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Report of Discussion

Tuesday, 24 January 2006. A Discussion was held in the Senate-House. Deputy Vice-Chancellor Lord Wilson of Tillyorn was presiding, with the Senior Proctor, the Junior Proctor, a Pro-Proctor, the Registrary, and eight other persons present. The following Reports were discussed:

Annual Report of the Council for the academical year 2004-05 (p. 247).

CHAIRMAN OF THE BOARD OF SCRUTINY:

Mr Deputy Vice-Chancellor, the Board of Scrutiny have a duty to 'to scrutinize on behalf of the Regent House each year the Annual Report of the Council (including the Annual report of the General Board to the Council) [and] the accounts of the University'. In fulfilling its duty, the Board customarily makes some preliminary remarks at today's Discussion and subsequently publishes a more considered response in the form of an Annual Report in July. My remarks today are therefore in that tradition.

The Annual Report of the Council gives us a brief summary of its work over the past academic year. Two major developments which were foreshadowed in last year's Report, namely on pay and grading and on intellectual property rights, were brought to fruition in the form of final Reports during the year; the University finally approved the proposals for both, with some amendments by the Council, during last term.

The Board welcomes the publication of the Estate Plan which formed one of the recommendations in our Annual Report in July 2004. It would urge members of the University to read this informative document: some important future issues are raised in the Plan and we would all do well to reflect upon them.

We look forward to the inclusion of the University Press in the accounts for the current financial year and to the consequent completion of the consolidation process which has long been considered desirable by the Board.

The Board has also noted the reference in paragraph 14 to a blue paper on strategy associated with the Vice-Chancellor's address on 1 October. The Board would urge the Vice-Chancellor and the Council to make this kind of document available to all members of the Regent House, perhaps by publication on the University's website with an appropriate notice in the Reporter.

The Board asks the Council to consider including in future Annual Reports a record of attendance at Council meetings. Such information is already public but it would be useful to have it in collated form, such as is generally provided in company annual reports.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, one must be selective with a Report of this scope. But I am wondering whether the Council might not extend that scope even further. Statute A, IV, 1 (d) says that 'The Council shall make an Annual Report to the University', but it does not stipulate that it shall be in retrospect. Exploring the agendas and minutes of committees now on the Web one cannot help but be struck by the number of projects and plans afoot, many of them with huge potential implications, which the Regent House will not normally get to hear about until they become Reports, and many of them will change the University's ground rules without having to go through that process at all. One example, for the sake of brevity. In the Education Committee Minutes of 16 November 2005 we read (Minute 416.10), of the notion of 'awards' of the Institute of Continuing Education 'becoming awards of the University'. It is minuted that 'the implications of the proposal' include 'College membership, student appeal processes, access to University facilities, and quality assurance mechanisms. The possible resource implications were particularly noted'. But this extension of degree-awarding powers to qualifications for which students simply sign up will create havoc with the admissions strategy. Shall we import transferable credits? Will the Cambridge Programme for Industry, which features in the same Committee's recent minutes, want Cambridge degrees for its business executive clients too? These are matters too important not to be put before the University's governing body at an early stage of policy decision. It would have been good to have advance notice of the list given retrospectively at para. 17. Had para. 9 been before us in last year's Annual Report as a proposal I would perhaps not have been the only speaker at the Discussion of the Hughes Hall Report to notice its significance.

An instance of proposed changes potentially affecting the welfare of all our students being mentioned too late to allow input in a timely way is touched on in the Report before us. 23. 'Since January 2005 the Office of the Independent Adjudicator for student complaints in higher education has been designated by the Secretary of State under the recent Act. No complaints have been made from the University since the new system came into force.' [That statement does not hold for complaints from Colleges, incidentally.] 24. 'The existence of OIA means that the present Cambridge student complaints procedure is now too elaborate'. 'Simplification' is 'being considered.' Which bit of the following is it thought we can dispense with? '(i) Discussion and Advice; (ii) Informal Process; (iii) Formal Process'? And there is still no co-ordination of College with University procedures and no way of ensuring that students in different Colleges have similar procedures available to them, or that their total experience can be considered within a single complaint procedure. It cannot surely have been the intention of the 2004 Act that universities should change their procedures so as to provide a less adequate internal complaints procedure for students, and deliberately leave it to the OIA to deal with the students' resulting dissatisfaction?

My final comment concerns the general tone of such Reports as this. They are upbeat, summary, school reports of a Council apparently doing quite good work. But the Council is playing teacher and writing the report on itself. Is there not a case for a much more rigorous self-appraisal, and the laying out fairly for the Regent House and the world the areas where 'could do better' or 'we were surprised to find' might apply? Particularly in those areas where we are in the midst of constitutional developments and feeling our way.

13. 'The Council welcomed in January 2005 the two newly appointed 'external' members, Mr Nigel Brown and Lord Simon of Highbury, and have greatly valued their contribution to the Council's work since then.' We need to know rather more about the exact role external members are playing than this kind of vague plaudit. 'The Council greatly appreciate the contribution and commitment of these four members. The Council also record their gratitude to the other external members of the Audit Committee and to the external chairman and members of the Buildings Committee.' It is extremely important that the Regent House have a clear understanding of exactly what difference this move from a democratically elected Council to a Council with external members is making.

When CMI was launched in 1999, Lord Simon of Highbury, described at the time as 'former minister and Chairman of BP, currently advisor to the Cabinet Office', said, 'This is a world-class project and a brilliant concept for an educational alliance. It will encourage breakthroughs in entrepreneurship and new technology applications. It will contribute to the development of the European market in knowledge-based industries, which Government knows is critical for sustainable economic growth.'1 So how critically is he evaluating matters now when the affairs of CMI Ltd are discussed by the Council?

And I confess to having been perplexed by the piece in the Independent Education section on 12 January which implied that the Vice-Chancellor was personally responsible for the slight recovery in our finances to which reference is made in this Report. I did not know she played the Stock Market with the University's money. Exactness, please. A spin-free and forward-looking Annual Report of the Council next year.

1 http://www.admin.cam.ac.uk/news/dp/1999112302.

Mr K. J. BOYHAN (read by Professor G. R. EVANS):

Mr Deputy Vice-Chancellor, I would like to raise my concerns about the adequacy of Student Complaints Procedures within the University, in regard to paragraphs 23 and 24 of the Report of Council.

I raised a student complaint within my College in August 2003 which has still not been heard. The Appeals Committee in my College has been sitting for over two years and has still not organized a hearing into my complaint. I would like to point out to the Senate that I am a student who has attempted to make a complaint to the OIA in the summer of 2005. The OIA referred me back to my College. The OIA has no power to hear a complaint until internal College processes are exhausted. It is thus clear that the OIA cannot support students with complaints until the Colleges have concluded their own procedures.

Given this situation it is essential that there are adequate complaints procedures within the University and Colleges to support students who have grievances. In the two and a half years I have been waiting for my complaint to be addressed I do not feel I have received adequate support from either my College or the University. The only piece of advice I have received internally from my College since 2003 is to drop my complaint. The University Complaints Procedure has no jurisdiction and most students do not know much about the Commissary, its functions, and how it can assist students with grievances. Procedures are not too elaborate, rather they are lacking. The University has no procedures to monitor College processes: a serious inadequacy given that Colleges can take years to hear a complaint, and the OIA can do nothing about this.

Rather than cutting back on provision, I would like to see the University ensure that a more effective University complaints procedure exists; one which students who have difficulties within their College may have recourse to. It is highly desirable that the University complaints procedure is available to students when a conflict of interests may arise within a College; for example, when a well-known senior member stands accused of wrong-doing by a junior member. Where this is currently impossible, because the University does not have jurisdiction, the University should work and put resources into ensuring that uniform standards exist and are actively implemented across the Colleges.

In sum I would like to see more resources being put into an effective University complaint procedure for students, coupled with greater efforts at implementing effective and enforceable College complaints procedures that are of a similar high standard. More advice and support for students with complaints is also needed.

Annual Report of the General Board for the academical year 2004-05 (p. 250).

CHAIRMAN OF THE BOARD OF SCRUTINY:

Mr Deputy Vice-Chancellor, the Board of Scrutiny welcomes the progress reported in the Annual Report of the General Board on a range of fronts. Some of the initiatives catalogued will be taken forward in the present year. In this context, the Board hopes that assessment of potential future developments, for example in the areas of international and graduate education, will include accurate costing of all plans.

Paragraph 16 of the Report discusses the review of Architecture. It is inevitable that reviews which identify 'major concerns' will pose problems for the University in terms of procedure. It seems to us that this particular case escalated at an early stage of the process, giving rise to an unfortunate adverse impact on both the University and the Department concerned. We suggest that the General Board gives some thought as to how future issues of this nature might be handled so as to avoid unnecessary anxiety, publicity, and disruption. We stress that we do not imply that the University should never take difficult or unpopular decisions, merely that we should endeavour to improve our procedures for considering such matters.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, a general improvement in General Board vigilance is in evidence in this Report, and there seems (she said suspiciously) much to commend. But the point I sought to make in my remarks on the Council's Annual Report applies with equal force here. Topic after topic fills my mind with unanswered questions and I want to know in advance, not in retrospect, where things are heading. Let me list a few:

3.1. Pedagogic Support Steering Group (this does not seem to have much to do with teaching quality directly);

5.1. Suspension of the Diploma in Management, pending a review by the Judge Business School of its graduate provision. It says on the website that the Diploma in Management Studies, which I take it is the same thing, is to be run for the last time in 2005-06;1

5.2. The Cambridge-MIT Exchange Programme;

8.1. The International Education Office and its 'involvement in a wider range of the University's international activities.' Within the Unified Administrative Service?;

10. Planning for the RAE. (What is afoot? The Resource Allocation Model and the planning process do not tell us and yet buyings in are being referred to, as in one of the Reports discussed last week.)

Finally, and more important than all these particular endeavours, the word 'approved' occurs many times in the Report, sometimes by 'the University', sometimes by 'the Regent House', sometimes by the General Board itself, and sometimes the approval is in the passive voice so that something is reported simply to have been approved. Could we be told which of the General Board approvings has created an Ordinance under Statute C? I am not suspecting the Board of abusing its powers under that Statute but since it is the only way an Ordinance can be created without the Regent House having an opportunity to approve or challenge it, it is a power of huge significance. Exactness, please.

1 http://www.jbs.cam.ac.uk/programmes/diploma/index.html.

Mr D. J. GOODE:

Mr Deputy Vice-Chancellor, I speak as Vice-president of the Cambridge Association of University Teachers (CAUT).

As a bit of background to my comments on this Report, I would like to step back to the House of Commons on 29 April 2004. During the course of that day, Alan Johnson, Minister for Lifelong Learning, Further, and Higher Education, was answering questions. One of the people asking questions was Ben Chapman, Member for Wirral, South. The exchange went like this:

Mr Chapman: In recent times, I have had a great deal of correspondence from academics expressing their concern about the relative long-term decline in academic salaries. I share that concern. Does my Right Hon. friend accept that, if we are to have world-class academic institutions, we need to attract and retain quality staff? Does he agree that as the Government have a role to play in the funding of higher education, they have an influence on salaries? Does he have a long-term plan to solve the problem?

Alan Johnson: I entirely accept the point that my Hon. friend makes. Indeed, the Prime Minister, in a speech late last year, said: 'The shortfall of teaching funding has badly hit the salaries of academic staff, which have shown practically no increase in real terms over two decades.'

That is one of the reasons why we are pursuing the controversial measures in the Higher Education Bill. Not only are we putting in an extra £3 billion from the taxpayer, but an extra £2 billion will come through existing fees and through the increase. University vice-chancellors tell us that, in general, at least a third of that money will be put back into the salaries and conditions of their staff. That will make an enormous contribution in tackling a very serious and deep-seated problem.1

Six months later, reporting to the University at the end of her first year in office, our Vice-Chancellor acknowledged the problem, saying:

At the high end of the scale, in several disciplines Cambridge salaries fall far below those of other universities in this country, let alone abroad. Our salary policies have not recognized the differing external influences at work among academic disciplines, and this limits our opportunities in a world that does. Young men and women do not choose to join an academic community primarily as a financial decision, and nor should they. But it must be possible to have a decent life style, and Cambridge must certainly be able to hold its own against our peer universities.2

Fine words and noble sentiments from the Prime Minister, the Minister for Lifelong Learning, Further, and Higher Education, and our Vice-Chancellor. The problem is identified - low pay; and the solution promised - at least one third of the £5 billion from the taxpayer and from fees will be spent on improving salaries and conditions. Marvellous.

Except it isn't. The vice-chancellors in general have gone back on their promise. There were two interesting developments last week: Geoffrey Copland, Chair of the Universities and Colleges Employers' Association (UCEA) writing in the Times Higher Education Supplement (THES) that no such promise was ever made by universities, either collectively or individually;3 and Alan Johnson, the Minister, replying to a question from the press at a meeting in University College London on the same day that Copland's denial was published in THES, that it was Universities UK, the vice-chancellors' body, which most certainly had made this promise in 2004.

Which brings me home to Cambridge. Paragraph 9.2 of this year's Annual Report of the General Board to the Council says:

The 2005 Report again highlighted the need for investment in staff and facilities to ensure the University's continued ability to recruit and retain high quality staff of all grades but forecast surpluses are too uncertain and at too low a level to plan significant investment from the Chest, at least in the short term.4

There seems to be no doubt here. There are no plans to address the serious problem, identified, as I said a moment ago, by the Prime Minister, the Minister for Lifelong Learning, Further, and Higher Education, and our own Vice-Chancellor. Last year, it was a 'need'. This year it's a no-no.

When, Mr Deputy Vice-Chancellor, will this University address the problem? How long is this 'short term', in which we will just have to make do and mend yet again with pay rises that barely match the cost of living? A year? Two years? Another two decades?

And how does this University expect to 'recruit and retain high-quality staff', to give staff 'a decent life style', when the sad truth is that our salaries have 'shown practically no increase in real terms over two decades'?

Unless, of course, you are a vice-chancellor. Our salaries have 'shown practically no increase in real terms over two decades'; we are no better off in real terms in 2006 than we were in 1986. But the eleven vice-chancellors on UCEA's board have accepted pay rises that have averaged more than 30 per cent. Not in the last twenty years. No. That's just in the last three years.5

It goes without saying, though I shall say it anyway, that our Vice-Chancellor's salary is determined by the University and published in Statutes and Ordinances, and that she is not one of the eleven on UCEA's board.

Responding to this average 30 per cent salary rise in three years for vice-chancellors, a spokesperson for UCEA said:

Vice-chancellors do a very demanding job ... Their remuneration packages reflect what it takes to attract, retain, and reward individuals of sufficient calibre.6

Blimey. That almost sounds like paragraph 9.2 of the General Board's Annual Report. Except for the bit about the greatly increased remuneration package, that is, because we're clearly not getting one.

Professor Minson finishes his Treasurer's Report on a note of hope:

With the prospect of additional income from fees and research funding, the outlook is now more encouraging.7

But not for most of us.

1 Hansard, Session 2003-04, vol. 420, 29 April 2004, col. 993.

2 Report to the Regent House, Reporter, 6 October 2004, p. 17.

3 THES, 20 January 2006, p. 16.

4 Reporter, 16 December 2005, p. 251.

5 THES, 20 January 2006, p. 4.

6 Ibid.

7 Reporter, 16 December 2005, p. 258.

Dr D. R. DE LACEY:

Madam Vice-Chancellor, as the official Chairman of this Discussion I wish to address you directly on these two, related, Annual Reports.

Over the past year I have received two remarkable missives from those leading our University. The first was from yourself, a letter sent out to all alumni - and to all alumnae, though the latter are snubbed in the body of the letter - and in it you assured us that 'We are managing ourselves well to make cost-effective use of all our resources.' The same self-congratulatory tone pervades all of the Reports before us today. Yet I could not help noting a disparity between form and content in your letter. Cost-effective? The letter was printed, one side only, on two separately folded sheets of high-quality paper, colour-embossed. And are we really allowed to offer a critique of how our Council and General Board are doing? The Reports scarcely invite it, and my response to your letter still awaits even an acknowledgement.

We (or the Central Bodies on our behalf) have been busy this year setting up and establishing all sorts of things, from a Research Associateship into under-achieving students (6.1: let us hope that the successful candidate does not fail to achieve!) to an International Alliance of Research Universities, alas too recently for comment from either body. The Reports are a little thin on the specific value, to say nothing of the costs, of these various exercises. What added value have our hard-fought-for external members actually brought? Paragraph 13 [of the Council's Annual Report] says that it is great, but is distressingly thin on detail. It is not so much what these reports tell us which concerns me: it is what they fail to tell.

Further clarification would also be helpful on Paragraph 9.2. It appears to say that although the 2005 Report 'highlighted the need for investment in staff and facilities' we are planning to invest only in the RAE result (though how?) because of our parlous financial state, which fits ill with the overall air of optimism.

Other comments on our use of resources are more germane to the Treasurer's Report, so let me turn to that second letter. It was sent out by the Pro-Vice-Chancellor for Research, and indeed claims to be a piece of research: a survey of our economic impact on the UK economy. Odd then that it should arrive with CAM, a magazine with a worldwide circulation; even odder that it is both anonymous and available on-line, thus allowing any Tom, Dick, or Harry to invent whatever impact he likes. Indeed, it is such a poorly tailored survey that instead of asking me what Tripos I sat, it asks if I took my degree in Art or Design. Since there were questions I was not permitted to answer truthfully, I was obliged to lie and took comfort from Luther's advice to Melanchthon: pecca fortiter! I know acquaintances of mine went even further, completely vitiating any value in the results. Since the Pro-Vice-Chancellor has acknowledged1 the weakness of this mode of 'research', may we know, perhaps under the guise of Full Economic Costing of Research, quite how it justifies his title, what it cost and what use is to be made of it? And may we hope that the approach to the RAE will be somewhat more rigorous?

1 In a contribution to the newsgroup ucam.change.governance on 21 March 2002.

Dr D. A. GALLETLY:

Deputy Vice-Chancellor, at the comparable Discussion this time last year, I expressed my concern at the almost complete silence regarding the potential closure of the Architecture Department. I am glad to see that this silence has not persisted in this year's Report. I am less glad to note that the General Board seem to be happy with the way things are going, and fear that I cannot share their contentment. Allow me to explain why.

In their Report concerning the establishment of a Professorship of Sustainable Design,1 the General Board stated 'In the Easter Term 2004 a Working Group, set up by the Board to consider options for the future of the Department of Architecture, advised of the need for a significant, and sustainable, improvement in the Department's research. In the Group's view, this would be best achieved if the Department concentrated its research efforts in the area of sustainable design since work in this field was generally considered to represent overall the Department's strongest research performance. The Group also recommended that, subject to the Board accepting the academic case and to the availability of funds, there should be a number of new appointments, including a Professorship, in fields within sustainable design. This would facilitate the Department's aspirations of playing a leading international role in this area, whilst the new Professor would be expected to provide strong leadership at this critical time for the restructured Department.'

Am I the only one who read this as meaning that new blood was intended to fill this position? I don't think so. Certainly the remarks of Professor Evans at the ensuing Discussion made it sound as if she, too, expected that the successful candidate would come from outside Cambridge. After all, the reason that this Working Group had been set up initially was that the Department was supposedly underperforming, and was not expected to perform as well in the RAE as would be considered desirable.

The same Report went on to say 'The establishment of a Professorship would strengthen teaching provision in this area as well as providing leadership for the development of a consolidated research strategy which would incorporate a number of the cognate research interests that presently exist in the Department. It should also lead to an increase in the Department's external research grant income. The Department has advised the General Board that the Professorship is likely to attract a strong field of well-qualified applicants.' So it looks as if they, too, were expecting an external candidate to be successful.

It was intended that the new Professor be in post by 1 October 2005. In the end, it was not until the end of November that the decision was finally taken to promote from within, after having kept candidates on tenterhooks for some months, following an interview process tortuous in the extreme. And, no doubt, expensive. May the Regent House be told how much money was expended on this charade, which has had a result not of generating 'new blood' but merely of recycling old? And what happened to this likelihood of attracting 'a strong field of well-qualified candidates'? Did such candidates fail to materialize? If so, does this not rather give the lie to this area being a fruitful one for future research? If not, what happened? In summary, the University had an unprecedented opportunity of increasing its strength in the area, which it seems singularly to have failed to take.

1 http://www.admin.cam.ac.uk/reporter/2004-05/weekly/5991/12.html.

Reports and Financial Statements (Abstract of Accounts) for the year ended 31 July 2005 (p. 256).

Professor A. C. MINSON:

Deputy Vice-Chancellor, the financial statements for 2004-05 show the University close to income/expenditure balance, an outcome significantly better than predicted in the previous year's Allocation Report, combined with a healthy improvement in the balance sheet thanks to the performance of stock-markets. This is good news but it should be treated with caution and provides no grounds for complacency. As the Allocations Report stated and the Board of Scrutiny noted in their Annual Report, the University faces financial uncertainty on a number of fronts. The adverse financial impact of the new arrangements for pay and grading is difficult to predict, the effects of the 2008 RAE and the HEFCE review of teaching funding are uncertain, and pensions continue to be a matter for concern.

The improved results for 2004-05 are due in part to external factors such as increased investment income, and additional Government support in advance of full economic costing of research. Nevertheless, a major factor has been the impact of devolved budgeting and the development of plans in the context of financial constraint. It appears that Schools, Departments, and institutions throughout the University are controlling their budgets and using resources more efficiently.

Devolved budgeting and the production of five-year plans has been a considerable undertaking and has taken place against a background of many other pressures. The past eighteen months has seen the development of the bursary scheme and the OFFA agreement, the introduction and implementation of full economic costing of research, the production of two consecutive five-year plans and, perhaps most demanding, the work towards implementing a single pay spine. The burden of this additional work has fallen on all grades of staff throughout the University but our administrative staff in Departments and institutions, in School and Faculty offices and in the central administration have borne the brunt. I speak on behalf of all five Pro-Vice Chancellors in thanking administrative staff throughout the University for their substantial efforts on the University's behalf during the past year.

CHAIRMAN OF THE BOARD OF SCRUTINY:

Mr Deputy Vice-Chancellor, the Board of Scrutiny have examined the financial statements and accounts and we have been greatly assisted by a meeting with the Director of Finance. We thank Mr Reid for his time and help. The Board has a number of preliminary observations to make.

First, we welcome the improvement, evident when compared with the previous financial year, to the overall consolidated group accounts (which exclude the University Press). As described in note 11, the deficit reported last year of £8.9m has been reduced to £0.5m for the present reported year when calculated on the previous basis. The inclusion for the first time of the associated Trusts produces a surplus on continuing operations of £1.8m this year against a restated £8.1m loss last year.

Second, it is evident that a significant contribution to the improvement has been made by the sustained effort at cost containment within the academic activities of the University. Members of the Regent House are no doubt aware of the economies which have brought about this restraint within their own spheres; it is good to recognize that such efforts have been successful in helping the University balance its books.

Third, we are aware that the Director of Finance hopes to make further improvements to the presentation of the accounts, in particular the treatment of segmental reporting (note 10). This is a complex area which many members of Regent House probably have some difficulty in unravelling. Any improvements (which we understand the Director of Finance hopes to bring about next year when the Press's accounts are consolidated) making these matters easier to follow will be most welcome. The University will be glad to be reassured that UCLES (Cambridge Assessment) continues to make a profit on its core operations as well as making a valuable financial contribution to our academic activities, in the form of £8.1m transferred as income and £10.5m transferred as reserves during 2004-05.

Fourth, another new element is the operation of the Amalgamated Fund on a total return basis. The favourable investment market conditions during the reporting period enabled a significant (and welcome) improvement in the value of the endowments and reserves.

Finally, we draw the attention of Regent House to the Treasurer's Report, which gives a careful and balanced view of the accounts. In particular, we welcome the cautionary note of the final paragraph and share Professor Minson's concern about potential future pension liabilities.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, I begin with the important question, imperfectly covered in the governance section of these accounts, of the way Cambridge proposes to adjust its constitutional arrangements to reflect the move from a post hoc style of auditing to a preventative, risk-management approach. The constitution of Oxford's Audit Committee may be found on the Web1 and its risk management arrangements, although it is rumoured they have been dismantled. You may read the Audit arrangements of Cambridge in Statutes and Ordinances (2004), p. 900, in the Finance and Property section. We have not had the serious constitutional discussion of the role and membership of the Risk Steering Committee we had when we reconfigured the Audit Committee at the time of our last governance debate. And why are the Minutes of the Audit Committee not available on the Web when so many other Minutes now are? Also the Minutes of the Risk Steering Committee? It makes it difficult to trace what is going on.

Cambridge's Accounts this year make the following distinction: 4. 'The Audit Committee governs the work of the Internal and External Auditors, reporting on these matters directly to the Council. The Risk Steering Committee is responsible to the Council for the identification of the major corporate risks and their management.' But it also reports to the Audit Committee directly and has some embedding function putting audit inside risk management. It is to 'inform the Audit Committee on risks and controls that should be included in the Audit needs assessment, ensuring the integration of Internal Audit into risk management.' We need Professor Edwards to draw us a Venn diagram of all this. I cannot easily construct it from these texts.

When I search the University Offices' website http://www.admin.cam.ac.uk/offices/secretariat/risk/committee/), I find the current membership of a committee whose method of appointment and required range of membership we have never discussed. I find a statement of the Role of the Risk Steering Committee ('RSC'), whose Terms of Reference were approved by the Council on 21 June 2002, 21 July 2003, and 26 July 2004, but never by the Regent House. I learn that 'The RSC is an operational committee set up by the Council to oversee the risk management process of the University.' I am not sure what an 'operational committee' is, but the adjective seems to imply that it has powers to act. That is borne out by '(c) Ensure compliance with HEFCE Guidelines'; and '(h) Help embed a risk management culture into major decisions, through risk education, high level controls, and procedures.' I also find: 'The RSC will be established in the first instance to 31 December 2004 and before expiry of its term will recommend to Council what the longer term risk management mechanisms should be.' I find the RSC still exists and a Risk Management Strategy approved in the summer of 2004 and dated 16 November 2004 still on the website, and apparently constituting our latest thoughts on the subject.2 But a huge amount has been happening within HEFCE since then. The strategic change is on its way. There have been HEFCE consultations. Where may I read about Cambridge's discussion and response?

The University website points out that risk management includes 'the range of Statutes, Ordinances, regulations, procedures, and policies the University and Schools and Departments use to govern their work' as well as 'any additional controls or mitigating actions taken to deal with a particular situation'. The former are most certainly the business of the Regent House.

There has as yet been no Report to the University on the role and constitutional place of risk management, and so there are no Ordinances governing our risk management arrangements, just this obscure process on the Council. Where is the independence risk management requires if it is to be tough where toughness is needed? I invite the Council to offer us a Report so that we may consider setting up a Risk Steering Committee which will not merely report to the Council but to the University and whose future relationship to the Audit Committee we may decide through the proper constitutional channels.

There are implications for the role of the Board of Scrutiny too, for it was set up and its constitutional role defined before this shift to risk management began. There is provision in Statute A,VII for the Board of Scrutiny to be given additional powers if Ordinances are created for the purpose. Such additional Ordinances would require a Grace of the Regent House. So the functions of Cambridge's Board of Scrutiny can be kept up to date, although no such Ordinances have been created yet.

The Board itself has not, however, apparently yet fully grasped that the world has changed and risk management is the order of the day in university administration. In the Tenth Report of the Board of Scrutiny published in the Reporter of 10 August 2005, para. 46 mentions 'the top ten risks facing the University' as identified by the Audit Committee, which held an extraordinary meeting on 14 April 2005. Para. 49 suggests that 'risk' is the possibility that something bad will happen. There is a better definition in the Committee of University Chairmen Code (2.33): 'Risk can be defined as: 'the threat or possibility that an action or event will adversely or beneficially affect an organization's ability to achieve its objectives'.' (I shall come back to this code in a moment.)

I would like to see the future role of the Board of Scrutiny included in the Report I am calling for because the merest glance at the Minutes of the Finance Committee suggest that the Risk Steering Committee is not as visible in the record as it might be. In the Minutes for November Bad Debt Write-offs get a risk mention.3 But in the Minutes for 30 November4 there does not seem to be any conscious consideration of risk management as such, although riskiness is much in evidence. A huge fanfare attended the decision to go ahead with the development of the West Cambridge site, though some of us audibly wondered about its advisability. We now read: 'The Committee felt that West Cambridge had not yet reached critical mass'; 'The Committee also noted that the Citi4 bus route which currently served the West Cambridge site would cease in 2006. The PRC was considering whether to continue funding this, the cost would be in the region of £230,000 a year.' Meanwhile the North West Cambridge site plans are apparently stealthily going forward regardless. I would put my money on the Board of Scrutiny looking into all this, not the Risk Steering Committee. And which of them is the Regent House going to hear from on a regular basis?

Today's Education Guardian has picked up on that recent press release about Cambridge's decision (in fact, I understand, made by the Council) to become one of ten 'world-class' institutions to 'sign' the 'International Alliance of Research Universities' (IARU). The Guardian says this Alliance 'is intended to bring the institutions closer together than the usual exchange agreements', 'exhanging' students 'at all levels' to work on joint projects. Protection of our autonomy? Our degree-awarding powers? Our research freedom? Exactly what does the text of this 'Alliance' say? Publish it in the Reporter, please, with the risk management aspects properly spelt out. More than one court case has begun recently with badly drafted 'alliances'. Few areas are more risky and we do not have the Risk Steering Committee Minutes to assist us to know what they thought.

One or two final points. The position statement in these Accounts on the question where Cambridge stands in relation to the Committee of University Chairmen must not go unnoticed. I have it from the horse's mouth that both Oxford and Cambridge have been invited to consider some sort of affiliated membership since, having no Chairmen, they cannot actually join. To do so they would both have to reorganize their governance so as to resemble either a chartered 'old' university or one of the post-1992 statutory corporations which were formed from the former polytechnics when they became universities. 'The University endeavours to conduct its business,' we are told, 'within the general principles of the Guidance to Universities which has been provided by the Committee of University Chairmen and its 'Guide for Members of Governing Bodies of Universities and Colleges in England, Wales, and Northern Ireland'.' This is important because to do so qualifies the University for a 'light touch' from HEFCE.

Nor must the quiet 'no' to Oxford's present proposals to change its governance go unremarked. 9. 'The University is a self-governing community whose members act in accordance with the seven principles of public life (see paragraph 2 above) and in pursuit of the objectives and purposes of the University as set out in its Statutes. The University complies with most but not all of the voluntary Governance Code of Practice published in November 2004 by the Committee of University Chairmen. In particular the Vice-Chancellor is chair of the Council, which does not have a majority of external members, and the Council is subject to the statutory authority of the Regent House. The University has no immediate plans to change these arrangements, which have proved reliable over many years in enabling the University to achieve its academic objectives.'

I do not of course quarrel with the position taken here, but I do wonder - as I have remarked before - whether it is altogether wise for the two ancient universities to be defying one another when it seems much more in their joint interest to work together to preserve what is best in their governance in a period when they are especially vulnerable to outside interference.

Lastly, a mistake which needs correcting. 'Under the Statutes the Governing Body of the University is the Regent House which comprises the resident senior members of the University and the Colleges' (Corporate Governance Statement). 'Oh no it isn't,' you cry if you have been to the pantomime this Christmas. It is a pity to get his kind of thing wrong, for there are important assertions in this section of the Report, and the reader needs to know they are reliable. If this is not put right in the Council's response there will be questions about who has the vote to add to the matters before it when we finally get to discuss the Voting Report in February.

1 http://www.admin.ox.ac.uk/statutes/regulations/520-122c.shtml and see also http://www.admin.ox.ac.uk/riskmgt/.

2 http://www.admin.cam.ac.uk/offices/secretariat/risk/strategy.html.

3 http://www.admin.cam.ac.uk/cam-only/committee/finance/minutes/20051109.html.

4 http://www.admin.cam.ac.uk/cam-only/committee/finance/minutes/20051130.html.

Dr D. R. DE LACEY:

Mr Deputy Vice-Chancellor, given the number of hats which he now needs to balance on his head, we cannot perhaps expect the Acting Treasurer to have spent too much time on this Report: it is however a pity no-one could be found to proof-read it for him. Numbering the paragraphs would have been a help, too, in avoiding extensive quoting. 'Staff costs overall increased by £13.6m (+4.2%) to £334.7m. The Cambridge Assessment, Gates Cambridge Trust and Associated Trusts account for £6.1m and £51.5m respectively of these consolidated totals.' Three institutions, two figures. May we request clarification? 'The staff costs of the University's teaching and research activities increased by 2.7% in the year.' Once again lagging far behind administrative staff costs. Is this really appropriate?

The Acting Treasurer notes 'a significant and encouraging improvement on the 2003-04 deficit', mainly due to the 'impact of ongoing attention to costs taken with additional investment income and full economic costing funding'. 'The change in the basis of preparation of the financial statements, which now include the Gates Cambridge Trust, the Associated Trusts, as well as Cambridge Assessment, improves the overall picture of the University's activities.' Does this mean any more than that we have more coming in because of our new accounting system, and therefore a smaller deficit? Is it possible to retroject the new system onto the results of earlier years, to allow us to see precisely what improvements are being made in real terms?


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Cambridge University Reporter 1 February 2006
Copyright © 2006 The Chancellor, Masters and Scholars of the University of Cambridge.