet.
Report of the Council, dated 9 June 2003, on the construction of plant growth and Herbarium buildings at the Botanic Garden (p. 1024).
Professor J. C. GRAY:
Madam Deputy Vice-Chancellor, I commend this report and hope that the Council's recommendations can be fully accepted, so we can achieve our aim of new plant growth facilities and a new Herbarium at the Botanic Garden. I have been the Head of the Department of Plant Sciences for exactly one week, but I have been a member of the Department for 27 years - and throughout that time the facilities for growing plants in the Department have been inadequate. More recently, the widespread introduction of genomics and large scale biology has required that we improve both the quality and quantity of our growth facilities. Because we are on a central site, our growth facilities have been greenhouses on the roof, or growth rooms tucked away in odd corners, and we have had to seek additional space in other buildings - first in the Sir William Hardy Building and more recently at the Old Press Site. But the quality of these facilities is very low, particularly compared to other universities and research institutes. Research Institutes such as the John Innes Institute and Rothamsted Research, and most universities with a serious interest in plant sciences have upgraded their facilities in recent years, and we have been left behind.
Largely through the work of Roger Leigh, the Professor of Botany, and John Parker, the Curator of the Herbarium and Director of the Botanic Garden, we now have costed plans, and proposed funding from SRIF-2 and a charitable foundation, to build new state-of-the-art growth facilities at the Botanic Garden. These facilities will provide the space we need with the necessary controlled environments, of light, temperature, and humidity, and containment for the plants we need for our research and teaching. These facilities are absolutely essential for the future success of Plant Sciences - without them we will not be able to compete with other universities and our research and teaching will languish.
I wholeheartedly recommend acceptance of this report.
Dr M. A. TESTER:
Madam Deputy Vice-Chancellor, there are stirrings down at the Gardens. Change is afoot. Big change. Plant sciences is undergoing a revolution. The controversy surrounding GM crops is the public symptom of this revolution. But for the scientists elucidating plant function, this change is profound. We can easily clone plants, we can easily generate huge numbers of transgenic plants, and then we can throw them in a blender, relatively unfettered by the technical and ethical constraints hindering animal researchers. Combined with the recent abundance of genomic information, these new technologies are providing extraordinary opportunities to design experiments where the functions of plants are probed in a manner like never before.
In the past, experiments were designed with great attention to detail, and developmental and physiological processes were probed with reductionist zeal. A well-equipped lab and some growth chambers generally sufficed. Nowadays, however, we have the new tools of genomics, bioinformatics, and robotics. Using these, significant advances are being increasingly made as a result of experiments in which large-scale screens of large numbers of transgenic plants and other mutants are performed. In these experiments, carefully considered pragmatic decisions are taken in the 'depth' of the design, with the pay-off being the chance to perform these experiments on very large numbers of plants, each plant having known genes disrupted. In this way, one can investigate the relevance of every gene in the genome to a particular process of interest. You can call it 'molecular genetics', or 'functional genomics', it doesn't matter. The point is that this is new science, it is big science, and it is a significant part of the future of plant science. And it requires much more extensive growth facilities than have previously been required. These new needs have not yet been met by this University, but they have elsewhere. As Professor Gray said, 'We have been left behind'. As a result, despite the many other attractions of Cambridge in general, and the Department of Plant Sciences in particular, people are starting to leave.
Let me give three examples of imminent departures from our Department. Dr Alex Webb studies large numbers of sophisticated transgenic plants using highly controlled environmental conditions - I have directly observed how the dilapidated growth conditions he has struggled against here have significantly retarded his progress. He is leaving for a post in Sheffield, where their new growth facilities, funded by a recent JIF grant, are a significant attraction. Dr Thomas Martin screens tens of thousands of mutants for those in which members of the gene family that he studies are disrupted. He could not even perform this work here, due to both lack of space and the low quality of the space that is available. He did significant amounts of his experiments in Germany. He is leaving for a job in Perth, where state-of-the-art facilities are a significant attraction. And the third example is a case where I can speak with more authority - myself. In my group of over 20 people, we have mutagenesis and screening programmes in both Arabidopsis (the classic model plant) and rice (which feeds half the planet). Although we manage the former here, the latter was impossible to do here for the lack of facilities. We had to do all this work in France, where the greenhouses enabled the generation of the 11,000 lines essential for the progression of this research. This will cost the University both in terms of publications and future IP-derived income, which will have to be shared with the French collaborators. In any case, I will be moving to Adelaide at the end of this year, where a new building and state-of-the-art growth facilities provide a major attraction. The lack of support for plant sciences at all levels in the UK was the main reason for leaving, the lack of large-scale growth facilities in Cambridge being both a primary reason and a symptom of the wider malaise.
The construction of new state-of-the-art growth facilities in Cambridge will contribute significantly towards people's decisions whether to stay, or to come, to Cambridge. They will help to retain the world-leading status of this Department, a status that is currently in serious peril unless the University responds quickly to the recently changing demands of the newly invigorated field of plant sciences. I strongly support this Report and commend it to the Regent House.
Dr O. RACKHAM:
Deputy Vice-Chancellor, I warmly welcome both these projects. I was one of those who used the original plant growth cabins, invented shortly before by Professor Clifford Evans in the Botany School. For thirty years and more my successors have had to interrupt their experiments and move themselves and their ponderous machinery from light-well to bedroom to corridor to basement every few years, and I applaud the decision to give them a permanent home.
Even more strongly I applaud the decision to give the Herbarium a new home. The Herbarium, of which I have also been a user, is less well known in Cambridge than in the outside world, where it is one of the institutions which give Cambridge an international reputation. Its present quarters on the ground floor of a large and busy laboratory have become quite unsuitable as risks of flood and fire have increased over the years. I wish it well in raising the money for a separate purpose-built building.
Report of the Council, dated 9 June 2003, on Phases 5 and 6 of the Stage III extension to the University Library (p. 1025).
Professor M. SCHOFIELD:
Madam Deputy Vice-Chancellor, I speak this afternoon in my capacity as Chairman of the Library Syndicate, to commend to the Regent House the recommendations of the Council's Report on Phases 5 and 6 of the Stage III extension to the University Library. As the Report reminds us, these proposals carry forward the next stage in a development plan for the Library which has been devised to meet the needs of its users and collections until around 2025. The plan was approved by the University in 1993, and the strategy adopted involves building extensions to the Library in phases as funding becomes available. Members of the Regent House will have seen how this development plan has been put into action, with the construction of the Aoi Pavilion, the basement bookstack to the west of the building, the exhibition centre, and now the north-west and south-west corners.
The development that is the subject of this Report is the penultimate phase and one of the most crucial for the continuing efficiency of the Library and of its service to the University. With the exception of the basement bookstack (the cost of which was met by the Press), all the previous phases were funded for the most part by external donations, with conditions as to use laid down by the donors. This has meant that, though the overall construction is along the lines approved by the University in 1993, the priority given to the phasing has had to reflect the requirements of the donors, and these have not always coincided with those of the Library and the University, which would have been to construct this bookstack at an earlier stage had the resources to build it become available.
The continuing output of paper-based publication - which as yet shows no diminution despite the parallel growth in electronic publishing - has placed the storage capacity of the Library under great pressure in recent years, with the basement bookstack providing only temporary respite. The Library needs the extra storage space to be contained in Phase 5 as a matter of great urgency if it is to be able to continue to fulfil the vision of our predecessors by storing all its collections on site and thus providing Cambridge readers with a level of service envied by users of other great libraries. Adherence to the strategy shaping the 1993 plan has also proved on examination of alternatives to be the most economical solution to the storage problem as well as the one most helpful to readers.
Funding for this phase has been provided entirely from within the resources available to the University (chiefly the Press Fund and Trust Funds under the control of the Library Syndicate) and, as members of the Regent House will see from the Report, it is sufficient to build the shell and to fit out only half of the accommodation. This will at least provide the Library with breathing space for a few more years, and it is hoped that, through the successful fundraising campaign currently under way, sufficient funds will become available before the completion of the shell to fit out the entire phase.
The Library Syndicate attaches the highest importance to the swift completion of the project, and we trust the Regent House for its part will speed it on its way.
Professor G. R. EVANS (read by Dr D. R. DE LACEY):
Madam Deputy Vice-Chancellor, 'The Council recommend II That the Treasurer be authorized to accept tenders for the works in due course, within available funding' (p. 1027). Compare 'The Council recommend II That the Treasurer be authorized to accept the first stage tender' (Botanic Garden Report, p. 1025). This is in the same league as the Prime Minister's abolition of the Lord Chancellor without realizing that there was going to be a problem about the Speaker of the House of Lords. I repeat. We are to bid farewell to two of our Principal Administrative Officers (Reporter, p. 1048) in September. One of them is the Treasurer, who is, it seems, not to be replaced.
We must not add to the legislative confusion by gracing the impossible now. What can the Council be thinking of? And what of all those Graces by which we have given our consent in the past to the Treasurer's accepting tenders for this and that? We shall need fresh Graces on all of those too, shall we not?
Second Report of the Council, dated 9 June 2003, on accommodation for the Leverhulme Centre for Human Evolutionary Studies within the Department of Biological Anthropology (p. 1027).
Dr R. A. FOLEY:
Deputy Vice-Chancellor, I speak as the Director of the Leverhulme Centre for Human Evolutionary Studies, which was established in 2001. The idea of promoting human evolutionary studies in Cambridge goes back to 1999, when Dr Mirazón Lahr and myself received the approval of the University to submit a JIF bid to establish a research centre. Although that bid was not successful, we have since received over £5m in support from The Leverhulme Trust, The Wellcome Trust, and SRIF, as well as very substantial research grants, to achieve this end. The proposal for a building to house these activities was graced on 21 June 2002.
The Leverhulme Centre for Human Evolutionary Studies represents a major initiative in the Faculty of Archaeology and Anthropology, and the School of Humanities and Social Sciences. and has already attracted very substantial support. Human evolutionary research today is central to both the natural and social sciences, providing an opportunity to foster inter-disciplinary research. New techniques such as molecular genetics and digital imaging are revolutionizing the subject, while bioinformatics is rejuvenating the more established approaches to the subject. The re-housing of the Duckworth Laboratory, which contains the University's human biological collections, that are among the best in the world, has long been recognized as a priority. A dedicated and well-designed building, to provide both the physical and the intellectual environment. is essential to the long-term success of the Centre.
The set-back brought about by the contamination of the existing building in Fitzwilliam Street has been substantial. and this new proposal should be welcomed by the Regent House as a matter of urgency to maintain Cambridge as a centre of research and teaching excellence in human evolution, and in archaeology and anthropology more generally.
Mr J. P. EMMINES:
Madam Deputy Vice-Chancellor, I am speaking today in my role as a professional safety adviser with a particular remit for buildings and construction. In this role I have been part of the team engaged on the contamination problems associated with the building in Fitzwilliam Street that has been in turn the John Bonnett Laboratories for Addenbrooke's Hospital, an annexe to the department of Biochemistry and is due to rise, phoenix-like, as the Leverhulme Centre for Human Evolutionary Studies in Biological Anthropology if this Report under discussion today is accepted.
The purpose of my remarks is to congratulate the University authorities on the hard, but sensible, conclusion that the best thing to do with this contaminated structure is to carefully demolish it, clean the site, and rebuild anew. I am confident that long-term expense will be saved as the costs involved in managing a contaminated building are high as we, in the Health and Safety Division, already know.
The obvious cost of managing a contaminated building by permits to work, health surveillance, and continuous monitoring of contaminant levels is well known and can be calculated. There are also hidden costs in leaving a contaminated building standing, not least in the health concerns of staff required to work in that building, but also with the continuous changes to health and safety legislation. What message are we sending to potential recruits when we inform them that they will have to undergo continuous health surveillance if they accept the offer of a job? It could be that workers who feel their future health conditions may well have been caused by their place of work will have a strong case for litigation in times to come. This type of legislation is already in place with particular regard to asbestos. Who knows what other potential contaminants will be added to the list in the future.
In conclusion I would reiterate that the decision to demolish is sensible and humane and I applaud and fully support the recommendation laid down in this second Report and recommend it to the Regent House.
Report of the Council, dated 9 June 2003, on a proposal for a new building at West Cambridge to be known as the East Forum (p. 1029).
Mrs J. M. WOMACK (TREASURER):
Madam Deputy Vice-Chancellor, 'timeo danaos et dona ferentes'. We live in an age of spin and counter-spin, in which every proposal made by the Council is examined with suspicion, to see what sort of a Trojan Horse it may be. Particularly deep suspicion is directed towards any proposal which seems to bolster up the perceived desire of the central bodies and, especially, the central administration, to steal academics' intellectual property rights, to suppress academic freedom, and to deliver the University into the hands of the Government and the business community. Over the past few years I have found it increasingly hard to recognize any part of this caricatured University. Where I work, admittedly at the metaphorical and literal top of the Old Schools, my administrator colleagues, in and out of the central administration, spend long hours trying to support the academic community as best they can. They recognize that money is tight, that initiatives need help, that academic freedom is vital. They also recognize that Government requirements have to be complied with, that freedom does not mean free-for-all, and that academic leaders will sometimes melt away when the going gets tough. They have to be independent and imaginative, and yet fully accountable. They have to combine the role of servant with that of enthusiastic entrepreneur. Increasingly they have to find ways to fund the services they are required to provide. Up to now they have had to depend for any capital requirements on the goodwill of the Resource Management Committee.
This Report brings before the Regent House at an earlier stage than usual a proposal for yet another new building at West Cambridge. The Report has been written in the light of critical comments made by the Board of Scrutiny about the way in which the Regent House had been 'bounced' into a number of earlier buildings projects. Some money has been spent on developing the proposal to this stage, but as Treasurer I have stopped any further expenditure until the Regent House has had the opportunity to consider the project as described and to express its views. I have tried very hard, with the assistance of the project team, to set out in this Report, both for Council and the Regent House, all the issues which we think may be of concern. We have also reviewed points made on the ucam.change.governance website and I will try to address these today. If major concerns remain, they will no doubt be raised in speeches in this Discussion. I feel sure that the Council will wish to address those concerns before work is allowed to resume on this project.
The idea of the East Forum is not new. As the Report states, it appears in the Masterplan for West Cambridge which was approved by the Regent House in 1997. At that time it was no more than an outline on a drawing - representing a building which was required by the Planners as a social focus for the site.
The proposal which is now before you has been developed over a number of years, and reflects the changes which have taken place over that time. Six years ago we had no Entrepreneurship Centre, no Challenge Fund, no Research Services Division, no Corporate Liaison Office, no vision of unified support for knowledge transfer, no offer of a donation from the Hauser-Raspe Foundation. We did have a need for catering on the West Cambridge Site, but of course we had no Gates Building, no Microsoft Building, no Nanoscience Building. Indeed, we had no accepted University Mission and Core Values and no CMI.
The proposed East Forum is as described in the Council's Report. The three main objectives are set out in paragraph 4. The Report refers to a new organization, Cambridge Enterprise, which has been set up within the UAS with the aim of improving the way in which the University transfers knowledge. Universities have always transferred knowledge in one way or another, whether through providing highly qualified graduates into the job market, through publishing the results of research, through lifelong learning and other outreach programmes, through books, conferences, and, more recently, the Web. But Cambridge Enterprise focuses particularly on technology transfer through licensing and through the creation and support of spin-out companies. The objective of Cambridge Enterprise is not to maximize the revenues and financial returns from academics' intellectual property. Cambridge Enterprise will work within the University's IP policies, whatever they may be. Its objective is to help academics to make their inventions and discoveries more successful commercially, and to transfer their knowledge out of the University. Some academics do not need any help to do this, but many have been grateful for the support provided by the Technology Transfer Office or the Cambridge Entrepreneurship Centre or the Challenge Fund's seedcorn funding, all of which are now managed together within Cambridge Enterprise.
What has made the concept of the East Forum come together is the amazing generosity of two people, Dr Hermann Hauser and Dr Pamela Raspe. Through the Hauser-Raspe Foundation they have indicated their willingness to donate £8m, and to help raise a further £1m, to pay for the cost of building and furnishing space for Cambridge Enterprise, including incubation space for start-up companies, and for part of the Research Collaboration Office, the Corporate Liaison Office, and the Careers Service, as well as the cost of part of the atrium.
Maybe we should have stopped there, and put forward a proposal for a smaller building, totally funded by donations, which would house Cambridge Enterprise and a few other offices. However, we did not do that. Because of the requirements of the Masterplan the University has got to provide catering and other site-wide facilities somewhere, and the East Forum has been identified as the most suitable place on the site.
As the concept of the Forum developed, it became clear that co-location within the same building of a range of non-University organizations (venture capitalists, financial and legal consultants, business data providers, regional networks, and others) would, though the availability of support, funding, and advice, help to develop the dynamic entrepreneurial culture already exemplified in many of the other buildings on the West Cambridge Site. Of course this gives rise to possible conflicts of interest, and paragraphs 11 and 12 of the Report set out safeguards which have been incorporated in this proposal. Unfortunately, the lapse of time since the East Forum concept was first envisaged has covered a major economic downturn in the UK and elsewhere. The risks involved in putting up office and catering facilities for rent are much greater now than they were 4 or 5 years ago. There are many empty buildings in the South of England, let alone in Cambridge itself. So we have had to identify very carefully what needs to be done before this project is allowed to move to the next stage of development. I hope that the risk analysis in the Report is reassuring. Further points have been raised by contributors to various websites, and answers to these are as follows:
1. Issues have been raised about process. Construction of the East Forum will not start until the project has been brought to the Regent House for a second time, for explicit approval of a detailed proposal. This Report is a Report in principle.
2. The current status of the project is that the design work is still at feasibility stage. The next stage of fees (£730,000) will not be spent until the Regent House have approved the project in principle, a memorandum of understanding has been signed with the principal donor, and letters of intent have been received from most of the tenants. (The design has not yet been completed, and construction is not about to start.)
3. Construction of the East Forum will not start until tenants for 90% of the lettable space have signed binding Agreements to Lease. All the University office space will be paid for by donation. The running costs of the lettable space will be paid for by the tenants. The running costs of the University space are provided for in the Cambridge Enterprise business plan.
4. On catering subsidy, it is correct to note that, as with other University catering facilities, a subsidy will be required towards the cost of catering space. This is projected to diminish over time, as use picks up and the site becomes more busy. I repeat that the catering is a site-wide facility, required by the planning authorities.
5. The East Forum building itself does not include a shop. However, the residences/nursery development adjacent to the East Forum, which will be completed by Summer 2004, includes three commercial units along the southern boundary. This area is at the same level as the lower ground floor of the East Forum and will become part of an integrated pedestrianized area. Negotiations are in hand to secure a convenience store as a tenant with the intention of the store being able to commence operations once the residences are occupied. There will also be a commercially operated laundrette, primarily for the benefit of occupants of the residences, but available to all.
Discussions with several ATM providers have taken place with the aim of providing ATM facilities at West Cambridge. These discussions have explored the possibility of an early installation of an ATM machine at WEST with a subsequent transfer to a permanent installation in the East Forum or adjacent commercial units.
It should be noted that potential operators of commercial facilities need to satisfy themselves that there will be a sufficient number of users to justify a presence on the site.
Questions have also been raised about the business model for Cambridge Enterprise. I do not have time to address these here, but I can assure members of the Regent House that the Planning and Resources Committee has received a paper which set out such a model and that the Registrary has undertaken to include a review of that model in a report to the Council next term about the operation of the Unified Administrative Service generally. At this stage, it is enough to say that, as part of the University's central support services, Cambridge Enterprise will operate on a 'not for profit' basis, charging for its services to cover its own costs but also delivering revenues from grants and endowments, including DTI, HEIF, and CMI grants and the Wolfson Industrial Liaison Fund. Cambridge Enterprise will aim to manage its finances in a businesslike way, accounting for all revenues and expenditures, including its overheads, and showing where investment in new services will add value.
Cambridge Enterprise's relationship with the business community, represented in this building by the third objective in paragraph 4 of the Council's Report, is extremely important. Like the Corporate Liaison Office it aims both to look into and out from the University. The Regent House on 23 November 2001 approved core values which included the University's contribution to society through the application of knowledge and within the broader academic and local community, referring also to opportunities for innovative partnerships with business and others.
In today's economic climate, this aspect of the proposed building is the most risky. That is why we have stated much higher hurdles to be scaled, in the way of firm letters of intent and firm Agreements for Lease, before the project can go ahead. If the project team's optimism is false, and businesses do not want to sign up, then the project will have to wait for an upturn in the economy. If they are correct, and this is such an exciting vision that local businesses will wish to be part of it, then I hope that the Regent House will also give it their full support.
Mr N. M. MACLAREN (read by Dr D. A. GALLETLY):
Madam Deputy Vice-Chancellor, I welcome this Report as a model of clarity, but I am not so happy about the plans it describes. I believe that the essential next step is to commission an independent, precise, and costed business plan and risk assessment and to place that before the University. The Regent House can then take an informed decision, not one based on guesswork. If Council already has such a document, may we see it and then discuss the issue?
Professor Shattock's recommendation 10.3 says 'The CAPSA project is a good example of what can happen when an institution does not adopt a professional approach to managing a complex but essentially routine operation.' Much of the rest of his report is equally relevant to a project of this nature. Please let us not follow that path again.
This undertaking has almost exactly the characteristics of the Millennium Dome project. The funding model is identical: it is to be built with a mixture of the organization's and donated money, relying on attracting commercial lessees to repay the former. It is a building intended to provide a loosely specified mixture of non-profit and for-profit facilities, with some equally fluid plans for moving the debt balance between them in the event of shortfall.
The recent interview with the director of Cambridge Enterprise in Cambridge Network confirms that his view of the building is similar to that of Her Majesty's Government on the Millennium Dome. A quote like 'There will be meeting areas, restaurant facilities, and a large conference space, all designed to encourage meeting and mingling. It will be like a continuous networking event' could have straight from Government publicity.
Even the problem of access is similar. Parking space on the West Cambridge Site is increasingly restricted, by Planning Authority policy, by University policy, and by the reclaiming of parking space for buildings. It is not an easy or quick place to get to from the railway station, even by taxi, but is very close to the M11. Quoting the same article 'We would like the new building to be the enterprise hub for this region, and not just for university spin-outs' makes it clear that there will be massive consequences for access methods and parking facilities, but there is nothing on that aspect in this Report.
How likely is it that venture capitalists, accountants, commercial lawyers, bankers, and their clients will rush to rent such accommodation? And how likely are they to do so for dealing with other organizations, if they cannot even guarantee parking spaces for their senior executives or clients? Another article in Cambridge Network entitled 'Growing marketing company in search for Cambridge offices' says 'Car parking and space for client meetings were also cited by Dansie as being strong criteria.' Companies might just rent without car parking today, but what about tomorrow?
People will also remember the fate of prestige office tower blocks built in London and other major cities during periods of severe accommodation shortage; many of them were unlettable by the time they were completed. If the University were to hit a severe financial crisis, and had to cut back on research, the attractiveness of the building and hence the income would vanish. The University would then have to bear most of the cost while riding out a financial crisis.
Section 15 does not make me any happier, because I doubt that many companies will sign contracts for 30 years for a rent increasing with the lending rate, or even that we could guarantee their viability over that timescale. The income of the café/restaurant will also depend directly on the spending power of the University employees and students who work on the site, as it is very unlikely that it would attract many people from Cambridge.
I am also concerned that the incidental costs to the University have not been mentioned. For example, the safety and security problems caused by allowing public access to the West Cambridge Site will impact many of the current Departments. Some, such as Physics, will need significant rebuilding works to ensure that children are isolated from dangerous areas.
Before the University spends any money on architects or even proposes a Grace, it should prepare a precise, costed business plan and risk assessment and place that before the University. These plans should be reviewed by some independent accountants, nominated by a body that is genuinely independent of Council and Cambridge Enterprise - I suggest the Board of Scrutiny, this being a scrutineering activity. I stress the need for independence, for reasons that CAPSA should have taught us.
While this Report is not about Cambridge Enterprise, a failure of that could cause serious problems for the building. The Board of Scrutiny should also be authorized to commission either or both of some independent venture capitalists and universities with a good track record in this area to report on Cambridge Enterprise's business plan, with a view to risk assessment and suggestions for improvement. This would be money well invested.
In both cases, placing the reviews before the University would allay the fears that both projects could become major drains on resources rather than sources of income. However, the main purpose of such reviews would be to ensure that the projects are, indeed, on a sound commercial footing and to maximize their chances of success.
Dr D. A. GALLETLY:
Madam Deputy Vice-Chancellor, the Reporter of 11 June announces, at one fell swoop, the creation of Cambridge Enterprise (in a Notice) and plans for a building to house it and others (in the Report currently under discussion). One might suggest that the haste to build premises for this new organization is somewhat unseemly, were one not to have deduced from the Council's minutes of their meeting on 24 February1 that a draft version of the Notice has been many months in the preparation. I also note, in passing, that the comments made at the Discussion of 28 January were considered by the Council at the same meeting; a reply was promised but has thus far failed to appear in the Reporter. I assume that this was a one-off oversight.
There are, however, matters of more serious concern here. The minutes of the Council's 24 February meeting say: 'Reference was also made to the need for any Notice published not to give an inappropriate impression of University policy about intellectual property matters. The future operation of Cambridge Enterprise in respect of IP was a sensitive matter.' while this Notice says: 'The University has already taken significant steps in the development of a number of the individual components for a system to apply its knowledge based across a wide range of academic disciplines.' Is the use of 'its' (meaning 'the University's') in reference to the knowledge really displaying much sensitivity towards the delicate matter of IP ownership, or is it in fact a hint that the University's threatened land-grab of IP rights is already a fait accompli? Are the Council merely awaiting an appropriate moment before they spring this unwelcome news on an already-suspecting Regent House?
Returning to the 24 February minutes: 'The Council agreed that the Notice as submitted was in some respects unsatisfactory, in particular in that it endorsed an inappropriate definition of the benefits of science to society derived from a government document.' Reading the passage derived from a government document that appears in the current Notice: 'Together, the generation and exploitation of science enable us to do more and to do it better: to deliver economic growth and enrich the quality of life, to widen choices for industry and individuals and improve the way we meet our current and future needs. ... Success in innovation can in turn provide the motivation for focused research, attract talented people and inspire public confidence in science and technology as well as providing the extra value added which can resource future increases in scientific research and business R&D.' I shudder to think how inappropriate the original passage must have been. The comment as it stands holds out little hope for blue-skies researchers; only 'focused research' of immediate commercial interest appears to be worth spending time on. I am reminded of Aldous Huxley's lament, as he posits a possible third way between primitive savagery and a perfectly controlled world of scientific exactitude, in his 1946 Foreword to his Brave New World: 'Science and technology would be used as though, like the Sabbath, they had been made for man not [...] as though man were to be enslaved and adapted to them'. The University appears to be skating perilously close to being 'enslaved and adapted' by science and technology, in the form of industrial concerns and governmental pressure.
But enough of Cambridge Enterprise and its possible motivations. Let me turn my attention now to the Report regarding the construction of the East Forum on the West Cambridge site. Reading through the Report, I have many misgivings about the financing and viability of this project. The building works are projected to cost approximately £21.5m; presumably this is a conservative estimate. Of this, £8m is to come from a named benefactor. This sounds helpful, although one begins to worry when one reads the minutes of the Finance Committee's meeting of 30 April2 'A single donor has promised £8m toward the cost of this building, on the understanding that a pro rata proportion of the space (almost 40%) be used in a way consistent with his wishes.' But what is left unsaid is perhaps more telling than what is said; the 'wishes' of this benefactor are not stated, although paragraph 11 of the Report seeks to reassure us that the conditions will not be detrimental to the University. Still, it would be better were the details of the 'wishes' to be made more explicit, as they are something that the Regent House needs to be aware of before they can make a rational decision about a project for which this benefactor is currently the major funding source, particularly given that the Finance Committee's minutes continue: 'There is not yet a full business plan for the building, and the financial analysis has not yet demonstrated the commercial viability of the project.' Other speakers this afternoon will no doubt detail the other misgivings I have over the financial uncertainties of the project, so I shall address myself now to another matter that concerns me about this Report and the proposed new building.
'The concept is of a building which reflects the enterprise process itself, being exciting and unpredictable.' So says paragraph 6 of the Report. This statement is at once both pitiful and hilarious. Pitiful because it suggests that the Council have become so enamoured of hype that they now believe that sentences which might be deemed appropriate for a press release should be used in a serious Report to the Regent House on possible future strategies. Academics do not need to be told how to think; they do not need to be 'sold' on an idea by imaginative and creative wording. They need facts, clear ones, so that they can make the right decision.
However, I also find that sentence in paragraph 6 hilarious. An 'exciting and unpredictable building' sounds like every structural engineer's worst nightmare. One has visions of various unpredictable, or at least unpredicted, structures of the past. Perhaps we would like something like the John Hancock Tower in Boston, with its falling windows, its excessive vibrations, and its potential for collapse which had hastily to be protected against? Closer to home, we have the Ferrybridge disaster and, less catastrophically, the Millennium Bridge; we all know what happened there. Dare one also mention the new Trinity Library?
I bring up these disasters not to spread doom and gloom, but to suggest that excitement and unpredictability may not be the ideal qualities one should desire in a building. On a lesser scale, many University buildings in Cambridge, and elsewhere in Britain, already are quite unpredictable enough to infuriate their unfortunate inhabitants. Malfunctioning temperature control systems appear to be the norm rather than the exception; whether it be that they are programmed to work only between the hours of 9 and 5 in areas where the computers are on all day and night, or whether it be that they have a fondness for leaking such that large quantities of water descend at irregular intervals upon the person and possessions of a hapless researcher. Lights which switch on when motion is detected in an area, such as can be found in the new Betty and Gordon Moore Library, might at first be thought to be a wonderful innovation, but when one discovers that they switch off after a short interval leaving a researcher trapped in the stacks without light they start to seem less ideal. There are many other unfortunate cases in Cambridge.
However, the most egregious example of an 'unpredictable' building I have heard tell of is not here, but in Nottingham. A friend described it thus3 'We have motorised Venetian blinds in our office. We press a button and they go up and down. Or, as is happening at the moment, they just go up and down on their own. We have awnings too which come out like shop-front awnings when it's sunny, to shield us from the light. Except they come out when it's dark, and go in when it's sunny. And our lights are operated by PIR without manual over-ride which means that we have to place bin bags over them whenever we need to do photography. Apparently we could get active IR sensors with TV-remote style zappers to over-ride, but they are too expensive. We suggested light switches but were looked at as if Luddites. We have fire doors controlled by electromagnets without manual over-ride which have been misconfigured in subtle ways so as to trap people in the building in the event of a fire. We have automatically released doors in the event of a fire alarm which randomly release themselves during the day. Now the whole of the opposite wing's Venetian blinds are ascending and descending in perfect synchrony.' He concluded by saying 'I'm OK with intelligent buildings, I'm OK with non-sentient buildings. I have serious reservations about stupid buildings.'
Of course this might not be the sort of unpredictability the Council were thinking about when they made that remark. Perhaps they were considering something more like the Blur Building4 which was a media building designed for the Swiss Expo 2002. 'Using various forms of water - mist, dew, fog, and drinking water - as the substance of its architecture, this unpredictable building expands and produces long fog trails in high winds, rolls outward at cooler temperatures, and moves up or down depending on air temperatures. With computers adjusting the strength of the spray according to shifting climactic conditions of temperature, humidity, wind speed and direction, the resulting fog mass literally changes from minute to minute in a continuous dynamic display of natural vs. human-made forces.' A caveat was sounded, however: 'Doubting that the Blur Building would work well as an office because of the high humidity, Professor Mary Hancock, course chair of a Master's degree in energy-efficient building at Oxford Brookes University, said constructs like the Blur might be very refreshing in the street or in a park.' But has high humidity, or other climatic infelicity, stopped any other recent Cambridge building project?
Finally, a possibly slightly more serious suggestion. It is recommended in the Report that parts of the building be used as incubator units for fledgling companies. In the case of these, it is possible that 'unpredictability' might be a positive point if it leaves the areas easily reconfigurable in the event of a sudden change of use being required. To this end, it might be desirable to use temporary and/or deployable components in at least part of the construction. This would help to reflect the potential 'here today, gone tomorrow' nature of the enterprise culture, particularly as applied to small businesses in the current economic climate.
Professor I. M. LESLIE (read by Mrs S. BOWRING):
Deputy Vice-Chancellor, I would like to read out a statement on behalf of the Computer Science Syndicate.
The Computer Science Syndicate notes with some concern that the Report contains no mention of site facilities in the East Forum, other than the relocation of existing catering. When the Computer Laboratory moved to West Cambridge it was advised that the East Forum would include not only catering facilities but shops available to the whole West Cambridge Site. Indeed the West Cambridge Site web site still says as much.1
The Syndicate notes that academic and assistant staff, Research Associates, and Ph.D. students all regularly bemoan the lack of facilities at West Cambridge. Amongst the facilities which have been requested are a bank, a bookshop, a pharmacy, a post office, a newsagents, and somewhere to buy food that is cheaper than that provided at the existing catering facilities. While it is inconceivable that West Cambridge can support all these, the provision of something as simple as a convenience store and an Automatic Teller Machine would improve the quality of life for inhabitants of West Cambridge enormously and would also improve the desirability of the residences now under construction.
The Syndicate strongly urges the Council to consider the issue of shops in the East Forum in any further development of the proposal.
Dr R. J. ANDERSON (read by Mrs S. BOWRING):
Madam Deputy Vice-Chancellor, Regents will have noticed that although I am a member of Council, I did not sign the Report on the East Forum.
The East Forum project is part of the larger plan for the University to make money by harvesting our intellectual property. RSD's Technology Transfer Office will mutate into 'Cambridge Enterprise' which will become the key University tenant of this grand new building, while Dr Herman Hauser's venture capital company will become the key private sector tenant.
Before I move on to specific problems with the building project, it is perhaps useful to set it in context.
For many years, Cambridge academics owned the ideas we produced. With a few narrow exceptions, the copyright and patent rights to Cambridge inventions and creations belonged to their inventors and their creators. This led to the 'Cambridge phemonenon', the large number of high-tech companies which have contributed so much to local economic life. However, following the creation of the Research Services Division in March 2000, the policy direction changed. The Director of RSD has promoted a so-called 'entrepreneurship agenda' according to which the entrepreneurial efforts of academics will be harnessed and directed through his department, with a view to maximizing University income. This has been tried in a number of US universities over the last twenty years, and the overwhelming preponderance of economic evidence is that it harms entrepreneurship rather than helping it. In many if not most cases it also loses the university money. Here in the UK, the second edition of the Segal-Quince-Wicksteed report on the Cambridge Phenomenon remarked that IP changes have already made it more difficult for academics to drive the creation of spin-out companies.
The first major step in implementing RSD's 'entrepreneurship agenda' was the policy on intellectual property that sneaked through in March 2001 and took effect from October that year. Under that policy, the University asserts ownership of the intellectual property from all externally funded research, rather than simply the patent rights of research funded by the UK government as had been the case in the past. This went unchallenged and largely unremarked at the time. However, recent attempts at enforcement have had serious consequences for University income. Companies wishing to sponsor research here are now told that they must pay the full cost, including overheads, but let the University keep the intellectual property rights. Furthermore, they must grant the University a royalty-free licence on any relevant background intellectual property of their own. This has led to a number of sponsors simply walking away, while in many other cases companies have had to engage in lengthy negotiations to get an acceptable deal. This has created considerable resistance within the University, especially in science and technology Departments, and the draft contract was removed from RSD's website for a while. However, RSD successfully stonewalled demands for more reasonable contract options, and recently an even more unacceptable contract has reappeared on their website.
We earn over £130m a year from research contracts but only £1.7m from intellectual property. No figures are available on the value of research contracts lost by RSD's aggressive approach to intellectual property, but they include at least one multimillion pound deal, and it is prudent to assume that our losses run to several million a year. Our research grant and contract income is down by six million on the original estimate for 2002-03, and while not all of this can be ascribed to RSD obstinacy on intellectual property, some of it certainly can be. I will elaborate further on this shortly in the Discussion on the Allocations Report. For present purposes, I merely wish to remind Regents not to think of Cambridge Enterprise as an operation that makes us over a million a year, but as an operation that loses us several million a year. The Director of RSD apparently considers this loss worthwhile because of the off-chance that we might get a patent that will yield big money sometime in the distant future. The economic evidence suggests strongly that this is a poor investment and in any case it is inconsistent with our investment policy. Also, valuable university patents are almost invariably medical ones, like our own Campath. Yet RSD's draconian patent provisions are being imposed on non-medical science and technology departments too, at a substantial cost in research income.
I have made this short digression into the 2001 policy and its effects in order to highlight the nature of the beast with which we are dealing, and its effects on the University's finances. There are effects on freedom that are at least as pernicious. I would direct the House's attention to the recent Royal Society report on intellectual property policy, chaired by our late Pro-Vice-Chancellor Roger Needham, and to the Web pages of the Campaign for Cambridge Freedoms. Many of these issues were canvassed in this House on 15 and 22 October last year.
Madam Deputy Vice-Chancellor, at this juncture I would like to register a procedural point. The Cornish committee that was set up following that Discussion has apparently sent its report to the Director of RSD; no doubt those of us who are on the other side of the debate will get to see it sometime this summer. We have also been promised a report on Cambridge Enterprise, but that has not been forthcoming either. We are now invited to bless Cambridge Enterprise, and with it the so-called 'entrepreneurship agenda', before we have seen either document. This strikes me as a textbook example of how the Unified Administrative Service can control the flow of business through our committee system. It raises governance issues to which I am sure we shall have to return.
Turning now to the proposed building, we all know that Dr Hauser of Amadeus Capital Partners, the main private sector tenant, has been very active with the Director of Research Services in promoting this so-called 'entrepreneurship agenda' in the press and elsewhere. Although we are assured that Amadeus will not have any legal advantage over its competitors when it comes to access to Cambridge IP, we must also think about the advantage it will have as a matter of fact. If Amadeus is the main tenant in the Cambridge Enterprise building, then given its founder's close relationshiop with RSD, and his founder's position on our Ventures Board, Amadeus will be in pole position when competing to finance academics' ideas. We have to ask ourselves whether a more level playing field might be in the interests both of academics and of the University as a corporate body.
I also understand that the proposed gift from Dr Hauser's charitable foundation to finance some 37% of the building comes with a long string attached - namely, that a similar proportion of the building must be used in accordance with his wishes. It is regrettable that this is not made clear in the Council's Report. Its effect is that should Cambridge Enterprise fail, or this House decide to abolish it, we could not simply recycle the building for academic purposes by moving in Materials Science or Chemical Engineering. The covenant from the donor would remain, and we do not know what obligations it will impose. Presumably it will require that this space be used for enterprise-related purposes. Given the increasing disillusionment of universities worldwide with technology transfer operations that were supposed to make money but instead lose it, this could be a significant future burden.
I would like now to look at the finances of the building in more detail. The plans that I first saw for the building assumed that the bulk of the funding, over £11m, would be a 'loan' that would be repaid on a capital and interest basis over 30 years at 3.4%, on the assumption that the commercial space could be let on 15-year leases with five-yearly upward-only rent reviews. To this I raised a number of objections, which are still not dealt with satisfactorily in the Report before us.
First, the commercial space is supposed to be used for business start-ups, and such firms are neither able nor willing to sign 15-year leases; Trinity College made a lot of money from observing that start-ups want to rent space by the month. Others have followed them.
Second, that there is at present no realistic prospect of repeating Trinity's success in West Cambridge. There is now a large oversupply of business incubator space in the region, and it may be many years before anyone makes their fortune from providing more of it.
Third, it is policy that University investment in buildings should yield a return of 6% where the building might eventually be sold, and 9% where it cannot be. Because the East Forum contains important communal facilities for West Cambridge, I believe it should meet the 9% test. However, even under the most charitable assumptions it does not seem to meet even the 6% test, and under realistic assumptions it is not at all clear that we will get the 3.4% that is hoped for.
An academic building would not be funded under such circumstances. Departments needing new accommodation have to raise all, or nearly all, of the money externally. They then still face space charges under the RAM. Yet we are told that Cambridge Enterprise will not have to pay rent, and are asked to believe that this will lessen the likelihood that it will adopt an aggressive negotiating stance towards university academics over IP.
Madam Deputy Vice-Chancellor, I find this logic breathtaking. We are setting up a business - it is proposed after all that Cambridge Enterprise should grow into a syndic, like UCLES or the University Press - and its business will be to farm our intellectual property. If it were really in the broader interests of the University for such a business to exist, then logically it should be set up on a lean budget and run aggressively. That would mean housing it in substandard city-centre space, of which we have no shortage, and setting tough revenue and profit targets, with a mechanism to shut it down and sack all the staff if these targets are missed even once. That is how one sets up businesses. Instead, a large cohort of bureaucrats and overpaid IP lawyers, whose very existence is resented by much of the university, is to be housed in a gin palace in a field out by the motorway, and to receive a generous rent subsidy in the hope that they will not take the conduct of their business too seriously.
I am edging toward the view that perhaps the only way to resolve the IP issue will be for this House to enact a Grace to abolish Cambridge Enterprise and sack all its staff. This may have to be done in the teeth of opposition from the administration. I am not proposing such a Grace right now - I am happy to wait for the Cornish report and see if any better proposals come forward. But supporting this building proposal will make it very much harder for us to undo the terrible so-called 'entrepreneurship agenda' that the outgoing administration has promoted so hard and at such cost in money, in trust, and in goodwill.
There are many other issues raised by this building proposal. Moving the catering facilities, currently at 'West', into the new building will cost money. Yet our catering services regularly overshoot their budgets. How much more subsidy will the move entail?
I am sure that other speakers will raise other specific objections. Let me now wrap up by reminding the House of the overall financial position of the University.
Regents will be aware that we have been losing money for years. I will have more to say on the income and expenditure aspects of this later in the Discussion on the Allocations report. Here, I would like to touch briefly on the balance sheet aspects.
Years ago, we had a lot of money and a lot of old buildings. Now, we have a lot of old buildings and a lot of new buildings. But how much cash do we have?
The sad fact is that we no longer have significant Chest capital. We are not about to go bankrupt - we have valuable assets such as UCLES and the University Press. But selling them would be a major strategic decision and market conditions are not at present attractive.
We will shortly have to develop a policy on borrowing to fund new premises. Should we require academic Departments to raise all the finance for new buildings before we start, and if not, how do we build the cost of borrowings into space charges under the RAM? Should we move from a system of space charges to a system of rents? There are many complex issues here, which other universities have had to deal with but we have not. The systems that we come up with will have to be transparent, and must not introduce perverse incentives. The proposed East Forum would be a very poor sally into these waters. The financing is at present anything but transparent, there is the risk of significant perverse incentives, and there is a massive externality: that going ahead with this building could make it very difficult indeed to kill the so-called 'enterprise agenda', which has cost us all so much.
Madam Deputy Vice-Chancellor, this proposal invites us to borrow over £13m and invest it in a project that is losing us millions of pounds a year. The likely effect of the investment will be to increase the loss. It will also exacerbate the threat that the so-called 'entrepreneurship agenda' poses to academic freedom and to our other core values. It is an offer this House must resist.
Dr M. R. CLARK:
Deputy Vice-Chancellor, I would first like to take the opportunity to congratulate the Council on the style, and particularly on the clarity of this Report. However, upon reading the details I do have serious concerns about the value to the University of the current proposal.
As indicated in paragraph 4 of the Report, the building seems to sit, somewhat uncomfortably in my view, between being a commercial venture of the University, and of being a building to provide certain support services to the University. Of major concern is the proposal for the University to take a financial risk on about £11-13m in order to provide a facility costing an estimated £21.51m, and at a time when numerous recent announcements, and policy statements, have indicated that the University is currently facing a financial crisis in its income versus its expenditure. It is not clear from the Report that the Council have sought a properly costed risk assessment from an independent expert, and to me the proposal to recoup much of the financial investment by the University at an interest rate of 6% over 20 years seems somewhat over optimistic. With such a large sum of money at risk, and embarked upon without suitable external professional advice having been taken, it seems to me that this has the distinct potential of becoming another CAPSA type of fiasco.
We learn that this building is to provide a social focus for the West Cambridge Site in the form of catering facilities and meeting rooms in the lower ground floor. The facility whilst being aimed at University staff of Departments on the site is to be open to members of the public. Presumably this means that the University intends to allow and even to encourage open public access to the West Cambridge Site? Does this also include provision of public parking facilities? Also have the safety and security implications been taken into account and will there be any age restrictions, e.g. will unaccompanied children and teenagers be encouraged to visit and use the facilities on this site, which are of course adjacent to a public footpath and cyclepath? Will the catering facilities be open at weekends and in the evenings? Regarding use of the meeting and seminar rooms is there to be a single charge structure for hiring by both the University staff and by the commercial tenants of the East Forum, or will University staff be charged at lower rates? Also how will the catering and meeting room facilities impact on provision and use of facilities already provided within Departments located on the site?
Perhaps the major aspect of this Report is the clear link with new disclosures of intentions on IPR policy, as disclosed by the Notice announcing Cambridge Enterprise (Council's Notice on p. 1007 of the Reporter of 11 June 2003), and the inclusion of further details about Cambridge Enterprise in the East Forum Report. We are told that Cambridge Enterprise has been formed by merging a number of existing offices within the University from units within the Cambridge Entrepreneurship Centre and from sections of the Research Services Division. Clearly the intention is to relocate these services to the new building and this has obvious implications for the calculations of the recovery of costs on the space they currently occupy. The Board of Scrutiny in their Seventh Report, under the section entitled The Expanding Estate (Reporter, 7 August 2002) have previously highlighted the implications for the University when expanding or relocating existing Departments into new buildings without considering how costs are to be recovered on the space within vacated buildings that still have to be maintained and serviced. Have these indirect cost implications been taken into account in preparing the Report?
Interestingly paragraph 7, p. 1029, of the Report tells us that 'Cambridge Enterprise is currently part of the Research Services Division of the Unified Administrative Service' leaving a strong hint that this situation is likely to change in the future. We are also told in the accompanying Notice, page 1008, that 'Funding for the new organization will come from existing budgetary provision and Cambridge Enterprise will follow the practice of CUTS in charging for its services to cover its own costs.' It would seem from the Report that what is happening is that the Council are immediately loading Cambridge Enterprise with additional cost implications through relocation into an expensive new building, and that this will impose an additional level of costs that will need to be recovered through increased charges for services provided by Cambridge Enterprise to members of the University. This would seem to have relevant consequences for the proposals on IPR policy and the clause for distribution of income 'after deduction of agreed costs' (Joint Report of the Council and the General Board on the ownership of intellectual property rights, Reporter, 24 July 2002), costs which now seem to form a more open-ended commitment as implied by the current Report on the East Forum. For example, in paragraph 15 subsection (4) of the Report, we learn that Council expect to underwrite risks associated with financing the costs of the new building from revenue received by CUTS Ltd. Also I note that the Council state 'In the future it will aim to make a small surplus each year, to be used for investment in areas such as expanding patenting or providing 'proof of concept' grants.' (Reporter, 11 June 2003, p. 1008) so implying that currently Cambridge Enterprise is running at a loss to the University despite reported income through CUTS of millions of pounds per year, and that the projections are that any future surplus income will be small and directed back into further technology transfer ventures rather than used in helping to support the basic research and teaching activities of the University. I have serious concerns over whether the formation of Cambridge Enterprise is a good idea, but even if it is accepted as a worthwhile administrative exercise I don't think that this requires that it be housed in an expensive new office complex at West Cambridge, rather than in existing buildings of the University. There seems to be a fundamental flaw in the logic of the Council that the best way to improve technology transfer is to provide fancy and expensive offices for the administration, rather than putting money into supporting the research that leads to the technology to be transferred? This seems to be an exercise designed to create an even bigger gap of resentment between the academic research Departments and sections of the administration. At the same time as informing research Departments of the University that they must cut back on their expenditure, and in the case of my own Department this means that we are told by my Head of Department that we do not have adequate provision of funds, to service, repair, or replace, our core research equipment and services, we see that the Council's priority for administration is to give them expensive and fancy offices in which they can entertain their corporate and academic guests in a pleasant social atmosphere.
It seems pertinent at this point to refer to the Department of Plant Sciences and the lack of provision they have had in the past for their research facilities.
Or taking a more cynical view the main purpose of the East Forum proposal perhaps is a publicity stunt to convince certain critical Government Ministers that Cambridge University is adopting their advice and targets, even if this results in us incurring even greater financial losses in the process.
A significant percentage, 46%, of the area of the new building, 6,850 sq metres, is to be occupied by commercial tenants, amounting to an estimated 3,151 sq metres. Yet we are told that a single tenant, Amadeus Capital Partners Ltd will occupy, 35% to 40%, i.e. about 1,260 sq metres, leaving an estimate of just 1,890 sq metres available for all the other commercial tenants comprising (according to paragraph 4) 'venture capital firms. accountants, lawyers, banks, and regional agencies'. I cannot help but think that it is unlikely that the allocated space will be adequate to attract multiple examples of each of these, and thus inevitably the University is creating an on-site environment short of local competition. Of course, in practice Cambridge is not short of such firms, most of whom have local offices within the many present business and science parks located around the Cambridge area. Which brings me to another conclusion, based on many years of personal interactions with commercial services such as those provided by patent agents and lawyers, which is that there is more than adequate provision already, much within the local Cambridge area, without the need for the University to go into competition in offering commercial office space. Why do we need to risk our own finances to compete with existing and adequate local commercial office space? Perhaps if the University had established such a commercial venture some years ago, and at the same time as several Colleges were establishing their own business parks, the conditions would have been right, but I very much doubt given the current economic climate that the situation is now favourable.
A similar argument applies to the proposed incubator space within the East Forum. This is only of very limited value to certain restricted types of spin out companies because no workshop or laboratory provision is made within the proposed space, only simple office type space is to be available. Given the many science and innovation parks within the area, and the current economic climate where major companies, e.g. in the biotech sector companies such as Xenova, CAT, and Millennium Pharmaceuticals, are downsizing, or withdrawing, there is now considerable competition on provision of lettable incubator space, and with full facilities. Again is this the right time for the University to risk funds in this type of commercial venture?
As far as I can tell Cambridge Enterprise has been set up as a service to the entire University, yet if it is located within the East Forum, access to it will only be convenient for those Departments present on the West Cambridge Site. For the many other Departments located in the centre of the city and out at the New Addenbrooke's Site, West Cambridge is hardly a convenient location to visit on an ad hoc basis for a cup of coffee and the chance to rub shoulders with venture capitalists, lawyers, and accountants. At present a considerable proportion of the income generated through CUTS arises out of work from Departments in the centre of Cambridge yet the convenience of a central location is now to be sacrificed. Thus on geographical grounds this new facility does not appear to represent such good value, and convenience for a large section of the University.
We are told in the Report, paragraph 12, that 'no non-University tenant will have privileged access to University IP' and 'Conversely, University start-ups and spin outs will not have an obligation to use services provided by non-University tenants'. But who has the legal rights to exercise these privileges? If the University enacts a new IPR policy and exercises a right of ownership over IP generated within the University isn't it Cambridge Enterprise that de facto will have the legal right to decide who gets access to the IP. What legal rights will the University inventors have to decide over whether commercial entities within the East Forum get access to their ideas and inventions? Despite what the Report claims, the operational privileged access to IP is part of the reasons why any company would choose to base itself within the East Forum, even if any legal right of privilege is denied.
As currently laid out within the Report I cannot support the Council's proposals for the East Forum and unless more compelling economic arguments were put forward, supported by external expert review, I would have to non placet a Grace on this proposal.
Dr O. RACKHAM:
Deputy Vice-Chancellor, the pompous and obscure pseudo-legalese of this Report hides the purpose of this great building. The West Cambridge Site no doubt could do with a million and a half's worth of canteen. But why, in language that we can understand, do the other users need an acre and a half of floor space, let alone a pond and a canal? Who will pay for its running costs, maintenance, and restoration in thirty years from now? Where is the business plan? As described at present it has too much in common with that mysterious University project, with its inscrutable purpose and unexplained economics, now rising across Senate-House Yard from where we sit.
Before expecting the Regent House to approve yet another costly project, can the promoters please spell out in plain English what is to go on in this palace and why the University should be using its precious space for non-University tenants? In particular, since intellectual property rears its head, how is the building dependent on the outcome of the debate about ownership of intellectual property created by University personnel, on which so many strong and convergent views were expressed in this House three terms ago?
Professor G. R. EVANS (read by Dr D. R. DE LACEY):
Madam Deputy Vice-Chancellor, I thought we had a committee looking at Risk Management? 'The concept is of a building which reflects the enterprise process itself, being exciting and unpredictable' (p. 1029). Remove 'exciting' from that sentence and it becomes somewhat scary. 'The Council recognize that this project involves a number of risks' (p. 1030). They seem pretty enormous to me, and we can be sure they will breed further risks. The list is not going to grow shorter if we go ahead with this.
Reporter, p. 1006, list of Reports for Discussion today includes four new building projects to add to our £500m plus of existing commitments with still, as far as I can discover, no real advances as yet towards establishing a clear picture of the way our buildings are to be maintained and at what cost, still less balancing the work needed on our stock of old and very old buildings against the costs of these new ones. This is the most ambitious, and the one with the most enormous implications for the kind of University we shall be in the future.
Secondly, I would like to set this Report in its context of other public assertions recently made on its theme. Readers of this speech may like to inspect on the Web: http://www.cambridgenetwork.co.uk/pooled/articles/BF_NEWSART/view.asp?Q=BF_63368. There Mr Hiscocks is represented as 'masterminding the newlook entrepreneurial side to the University' as 'director of the new Cambridge Enterprise'. Perhaps he had not got up to speed with the 'talking to the Press' leaflet helpfully sent round with the current Newsletter and the journalist has misrepresented him, but the Cambridge Network, which the current Vice-Chancellor chairs, has put this proudly up on its website. May we have some comment on the assertions made in this article in theNotice in reply to this Discussion?
Next, I suggest a reading of Reporter, p. 1007, Establishment of Cambridge Enterprise: Notice, alongside the Minutes of the Council on February 24 (we are still waiting for more recent episodes, Registrary). 'The Council agreed that the Notice as submitted was in some respects unsatisfactory, in particular in that it endorsed an inappropriate definition of the benefits of science to society derived from a government document'. May we know in the Notice in reply whether and in what respects this was amended or is this 'unsatisfactory' definition being put before us in the published Notice on p. 1007 ?
With these highly relevant points in mind, I turn now to the Report of the Council on a proposal for a new building at West Cambridge to be known as the East Forum (Reporter, p. 1029), first to make the point that the contents of that Notice, or some of them, should surely have formed part of this Report? Just put together all the references to the Research Services Division in the two documents. The Director of Research Services ought to be answering some questions, in a newsgroup and some open meetings, and then in the Senate-House, before this goes any further.
How many of the University's academics really wish to be dragged down this 'enterprise' road, with their intellectual property rights still up for grabs, and their freedom to determine their own research plans overridden by research strategy initiatives and, as is frankly admitted (p. 1032), the 'risk of incentivizing Cambridge Enterprise to adopt inappropriate negotiating stances with university academics in relation to spin-outs and, in particular, to focus on short-term incentives to cover costs rather than focusing on long-term benefits to strategic inititatives of the University'?
This proposal is simply another financially dangerous and imperfectly thought-through attempt to turn the University into a business with a business culture and control of its academics' ideas, surely? Notice the faces photographed with the outgoing Vice-Chancellor in the equivocal valedictory article in CAM. 'Business Week' and 'Cambridge Phenomenon' faces every one of them. I hope our new Vice-Chancellor will have read Chris Patten's speech as Oxford's new Chancellor (Gazette, p. 1497), in which he stressed 'the value of the university as the guardian, champion, and disseminator of Enlightenment values' and the need to 'beware the tendency to define the role of Universities solely in terms of the contribution higher education makes to economic growth'.
Dr D. R. DE LACEY:
Madam Deputy Vice-Chancellor, in an earlier Discussion (http://www.admin.cam.ac.uk/reporter/2001-02/weekly/5893/19.html) I deplored the fact that the English Faculty Building was being torn down even as we gathered to Discuss whether we should replace it. The defence was that some five years earlier we had graced the demolition work (in fact, we graced the seeking of planning permission, not quite the same thing). One might have thought that the passage of time and our changed circumstances made it incumbent on the administration to do nothing before rather clearer approval from the Regent House.
Now again we are in danger of being forced to follow through a six-year-old plan in drastically changed circumstances, and approve spending over £20m on a building of dubious value to the academic goals of the University. It is welcome that this Report serves only to invite comment rather than to support the proposal: I hope though that the Council do not feel that a Discussion in the Long Vacation is adequate consultation. The suggestion of 'a start on site in late 2003' does not leave much time for real debate before the second Report.
'Exciting and unpredictable' buildings are surely the stuff of dreams. More specifically, the stuff of nightmares. We already have some good examples in Cambridge. I needed a firm pinch to persuade myself that I was reading a Report of the Council to the Regent House, and not the blurb from an over-enthusiastic estate agent.
What is the purpose of this extravaganza? The advantage of catering facilities is urged upon us (three times), yet these facilities boil down to the relocation of an exiting facility from its own attractive, if temporary, building. There are 'other' facilities too, but the Council is remarkably coy in spelling them out. The only obvious beneficiaries are that growing army of bureaucrats whose value in their Seventh Report the Board of Scrutiny has challenged the UAS to justify: a challenge apparently as yet unaccepted. There are disturbing reports on the Governance newsgroup about losses of income through RSD bureaucracy; will the provision of a £20m building guarantee an increase in their income-generation?
For this we are asked to accept donations with not strings but hawsers attached, and to put up from our own resources (or deficit) some £11m. Shall we really be able to extract a realistic rent from all tenants, if as the Finance Committee minutes state (http://www.admin.cam.ac.uk/cam-only/committee/council/minutes/ 20030430.html [sic]: a condition of a grant is a 40% stake in the use of the building? There is also a hint in the Notice on the establishment of Cambridge Enterprise that its income is expected to be derived from charging other parts of the University for its 'services'; a model akin to those indigent washerwomen eking out their precarious existence by taking in each other's laundry.
If this is what the Council regard as a robust Business Model, and if the constituent parts of Cambridge Enterprise have had any hand in developing it, then I fear for our entrepreneurial future nearly as much as I fear for our academic future.
Madam Deputy Vice-Chancellor at this point takes her leave. She is replaced by the Junior Proctor who takes the chair as Mr deputy Vice-Chancellor for the remainder of the Discussion.
Dr T. J. MEAD (REGISTRARY):
Mr deputy Vice-Chancellor, I would like to make one observation on the nature of this Report and then some specific comments to correct certain statements that were made in earlier remarks.
Firstly, this is a Report in principle. Members of the Regent House have raised many interesting questions about the project. It is unfortunately the case that many of those questions cannot be answered at this stage because without the fuller work this Report would authorize, the business plan, for example, cannot be completed in the way in which members of the Regent House have asked for. The Council have, following suggestions and discussions that the Treasurer and I had with the Board of Scrutiny, recently decided to move to a two-stage Report. I personally think that is a sensible way to proceed. The intention is to give members of the Regent House opportunity to consider the principles of proposals before costly work is undertaken to deal with the details. I hope members of the Regent House will bear that in mind when considering further Reports in principle. I would also commend to members of the Regent House the Treasurer's opening remarks which made explicit the extent of the commitments that will be entered into if this Report were subsequently to be approved by the University.
Secondly, I'd like to comment briefly on points that have been made about the Cornish Committee's report and the influence of the Unified Administrative Service over the conduct of business in the University. The Cornish Committee's report was submitted to the Research Policy Committee. It goes tomorrow to the General Board of the Faculties. It goes on 21 July to the Council. I expect it will then be published. I expect, as it recommends, it will then be the subject of a Discussion in the University in Michaelmas Term. Those facts were easily discoverable had Dr Anderson or anybody else asked me. As far as control of the business is concerned, the flow of the business by the Unified Administrative Service, that Service is under the supervision of the Council, and I would expect it to answer to the Council if there were concerns about the flow of business. I would invite Dr Anderson to raise those matters in the Council where we can properly debate them.
Report of the General Board, dated 28 May 2003, on the re-establishment of the Professorship of Metabolic Medicine (p. 1032).
No comments were made on this Report.
Report of the Faculty Board of Engineering, dated 12 May 2003, on the Engineering and Electrical and Information Sciences Triposes (p. 1033).
No comments were made on this Report.
Report of the Council, dated 16 June 2003, on the financial position of the Chest, recommending allocations for 2003-04 (p. 1074).
Mrs J. M. WOMACK (TREASURER):
Mr deputy Vice-Chancellor, last year, at the equivalent of today's Discussion, I tried to describe, in ten minutes, the reasons, both national and local, why the University's financial forecasts were looking so sad. I do not intend to repeat what I said last July. I would merely note that it remains as true this year as it was a year ago. By the time the 2002 Allocations Report was being discussed, the Council had already noted the establishment by its Planning and Resources Committee of the Finance Working Party, chaired by Professor Grant. That Working Party was set up as a response to papers on the University's financial position, which described a growing gap between income and expenditure and a growing call on the University's reserves to fund the consequential deficit. The Working Party reported to the PRC in the Lent Term and a summary of its report was published in Reporter on 12 March 2003. If I may quote from the Introduction to the full version:
'The University of Cambridge is the leading university in the UK and among the leading few of the world's greatest universities. Its teaching is excellent. Its research and staff and students are world-class. Research income and donations are buoyant. It repeatedly heads league tables. It has a strong and growing endowment. Its total income has risen by 12.5% [sic] on average in each of the last four financial years, which is a remarkable growth rate. All who work in the Collegiate University of Cambridge at every level can continue to be proud of its achievement.'
And yet, the University is in financial difficulties, struggling to pull itself out of a repeating pattern of operating deficits year after year.
The problems came on the University quite dramatically. In 1999 the operating surplus was £6.0m, in 2000 £12.1m. In 2001 there was a deficit of £9.8m. Last year the deficit was pulled back to £3.8m, with the help of a retrospective VAT refund of £3.7m (without that, the deficit would have been £7.5m). The Allocation Report focuses, of course, on the Chest; generally assuming that the non-Chest income and expenditure will break even. The position in 2003 is expected to be a deficit on the Chest of £8.4m and the Allocations Report which we are discussing today forecasts a further deficit of £5.1m for 2004, after a great deal of work to implement the urgent and immediate proposals of the Grant Committee. For the future, in response to pressure from their Finance Committee and endorsed by the PRC, the Council have set enormously challenging targets to bring the operating deficit down in each of the following three years, so that 2007 will show a break-even position.
How can this be done? What are the issues that need to be addressed? To quote the Grant Working Party once more:
'The University is a victim of its own success. It has not had the pressure for the good housekeeping that other universities take for granted, and matters have now caught up with us. There is no single explanation for the growing deficit any more that there is a single cure. Public funding of higher education is only one component. The University Council has [sic] accepted deficit financing for several years and has overspent in trying to support a wide range of academic developments without prioritising. Non-recurrent income has masked the true underlying position.'
One aspect which has become apparent is the failure to maintain adequate financial control over salaries. The Finance Working Party was struck by the dramatic increase in costs under this head, which is still going on, month by month and quarter by quarter, as shown in the regular management information which now goes to the Finance Committee. For example, in the nine months' figures to end April 2003, staff costs excluding contract research staff, had gone up 7.3% since the previous year. The position at the end of July will be worse, since the increased employer's National Insurance costs have now started to apply. That level of increase cannot be maintained. The Council have started to grasp this nettle, and paragraph 35 of the Allocations Report makes clear that allocations for promotions must be lived within and cannot be open-ended. This marks the end of an unwise policy which was forced on the University some years ago when a vote was called on the Allocations Report. The General Board and the Council need to apply the same rigour to staff costs generally. This will be made more difficult if the employer's contribution to the University Assistants' Pension Fund have to go up to meet a funding deficit. As indicated in the Report, the Council are waiting to receive the result of the 2003 actuarial evaluation, which will be available towards the end of next term.
The Grant Working Party report refers specifically to non-recurrent income. If we look closely at this issue we can begin to understand another aspect of the extremely complex funding puzzle. It is not the case that non-recurrent income (the most obvious example of which is the series of large VAT refunds which came in year after year in the late 1990s) was allocated to recurrent expenditure. VAT refunds were never used to pay salaries for example. But over a number of years items like maintenance and equipment were switched on and off, depending on how much non-recurrent income was achieved, and those managing budgets began to rely on the non-recurrent allocations as a regular source of income. For example, whilst we had originally believed that backlog maintenance could be funded in good years and would then cease to be a problem, the Director of the Estate Management and Building Service now tells us that the maintenance backlog is still there, and that a regular annual amount will be needed to deal with it. Similarly, we funded the new financial system out of operating revenue, hoping that, once that was completed, things would revert to normal. But it now seems that, for an organization of our size and complexity, 'normal' involves major expenditure on systems virtually every year. CUFS transmutes into CamSIS which will be followed by a new Personnel System and then a major upgrade to CUFS, and so on, with new Library systems thrown in for good measure. Similarly, if the University really wishes to manage its human resources more effectively, it will need to set money aside for restructuring on a regular basis. So, these types of expenditure must be budgeted for on a 'normal' rather than 'extraordinary' basis, and other areas of expenditure have to be cut back accordingly.
In this context I should warn the University about the use of SRIF-2 to support the budget in 2003-04 and 2004-05. It has been enormously helpful for the Council to be able to propose a contribution from SRIF-2 in each of those years towards estimated expenditure from the Chest on building maintenance, minor works, and equipment. There is a double benefit financially - first, it damps down the expansionary tendency of Departments and Faculties, which might otherwise plan to spend the entire SRIF-2 on completely new initiatives, and second it helps the overall position of the Chest. But, and this is a big 'But', if SRIF-2 is not followed by SRIF-3, our successors will be looking to take £9m out of the budget in 2005-06, by which time everyone will be used to expenditure at the higher, subsidized level. This is a major risk which must be borne in mind by those who take over responsibility for the University's budget.
And that, of course, means a very large number of people; the introduction of the RAM is intended to pass financial responsibility down to Schools and to those within Schools. One of the problems there has been in the past has been the absence of full financial responsibility at School level. The split between Chest and non-Chest has tended to mean that people have not understood the full financial significance of decisions relating to what were perceived as marginal cost items. Infrastructure costs have often been seen as someone else's problem. But the RAM means that they become your problem, whether at the School or institutional level or further down the system. That is why it is so important to stress the need for proper business planning for all activities, not just capital projects but also new courses, new appointments, and everything we do.
To run the University efficiently, we need to be able to use staff effectively, with retraining and reorganization if necessary. We need to get away from the concept of a fixed establishment at departmental level, so that staff are regarded much more generically and holistically. The same applies to space.
It is of course extremely difficult to make savings at the level of very small institutions. Only at School level can the overall picture be seen, and unnecessary hardships or inappropriate savings avoided.
Implementation of the RAM will devolve major responsibilities to the Councils and Chairs of the Schools for the strategic development of their Schools, and for operational planning, budgeting, monitoring, and control. It is not reasonable to expect academics to undertake such responsibilities without help. The Grant Finance Working Party identified the need for significant extra resource in Schools and in the centre, and a start has now been made with the recruitment of five new posts of School Finance Manager, to be embedded in School offices where they will provide value-adding financial skills. The Director of Finance is confident that they will quickly cover their costs. With their assistance, Schools will need to review their roles, and to identify where change is needed in order to embed responsibility and accountability at appropriate levels.
The RAM includes methods for allocating indirect costs to academic support services such as the University Library and for recharging central support services to Schools. A transparent approach to the full costing of overhead and central services needs to be developed, with recognition that efficiencies are necessary across the board, not just in academic Departments and Faculties.
It goes without saying that, as well as making savings, we also need to encourage the generation of new income. I hope that the Corporate Liaison Office will play a major part in supporting academics in this area, and that the work done by the Research Services Division to improve grant overhead recovery will be recognized.
In addition, work is going on within the Finance Division to deliver the Financial Model of the University within the next few months. The Transparency Review analysis of costing is moving forward. Work is being done to ensure better use of donation accounts and special funds and to bring unused Trust income into play.
The University's administrative infrastructure is unbelievably improved since I became Treasurer ten years ago. The tasks set out in the Finance Working Party and in the Allocations Report are hugely challenging. Five years ago they could not have been contemplated, but I do believe that the level of professional support now available and the enhanced information and understanding that staff are able to provide, are such as to give the academic community the hope that they will be able to meet these challenges over the next few years.
Professor G. R. EVANS (read by Dr D. R. DE LACEY):
Mr deputy Vice-Chancellor, I am glad to read of the plan to 'erode the division between Chest and non-Chest'. This 'division' has made possible for too long the complete obfuscation of our financial affairs. One hopes that the standard of clarity of expression will match the new openness about how much money we actually have and what we are spending it on. Expressions such as 'spending within the baseline' do not inspire confidence.
The proposals for 'study' this year to inform next year's Allocations' Report give cause for concern, because they appear to envisage the taking of decisions which must, please, first be referred to the Regent House. We shall expect to have some say in the 'prioritization of academic objectives'. The introduction of 'variable postgraduate fees' is not simply a matter of 'costing'; it is bound to become political, too, both internally and externally. As for the notion that we might 'widen adoption of procurement policy', I repeat, we are to bid farewell to two of our Principal Administrative Officers (Reporter, p. 1048), in September. One of them is the Treasurer. She has been entrusted by Grace with much of our procuring. Here again, there needs to be an overhaul of policy with full consultation of the Regent House.
These estimates are based on estimates (p. 1076). I am reminded that when TXU Energy took over our electricity supplies in this part of the country without a by-your-leave, they sent out estimated bills not even based on previous estimates (which they had mislaid) but on freehand unfounded guesswork about their new customers' normal patterns of consumption. They got my bill wrong by about 1000%. So, in this world of putative figures and conjuring with fictions, I am not at all clear how they can be so certain on the Council that 'increasing staff costs have been a major factor in creating the current financial deficits' (para. 35), so that the University's staff must wait still longer for deserved career advancements. There appears to be no provision at all for upgradings, only for the filling of vacancies. In proportion to our commitment to 'major capital works' of £500m (para. 40), and the huge projected growth in maintenance costs, that £0.9m to reward academic staff and nothing to reward others seems somewhat beggarly. And, despite para. 34's concession that the freeze was a bad idea, I am not sure this is in accord with the recommendations of the Finance Working Party (Reporter, p. 697), which seemed to be back-tracking on starving the staff.
Before the usual Notice going ahead regardless is drafted, may I point out that I AM objecting, strongly, to the limitation of the numbers of promotions and by implication of upgradings. This is a policy-change. We should have been asked whether we wanted this or more new buildings.
Lastly, those supplementary HEFCE grants 'which may be received for special purposes during 2003-04'. I am not happy for them to be handed over to the Council or the General Board to distribute, without further questions asked. May I ask that the fact of such awards be published in the Reporter and bids requested? Such consultation processes as take place at present appear to be patchy and chancy and I am not quite sure I trust the Council and the General Board to ensure that the money is used to best effect for a 'purpose consistent with any specification made by the HEFCE'. There is a bit of a history, on which I hope we can be told of the findings of HEFCE's investigation, but I will leave you with that cliff-hanger until next term, the arrival of the new Vice-Chancellor and the Brave New World (Shakespeare not Huxley please) we hope for when she comes. I am sure the new Vice-Chancellor is now reading the Reporter regularly, and catching up with back issues for the last seven years.
Dr D. R. DE LACEY:
Mr deputy Vice-Chancellor, I am the Computer Officer for the School of Arts and Humanities. At present I have no fully-functional computer, and whenever over the past few years I have asked the School for funds to replace my six-year-old machine I am told there is no money. I received the same response from an appeal to a higher authority; it is unclear where I can go next. Since the RAM was given as the reason, though it is not yet in place, I am simply puzzled at the comments in paragraph 11 of this Report. I share the misgivings expressed by the Board of Scrutiny in their Seventh Report (http://www.admin.cam.ac.uk/reporter/2001-02/weekly/5895/20.html); my case looks like a worked example of their worries.
In paragraph 34 another half million is to be thrown at CAPSA. Are the Council satisfied that this is the best use of this money? And (paragraph 37) £7.3m for CamSIS. How extensive and competent a team could we commission for that sum, to write a bespoke system which would avoid the nightmares the CamSIS technical SIG is currently experiencing? Again I ask, are Council satisfied that this is the best use of our monies?
A University which cannot afford to give its Computer Officers the equipment necessary to fulfil their contractual obligations surely cannot afford to spend £20m, or even half that sum, on a new building. What are our priorities?
Dr N. J. HOLMES:
Mr deputy Vice-Chancellor, a year ago I spoke at the Discussion of the Allocations Report for the present year. I opened my remarks by saying that the Report 'makes grave reading'. Despite the reduction in this year's deficit and that forecast for future years, I cannot help thinking the same about the present Report.
Last year I asked two questions which I believed to be very pertinent to understanding how we found ourselves with a forecast deficit of more than £10m. The first was to ask whether the University has had to fund cost overruns on any JIF or SRIF projects and if so whether the Council could tell us what the total of such cost had been to date. The Council replied to the Discussion promptly in a Notice, in which they stated that they were referring my comments to the Planning and Resources Committee and that they would give consideration to these matters in the light of the comments received. Nothing has been heard since. There is a hint in this Report. Paragraph 41 tells us that 'Over the last three years £206m has been spent on large capital projects and in total the construction costs have been within budget.' I am grateful for this information.
While we are on the subject of buildings, I have a couple of other points to make. In paragraph 34 the Report identifies £0.6m of other new needs including essential staff for the new buildings for the Faculty of English and the Institute of Criminology. I assume at least some part of this is going to be a new recurrent cost, staff are usually an on-going cost burden. I ask is this consonant with the Reports by which we approved the construction of these buildings? In the case of the English Faculty, we were told that the estimated running costs of the new building would amount to £110,000 a year. This was to come from letting income, increased fee income (estimated total £42,000 a year) and that 'The balance of the additional recurrent costs will be a charge against the Faculty under the RAM'.
For Criminology the running costs of the new building were estimated at £125,000 a year. However in this case the Report stated that 'The Council will take these costs into account when recommending allocations'. Perhaps these new needs are what was meant by all that. It is hard to judge that on the information given in this Report, not least because it is not apparent how much of the £600,000 is to be devoted to these purposes.
Actually I freely confess that I am struggling to make sense of the proposed chest expenditure recommended in this Report, particularly reconciling the figures on p. 1078 with paragraphs 34 and 35. To my eye, the costs of increasing the number of Pro-Vice-Chancellors, of new appointments in the Schools to implement the RAM, and of more staff for the UAS are all on-going costs (totalling at least £1.1m in 2003-04, excluding the English and Criminology staff). Yet the figure given for recurrent new needs is £0.5m. Perhaps some of these figures are subsumed in another heading, though why is not clear. Am I alone in finding this less than transparent?
Another concern is the identification only as 'Building 307' (Appendix 2, Table 2) of a capital project estimated to cost £25.1m. All the other building projects have clearly identified purposes. What is the point of this curious obfuscation? I am guessing here but isn't this the proposed new primate research facility at 307 Huntingdon Road? The University spent a great deal of money and effort urging a planning appeal, held in public last December, to grant planning permission for such a facility. This appeal was attended by many opponents of the plan who put their objections forcefully. It was widely reported in the media, both locally and nationally. We even had to endure the spectacle of a protester against this facility walking alongside our Chancellor on honorary degree day last month. So what is the point of this euphemistic concealment? In my opinion whoever is responsible for this needs to get a grip on reality. The University's opponents on this issue probably know far more about this facility than the vast majority of the Regent House, who were supposedly finally responsible for the decision to build it. At the time of the original Report recommending its construction I was very doubtful about the wisdom of the deliberate concealment of any indication of the purpose or nature of the project. However, I held my tongue, preferring to allow our leaders to reveal all when they judged it best; knowing something about our planning processes, I knew this could not be avoided for ever. But now this information is in the public domain, in the most clear manner, why shouldn't we be more honest? If building this facility is the right thing to do, then we ought to defend it robustly; we will have to if it does come to fruition.
I now want to turn to the issue of the wages bill. I suspect that, apart from the increasing cost of the estate, a wages bill that has risen faster than both inflation and the rate of increase in Chest income over the past four years is significantly responsible for our present deficit problems. The Treasurer's remarks earlier today would seem to confirm my suspicions. Let me make myself absolutely clear. We all recognize the problems of adequately remunerating the University's staff. But one of the great attractions of Cambridge for academic staff has been the relatively high proportion of time one can devote to research. I would say that this has been eroded, virtually continually, since I became a lecturer 17 years ago, largely through an increase in bureaucracy. If continuing to pay ourselves more, whether by means of above inflationary pay rises, restructuring, supplementary, or discretionary awards, means doing more teaching and administration, let us be honest about the consequences so that the Regent House can weigh the rather obvious advantages against the perhaps not so clear downstream disadvantages. For this reason, I welcome the recognition in the Report (paragraph 35) that costs must be a consideration in promotions, however regrettable that is. I earnestly ask the Council to make the real consequences of the recommendations they make to the Regent House as clear and transparent as possible in their future Reports. I ought to say that I recognize they have recently been making efforts in this direction already, for which I am most grateful.
Finally, I want to return to my theme of the gravity of the situation. In the current financial year we now anticipate a deficit of £8.4m. This is despite drastic financial measures, which in real terms have included a reduction in the capital allocation to my own Department of about two-thirds. A reduction which has meant that we have to beg, borrow, and steal to even maintain the equipment we have. All thoughts of any replacement of core equipment, regarded by the funding providers as essential to a 'well-found' research Department, from central resources must be postponed. Looking to the future I cannot feel reassured this postponement will not be indefinite. I am sure this is a common feature in other Departments. SRIF-2 is giving us some temporary relief, both centrally and personally, but the Council are right to be concerned for the long term. The Government have recently launched proposals for a major change in the system for funding research. The last major change, the so-called 'dual-support transfer' resulted in serious losses to this University. We need to examine the new proposals carefully and lobby Government to ensure that the same does not happen this time.
Dr R. J. ANDERSON (read by Mrs S. BOWRING):
Mr deputy Vice-Chancellor, several members of this House have asked why, although a member of Council, I did not sign this year's Allocations Report.
Previous Allocations Reports contained financial projections of the likely outcomes for the Chest should current policies continue. The text has now abandoned the tradition, and we are invited to satisfy ourselves instead with 'targets', according to which we are to break even by 2006-07. The text is not actually misleading - it does acknowledge that 'This will be difficult to achieve and will involve on-going challanges for all budget-holders' - but it is necessary to compare the spreadsheet with those of previous years to see comparable detail.
I believe that a projection calculated on the same basis as in previous years would show losses rising steadily from seven figures to eight, leading to a deficit of about £15m for 2006-07. Row 33 in the spreadsheet shows a deficit of £9.5m by then; if we restore the strategic planning reserve and allow for increased pension contributions made necessary by falling equity markets, about five million will be added to that.
The assumptions on the income side of the Report may be even more optimistic. The Report assumes that this year's £6m shortfall of research contract income was a transient blip, and that future years will recover to the previous trend line. This is not consistent with my own observations as I pitch companies for research grants. Everywhere belts are being tightened and the cake is being sliced more thinly. It might be more prudent to assume a continuing shortfall of £6m a year below trend, in which case our loses by 2006-07 will exceed £20m a year. On a pessimistic assumption that research contract income falls still further, we would face losses on a scale that would force quite drastic choices on us.
Yet the spending spree continues. The Report authorizes spending increases on residences and catering of 6.3%, on facilites and amenities of 6.5%, and on administration and central services of 8.4% for 2003-04. This is out of control. The Resource Allocation Model may eventually motivate Heads of Departments to control the 52% of our expenditure that flows through Departments, but we need much better mechanisms for cutting expenditure by central bodies. I believe it is time to start asking which central facilities and functions we can dispense with altogether.
Dr S. J. COWLEY:
Deputy Vice-Chancellor, I wish to make four short points in response to the Treasurer.
First, one would hope that all these new computing systems would lead to a reduction in support staff, for example, as promised originally for CAPSA/CUFS.
Second, the Treasurer referred to a major increase in staff costs. Assuming that my calculations this afternoon are correct, established academic staff increased by 1% last year while established support staff increased by 11%. The major increase in staff costs is due to the expansion of the UAS and not due to academic promotions. Further, the cap on academic promotions the Treasurer referred to is, I believe, £0.9m. How does that compare, say, with the loss on University catering?
Third, I was pleased that the Treasurer emphasized in her remarks that we are in fact facing a deficit of £9.5m in 2006-07. Moreover, if the equipment budget, say, is restored to the full extent of last year, then the predicted deficit will be more than £9.5m (unless special funds such as SRIF come to our aid). I think it would have been clearer to the University if the projected deficit for 2006-07 in the Allocations Report had been stated as £9.5m, rather than a zero deficit being projected as a result of £9.5m unspecified savings. The spin by which the true projected deficit of £9.5m in 2006-07 was buried, if not hidden, would have done justice to Alastair Campbell.
Finally, I believe that Dr Holmes stated that Council needs to get a grip on reality. I agree. For instance, if we are to compete even within the UK, if not internationally, then we need to be aware of what other universities are doing. As I understand it Imperial College London is at the moment in surplus. I also believe it pays its staff better, on average, than we do. If we do not get a grip on reality, and do not balance our budget by the time we get to 2006-07 (instead of, say, relying on a windfall of top-up fees), Imperial will probably be able to pay its staff at an even higher level than us. Then our position at the top of the league tables may be put in jeopardy.
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Cambridge University Reporter, 16 July 2003
Copyright © 2003 The Chancellor, Masters and Scholars of the University of Cambridge.