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Report of Discussion

Tuesday, 6 February 2007. A Discussion was held in the Senate-House. Deputy Vice-Chancellor Professor Ian Leslie was presiding, with the Senior Proctor, the Junior Proctor, two Pro-Proctors, the Registrary, and ten other persons present.

The following Reports were discussed:

Annual Report of the Council for the academical year 2005-06 (p. 255).

Mr R. J. STIBBS:

Mr Deputy Vice-Chancellor, traditionally the Chairman of the Board of Scrutiny makes some remarks at this Discussion, but unfortunately the Bursar of Selwyn cannot attend today because of personal reasons.

The Board of Scrutiny have a duty '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 the Board's duty, a representative of the Board customarily makes some preliminary remarks at today's Discussion and the Board subsequently publish a more considered response in the form of an Annual Report in July. The remarks today are therefore in that tradition.

However the remarks cannot but help to be even shorter than usual as the Report itself is rather short. By many accounts the meetings of Council during the year were quite lively, whilst the Report is a rather dull and worthy list of discussions and outcomes. It is of note that the length of the Report has steadily decreased (with one blip) over the past six years from over five thousand words to today's two and a bit thousand. Perhaps the Registrary is getting better at précising as time goes on or is attempting to leave fewer hostages to fortune for his successor. Whatever the reason, the Board feel that before writing our Report in the summer, we will need to investigate thoroughly to ascertain what, if anything, is hidden between the lines.

We do however unequivocally welcome Council's unhidden hope to introduce green papers and web discussions to widen and deepen consultation.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, the Council's midget Report can support only a tiny speech. What does this scrap of a Report suggest about where power is actually exercised in the University and why are we not getting an Annual Report from the Monday Morning Meeting of the Senior Management Team if that is where the University is now really run? I cannot find this entity in the Statutes and Ordinances. I do not object to its existence but I think the Regent House should be told who attends and what it does. An oral report by the Vice-Chancellor to the Council is not satisfactory. It leaves no footprint in the records.

This is particularly topical because of the recent publication of the latest Guide of the Committee of University Chairmen on Key Performance Indicators, with its pragmatic acceptance that Councils and their equivalent will in practice leave 'operational compliance' to 'the senior management' (1.24). It proposes that the members of governing bodies should be supplied with a brief pack of information (25-30 pages) and notes that even 'this is probably too much material'. 'The one-page summary would show at a glance where any potential problems lie and individual governors could choose to refer to the particular back-up pages for the areas of interest' (1.48).

But, forgive me, would that not mean that governors would be dependent on what the senior management chose to tell them? How would they know 'where any potential problems' lay if they pursued this laid-back approach to the discharge of their Primary Responsibilities? Those, according to the CUC code of governance, are quite numerous and detailed and could not possibly be covered by a one-page summary. I do not for a moment suggest that Cambridge's Council would be so lackadaisical and anyway the Regent House would not let it. I just hope this very short Report is not the start of a trend towards a 'brief pack of information' approach to reporting to the Regent House. It is only once a year, after all.

Annual Report of the General Board for the academical year 2005-06 (p. 258).

Mr R. J. STIBBS:

Mr Deputy Vice-Chancellor, the Academic Secretary is clearly with us for the long haul. The length of the General Board Report has hardly varied over the last six years. As to the quality, again we will leave the detailed analysis for our Report later this year.

However there are three matters arising from the Report that we wish to draw to the attention of the University.

The first concerns paragraph 2.1, which refers to the 'Review of Oriental Studies'. The consequent Report has generated a considerable amount of heated discussion with various accusations of bad faith. The Board of Scrutiny wish to observe that changes in academic priorities must be conducted in such a way that necessary change is not stymied by single-interest groups. The Board commend the General Board's handling of the amalgamation of the Departments of Anatomy and Physiology which despite some angst in the process was successfully concluded at the end of 2005-06.

Paragraph 3.2 refers to the 'current contributors to pedagogic support' and lists five such. The Board have heard various comments both about the lack of co-ordination between various parties and indeed about the existential need for various of these bodies which absorb significant University resources. We plan further investigation before our Report.

Finally we wish to raise a cautionary flag. Paragraph 7.2 mentions the Board of Graduate Studies success with the integration with CamSIS. The Board of Scrutiny have, however, been made aware of continuing problems with various data-feeds and in particularly with the integration of College systems with CamSIS. We believe that since the beginning of this academical year, these concerns are being taken more seriously by the project and we hope that this will continue.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, another rather terse Report. Why?

There is much talk of 'the research strategies of particular disciplines' and the 'research plans' of the Schools. Some of this, it is admitted, is 'in readiness for the 2008 Research Assessment Exercise (RAE). A number of key senior appointments have been made, or are planned, both in core areas, and to play important leadership roles in areas which span more than one institution'. 'The Board expect to see the development of further cross cutting themes of global importance, for example in the fields of energy and sustainability.' 'Such initiatives should be a priority for strategic investment by the University.'

A couple of thoughts on all that. Interdisciplinarity, where Cambridge has proved spectacularly useless at ensuring that officers in subject areas tied by 'establishment' to individual Faculties in different Schools, could get a following-wind for their research and teaching is now a Good Thing. The trick is to press the right word-buttons ('global', 'sustainable'). This raises questions not a thousand miles away from those which filled the Senate-House with speeches throughout the last two Tuesday afternoons and threaten to do so again now that Portuguese is for the chop. Are decisions affecting the continuance of disciplines and combinations of disciplines to continue to be taken 'piecemeal'? Last time I used that word in a speech there was an indignant protest. But is this not the realistic description of present practice in determining the future of whole areas of study in the University? If the General Board now accepts that there are 'areas which span more than one institution' surely the way subsidiarity of local decision-making works has to be revisited? And the local effects of RAM?

There are three ways of 'driving' research effort. One is through the intellectual interests of academic staff, which is still pretty much how Statute D sees the matter. Another is through managerial directive. The third is to allow knowledge to develop in whatever direction research happens to lead the enquirer. Not a bad 'plan'. Worked all right for centuries. I mistrust the 'research strategy' approach. I have recently been reading the papers of the North Commission in the Oxford University Archive. The discussion of 'research strategy', and whether the University could have one for the arts and humanities, is well worth setting beside the conversation Cambridge is trying not to have. In May 2005 Oxford erupted when academic staff received letters threatening them with disciplinary action if they did not frame their research plans as directed by their line managers. Perhaps more afternoons in the Senate-House loom?

I am pleased to see that something has been done to control the developments in 'collaborative educational provision' (i.e. provision offered in partnership with other organizations) which were indeed 'highlighted as an area for attention in the last QAA Institutional Audit'. 'The findings will help to inform future policy in this area.' Could these findings be published for the Regent House and others to read please? This is an area where things are moving very fast in the big wide world and Cambridge needs to keep up in its awareness of new dangers. I see that 'the International Office has now broadened its remit to include support for the University's wider international activities, particularly with regard to strategic academic links, and the development of regional- or country-specific strategies'. So this needs a good deal of informed vigilance.

Cambridge is participating in HEFCE's initiatives, 'despite its reservations about the utility and cost-effectiveness of certain measures'. But HEFCE is now engaging in a 'conversation' with institutions and surely this should be a two-way conversation in which Cambridge sets out these reservations. 'Comply or explain' are the options HEFCE formally offers. I wonder whether the moment has not come for some proactive explaining from Cambridge?

Dr D. R. DE LACEY:

Mr Deputy Vice-Chancellor, it is a delight to see that 'strategic planning' is a headline item in the Council's Report. Clearly after the Discussion of the past two weeks what we need is some strategic planning.

Slightly less of a delight to discover that it is linked with resources and finance, and a deep disappointment to discover that all our strategy is bent towards financial balance (at any cost, it would seem), College fee settlements, the RAE (because of its part in the University's funding), and the Investment Board. The reader turns to the General Board's Report with waning hope. Lots of use of the word 'strategy', certainly. Not much that would actually pass as strategy, though. It is good to read in 1.5, albeit also driven by funding concerns, that 'all the Schools are giving a very high priority to their research plans ... A number of key senior appointments have been made, or are planned, ... to play important leadership roles in areas which span more than one institution ... The Board expect to see the development of further cross cutting themes of global importance ... such initiatives should be a priority for strategic investment by the University.' I suspect that all speakers here over the past two weeks would say amen to that. But as the Professor of the Spanish Golden Age, with her Pro-Vice-Chancellor for Education's hat on, shuts down a part of her own Department one wonders who will actually be driving this strategic investment. Could the Board please tell us?

'The review of the Faculty of Oriental Studies generated a set of very significant recommendations, for both the reorganization of the Faculty and reform of its teaching provision, implementation of which is being overseen by a special Advisory Group of the Board, chaired by the Pro-Vice-Chancellor (Education)' (2.1). In the light of the last Discussion perhaps the Board would wish to withdraw the phrase 'very significant'. Or, better still, take up the offers made last week by Professor Bowring and others, and have a proper review to establish a proper, trans-disciplinary and trans-School Department of South Asian Studies within an Oriental Faculty worthy of the name. Whatever that name turns out to be.

Reports and Financial Statements (Abstract of Accounts) for the year ended 31 July 2006 (p. 263).

Professor A. C. MINSON:

Deputy Vice-Chancellor, it is a pleasure to note that this year the University's accounts include those of Cambridge University Press and that Council has now taken the final step in bringing our financial statements in line with best accounting practice. Council is presenting accounts that are 'true and fair', an important step in reassuring the Regent House, the Audit Committee, the Board of Scrutiny, the Funding Council, and, equally importantly, other external bodies that the University is managing its affairs effectively. The consolidation of the accounts of organizations with different financial year end dates has required a great deal of work and the staff of the Finance Division of the UAS, in particular, deserve our thanks.

The consolidated accounts report a small operating surplus for 2005-06 but one corresponding to only about one per cent of turnover. A breakdown of the accounts into the main elements shows that the academic activities of the University also generated an operating surplus, but again only about one per cent of turnover. By comparison with recent years this is better news and, I believe, reflects in part the impact of devolved budgeting on control of expenditure. It is, however, worth noting that, as a result of devolved budgeting, the small operating surplus is held in the reserves of Schools and Departments, while central funds (the Chest) incurred a small deficit. While it is appropriate that local reserves should be available to facilitate effective local decision making, it is also important that central reserves are available for University-wide strategic purposes.

Looking forward things will not get easier. There is some good news in that predicted increases in pension costs now appear unlikely to materialize. The 2006 actuarial valuation of the CPS scheme appears unlikely to trigger an increased contribution rate and the USS Trustees have announced that there will be no increase in the contribution rate this year. The scheme is, however, under-funded and this remains a concern. On the downside, pay costs are rising well above inflation as a result of the single spine assimilation, the 2006 pay award, and the recent filling of posts for the RAE census date. Some non-pay costs - notably energy costs - are also rising rapidly. New income, primarily in the form of student fees and research income to cover indirect costs, is not predicted to keep pace, and cost containment will continue to be imperative.

Mr R. J. STIBBS:

Mr Deputy Vice-Chancellor, Professor Minson, and the Director of Finance, Mr Andrew Reid, and his staff are to be congratulated on the Report and Financial Statements, as we now have for the first time a true and fair account of the complete activities of the University of Cambridge.

Back in 1997 the Board of Scrutiny recommended that 'the Council confirm that in future the published accounts of all University bodies will conform to the relevant SORP'. It has been a long hard road but at last we can clearly see the financial relationships between the CUP, Cambridge Assessment, the Trusts, and the rest of the University. We also congratulate the Director of Finance on providing the segmental analysis that ensures that the consolidation process has not obscured individual outcomes.

The Board have had a preliminary and very helpful discussion with the Director of Finance regarding small infelicities in the presentation, and will report more fully following further discussion.

We also await the full implementation of CHRIS which will allow in future reports, the publication of accurate statistics on numbers of different types of staff.

For the second year we wish to concur with Professor Minson's warnings that a possible major risk to the University's finances lies in USS pension liabilities, although this is a risk that is shared across the Higher Education community.

Professor G. R. EVANS:

Mr Deputy Vice-Chancellor, there is a distinct challenge to HEFCE before us for Discussion today: '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.'

I remember some years ago seeking to speak on governance issues in discussing this Statement, then called the Annual Accounts, and having a debate in this forum with the then Vice-Chancellor's Deputy about the relevance of my remarks. I imagine everybody is now only too well aware that the prolegomena to the text we are discussing constitute a required statement to HEFCE about the adequacy of Cambridge's governance arrangements to 'assure' HEFCE that it is safe to give the University public money.

HEFCE wrote to Oxford on 10 January. The letter may be accessed via a blue link in the [Oxford] Vice- Chancellor's summary of the Council meeting of 15 January on the Oxford intranet. It is hard to understand why HEFCE should so intently focus on one point of governance, and seek to insist on a majority of external members on the University's Council, against the democratically expressed wish of Congregation not to adopt this proposal. I should perhaps emphasize at this point that from what I hear the Cambridge externals are a good thing. I do not wish what follows to be taken as a criticism of these individuals, merely a comment on the case HEFCE makes for insisting on a majority of externals, and its idea that this is so much the best way to run a university that nothing else may be allowed.

This is all of urgent importance for Cambridge. HEFCE has got itself into a position where it will have to take the same line with Cambridge as it has been doing with Oxford. The HEFCE letter to Oxford tries to be intimidating. There is mention of 'conditions of grant'. This was language used in the letter to the Warden of New College read out by a member of the Council in the Oxford debate of 14 November, which can be read on the web in the Gazette of 23 November. 'We set the accountability framework for the HE sector, and within that framework it is a condition of grant that the University has a sound system of governance.'

I made an FOI request (complied with on 6 December 2006, HEFCE reference INHSE/FOI/13375), which revealed that only twice, in the case of institutions in financial crisis, have specific conditions of grant ever been applied (in institutions with sector norm governance), and those were financial not to do with governance arrangements. HEFCE states in its letter to Oxford that: 'The HEFCE uses its general powers to impose conditions of grants whenever it allocates funds to institutions. This is in line with the Financial Memorandum (HEFCE 2003/54).' But there is no express requirement which is itself a condition of grant that there should be a single governing body with a majority of external members, so why hint that there is?

I hope Cambridge will stand firm on the assertion with which I began this speech. HEFCE tells me that what it has written to Oxford is not for 'debate'. It may find it is wrong about that.

Members of the Regent House will be aware that the 'Statement of Responsibilities of the Council' we are discussing is also a challenge to HEFCE's expectations. This is supposed to be called a 'Statement of Primary Responsibilities' according to the Lambert/CUC Code and it is supposed to include aspects which are conspicuously missing from the Cambridge statement. Among these is the responsibility of ' monitoring institutional performance against plans and approved KPIs'. KPIs are Key Performance Indicators and there is now a CUC 'Report on the Monitoring of Institutional Performance and the Use of Key Performance Indicators', November 2006. It encourages the use of 'traffic lights' and 'dashboards' for running institutions of higher education.

I wonder if anyone at HEFCE has chuckled at the irony. Governors with 'external' experience turn out to need their hands held: '1.21 The aim of the guide is … to provide high-level advice and support to governors who: may not have a detailed life-long knowledge of higher education; can (understandably and properly) devote only a limited time to their institutions in between formal board and committee meetings;' but despite these disadvantages 'wish to make a full strategic contribution to the success of the institution.'

These external governors in their majority position on all university governing bodies except those of Oxford and Cambridge: '1.20 … are naturally cautious about challenging the advice from the senior managers, and they find that even business-related issues like pay, pensions, financial accounts and strategic plans seem to come with a special higher education context, and to generate voluminous documents.'

It is proposed that this little difficulty be got over by providing the convenient small briefing packs on which I touched in my speech on the Annual Report of the Council, so that the majority of externals can govern their university by 'one-page summary'.

At the same time as encouraging less onerous requirements for busy externals, the CUC has also put out a draft report on Appraisal of Governors which suggests that their effectiveness is not being assessed very thoroughly. This too reads like satire.

'It is evident from the responses that the appraisal/review process in some HEIs is fairly minimal … In some … HEIs the effectiveness review of individual members seemed, at least according to the evidence submitted, to amount to little more than the formal collection and reporting of attendance … It should be noted that effectiveness review processes need not involve the individual being reviewed in any direct way … '.

'In one HEI the appraisal/review process was in fact a self-assessment process. The individual member was invited to comment, on a printed pro-forma, on 28 specific statements and then consider 8 more general questions on performance, motivation, etc. Members were asked to inform the Clerk that they had undertaken the self-assessment but were not required to submit any details … '

The contrast is explicitly drawn with appraisal in the normal understanding of the term: 'The word 'appraisal' has specific meanings in the context of human resource management. It will generally describe a rigorous annual process of employee performance assessment, development and review, supported by (sometimes extensive) paperwork, in the context of appropriate corporate, departmental, team and individual objectives, and sometimes linked directly to pay and reward … However, neither the full 2006 Governance Questionnaire, nor any of the follow-up enquiries, has revealed the existence of anything remotely resembling an appraisal system, in the sense in which the term is defined above, for Governing Body members.'

The somewhat feeble conclusion is arrived at that 'it is actually too early to be certain that these processes are even necessary'. In any case, 'all respondents stressed the importance of strict confidentiality' when it came to 'appraising governors'.

So I hope Cambridge will stick to the insistence in the Report we are discussing, that it should continue to run its own affairs even if it does mean a 'debate' with HEFCE at the imminent assurance visit. A majority of externals required to do no more than read a single sheet of paper for a meeting, wholly trusting of 'senior management' and subject to no assessment of their own 'effectiveness', is not an enticing prospect as a replacement for our own dear Council.


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Cambridge University Reporter 14 February 2007
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