Cambridge University Reporter

Twelfth Report of the Board of Scrutiny

The BOARD OF SCRUTINY begs leave to report as follows:

1. The Board of Scrutiny could be described as the University's 'watchdog body'. It forms part of the official mechanism for ensuring that the University is run in a way that is transparent and is accountable to the governing body of the University, which is the Regent House. It comprises eight directly elected members who serve for a period of four years, and the Proctors and Pro-Proctors (who are nominated by the Colleges and formally elected by the Regent House). Of the members who are directly elected by the Regent House, four retire and four new members are elected every two years. Further information is available on

2. The Board has a statutory obligation 'to scrutinize on behalf of the Regent House':

It also has 'the right of reporting to the University on any matters falling within the scope' of this scrutiny and has the power to inspect any documents that are relevant to any enquiry that it is empowered to make. The Board, with the best interests of the University in mind, aims to carry out its functions in a constructive manner. Since its inception, the Board's practice has been to publish a single Report exploring the themes that emerge from these official documents, rather than a series of separate Reports on Reports. This Twelfth Report follows this tradition.

3. In carrying out these functions during the academical year 2006-07, the Board met fortnightly during each Full Term, with four extra meetings during June and July, to finalize its annual Report. It held meetings with the Vice-Chancellor ('VC'), the Pro-Vice-Chancellors ('PVCs') for Education, Planning and Resources and Personnel, the Registrary, the Director of Finance, the Director of Personnel, the Academic Secretary, Mr Nigel Brown (an external member of the Council), Dr Christopher Padfield (Director of Strategic Development) and Mr John Payne (Interim Assistant Director of Personnel). From time to time it has requested information and/or papers from these and other persons concerned in running the University. To all of them, the Board is grateful for the time and help they have given.

4. The Board was provided with part-time administrative assistance this year by Miss Emma Easterbrook, whose help has been invaluable.

Responses to the Recommendations of the Eleventh Report

5. In its Notice of 11 December 2006,2 the Council responded to the recommendations made in the Board's Eleventh Report. The Board welcomes the positive response of the Council and the acceptance in principle of the majority of its recommendations. The Council disagreed with the Board's recommendation that 'the University should contain the rate of expansion of its administration, both in terms of head-count and cost, within the rate of growth of the University as a whole', stating that:

The Council give careful scrutiny to expenditure on administration in the University, but believe that expenditure must be judged against administrative need and do not consider that any absolute principle of the sort recommended should be applied. The Council have recently welcomed the initiative by the Registrary to undertake a development programme, within existing budgetary provision, for the Unified Administrative Service, some aspects of which will be implemented in 2007.

6. The Board's comments on the plans to reform the Unified Administrative Service ('UAS') are discussed in paragraphs 19 to 24 below.

Financial Matters

The University Budget

7. The Board welcomes the University's first set of fully consolidated accounts, and notably the statement in the Independent Auditors' Report on the Financial Statements of the University that 'the financial statements give a true and fair view of the state of affairs of the University and the Group as at 31 July 2006'.3 The Board wishes to congratulate the Council, the Director of Finance and his staff on this achievement. The accounts now comply with applicable United Kingdom accounting standards.

8. Consolidation also brings its own complications. As the Board has noted in previous Reports, the existence and size of the surplus or deficit have depended on whether one is looking at the University on its own ('University'), or the University and its subsidiary undertakings and related entities ('Group'), notably University of Cambridge Local Examinations Syndicate ('UCLES') and Cambridge University Press ('CUP'). University accounting has also traditionally distinguished between Chest and non-Chest.4 Here again, the out-turn (predicted or actual) may differ depending on whether one is considering only the Chest or the aggregate of Chest and non-Chest income and expenditure. These distinctions make comparisons complex and have led to a plethora of numbers, which, despite continuing progress in the presentation and accessibility of the financial statements, do not always make easy reading for those members of the University who are not closely involved with finance.

9. A first reading of the financial statements for the year ended 31 July 2006 suggests an improvement in the Group result from continuing operations before exceptional items (i.e. the underlying operating result, before asset sales or similar one-off items) from a deficit of £2.7 million in 2005 to a surplus of £8.3 million in 2006. The surplus on continuing operations after minority interest rose from £7.4 million in 2005 to £15.5 million in 2006.

10. This overall improvement appears at first glance to have masked a deterioration in the core business of education and research. Note 11 to the accounts shows a fall in the surplus on education and research activity from £16 million in 2005 to £10.8 million in 2006.5 This figure may however have been arrived at after internal transfers. A reading of the Financial Management Information for the year ended 31 July 2006 suggests a more optimistic view:6 the segmental reporting in respect of academic activities shows a rise in the surplus on continuing operations before exceptional items from £2.6 million for the year ended 31 July 2005 to £7 million to the year ended 31 July 2006. The difference between 'education and research' and 'academic activities' is not immediately clear. The Board acknowledges the difficulty in presenting complex segmental information in a comprehensible manner. Much progress has again been made in 2006 in the presentation of financial information, and the Board recommends that efforts continue to be made to achieve a more accessible presentation of information across the Annual Report of the Council, the financial statements of the University, the Report of the Council on the financial position of the Chest and the associated Financial Management Information.

11. In June 2006, the Council projected a deficit on the Chest of £0.8 million. The latest forecast (31 May 2007) for the current financial year predicts a Chest deficit of £9.5 million. The deterioration is almost entirely due to delays in the implementation of full Economic Costing ('fEC'). The 2007 Allocations Report makes no predictions for the outcome for the combined Chest and non-Chest result for the current financial year (2006-07). The projected combined result has however been sharply reduced for both 2007-08 (a deficit of £5.8 million is predicted in this year's Allocations Report, as against a surplus of £11.2 million in last year's Report, an adverse variance of £17 million) and 2008-09 (a predicted surplus of £3.3 million, down from £16.1 million in last year's Report, an adverse variance of £12.8 million). The Allocations Report forecasts recovery to a combined result of £20.1 million in 2009-10 (a positive variance from last year's Report) and a further rise to £28.3 million in 2010-11. The Board understands the reasons behind the adverse variances in years 2007-08 and 2008-09 and recognizes that any discernible upturn will remain dependent, inter alia, on strict expenditure controls. The Board notes that the projected 2007-08 deficit of £5.8 million is before a transfer of £4.4 million from reserves, primarily from a fund designated for the replacement of the telecommunications system. See paragraphs 49 to 50 below.

12. The out-turn for HEFCE funding has been close to expectation. HEFCE funds for teaching will rise by 4.6%. The Board notes however that, had it not been for a provisional special allocation 'to support very high cost and vulnerable science subjects' of £1.1 million, the allocation to teaching funds would not have kept pace with inflation.

13. The annual planning round continues to be the major mechanism for developing the University's academic strategy. A prominent feature emerging is the desire to develop more inter-disciplinarity in both teaching and research. There is a recognition, in both the centre and within Schools, that this needs to be achieved by improved collaboration rather than duplication. The co-ordination of effort will be challenging, but the Board believes it to be essential if these initiatives are to achieve optimum success as well as best value.

14. At the projected 2010-11 level of surplus of around £28 million, the University will still barely generate sufficient levels of revenue and cash to strengthen its reserves. It will take several years to make good the depletion of the Quinquennial Equalization Fund ('QEF'), given that the current deficit of £35.4 million will only reduce to £12.1 million by 2010. The variation in the year-on-year forecast is also telling. Last year's Allocations Report forecast a QEF deficit of £7.3 million for 2009-10. In this year's Report, the 2009-10 deficit forecast on the QEF has been increased to £24.4 million.

Financial risks

15. The Board, along with the Central Bodies, has consistently identified pensions as one of the most significant risks affecting the future finances of the University. The University's main schemes are the Universities Superannuation Scheme ('USS') and the Cambridge University Assistants' Pension Scheme ('CPS'). The Board shares the Council's concern that the 2008 actuarial valuation of the USS may have a substantial adverse effect on the University. The 2006 actuarial valuation of the CPS shows a deficit of £8 million, which is expected to be cleared by 2010 at the current rates of contribution.

16. HEFCE's future actions remain an area of uncertainty. Changes to allocations to both teaching and research could have a material impact on University finances, with the research element in particular affected by the outcome of the 2008 Research Assessment Exercise ('RAE').

17. The Board notes the Council's comment that SRIF (Science Research Investment Fund (managed by HEFCE)) funding for capital expenditure may not continue beyond 2010. If no such funding is forthcoming, it appears unlikely that the current or projected level of cash generation will be sufficient to maintain the current level of expenditure. The stated objective of the introduction of full Economic Costing ('fEC') was to put University finances on a sustainable basis. The Office of Science and Technology's ('OST') and Treasury's intention was that government departments and commercial enterprises commissioning research should pay the fEC, while Research Councils paid only 80% of fEC in the first instance. The Board understands that the Higher Education ('HE') sector is experiencing resistance from some major commercial sponsors, who are refusing to pay the fEC of research, and that many government departments are also still paying only 80% of fEC. Under these conditions sustainability will not be achievable. It is to be hoped that the Treasury recognizes that withdrawal of funds from SRIF and other sources underpinning the HE sector should not take place until the on-going funding of both research and teaching actually achieves the level required for full sustainability.

Administration and Governance

Statutes and Ordinances

18. The Board welcomes the Council's agreement with its recommendation that the Ordinances should be thoroughly updated to ensure that they fully reflect Graces that have been approved and expresses the hope that this work can be done expeditiously.

UAS Reform

19. The Board has been concerned in recent years at the rate of expansion in the University administration. It has previously pointed out the rapid growth in administrative staff numbers, but precise total figures have been impossible to obtain. The Board therefore welcomes the request by the Council and the Planning and Resources Committee ('PRC')7 for further analysis into the 50% increase in academic-related staff numbers over the last five years when the number of academic staff has remained stable. The fact that the Council has requested these data suggests that they have not been available in the past. In this context, the Board is surprised by the response of the Council to the recommendation in its Eleventh Report referred to in paragraph 5 above. The Board recommends that the results of this analysis be published.

20. It is perhaps significant in this context that the costs of administrative pay rose by 10.4% in the year ended 31 July 2006, while academic pay costs rose by 3.6% for the same period. The Board has noted in previous Reports that the University's administration has been expanding at a faster rate than the University as a whole for several years. This has prompted questions within the University as to whether the administration is in control of its size and shape and whether it offers value for money. There is also a perceived absence of accountability to key stakeholders within the University.

21. The Board therefore encourages the newly appointed Registrary to undertake further work on the extent to which further organizational and structural change in the UAS is required. The current proposals involve the creation of two new senior posts, the reorganization of senior management within the UAS and the rationalization of reporting lines to the Registrary. The Registrary continues to assure the Board that this process will prove budget-neutral over the medium term, with incremental costs being met from discretionary reserves in the immediate term and by efficiency gains thereafter.

22. These changes are intended to provide clearer leadership in the administrative domain and more emphasis on transparency, efficiency, accountability and value for money. The Board agrees that transparency, accountability and especially the perception of a value-for-money service to the wider community are both necessary and desirable. It welcomes the proposals for improved reporting and recommends that all formal annual or similar reports be made available to members of the Regent House.

23. The Board is aware that certain proposals which relate to Non-School Institutions do not form part of the current reforms, following a process of consultation both with those Institutions and more generally. The Board is pleased to note that it appears that the views that emerged from this consultation were taken into account by the Registrary in formulating his proposals. In its Tenth Report, the Board recommended that 'any reorganization of Non-School Institutions should focus only on areas where expectation of an improvement in performance and value-for-money can be reasonably demonstrated'. The Board continues to hold that view and maintains the recommendation.

24. The Board also recommends that the newly appointed Registrary be given the opportunity to review the proposals prior to their implementation.


25. The Lambert Review noted that 'Oxford and Cambridge work largely outside the governance systems which apply to most universities. The reasons include the important role of independent colleges in the affairs of both universities and the fact that they come under separate parliamentary legislation.'8 The Board agrees with the report of the working party convened by Lord Wilson of Dinton that 'the objective of good governance in Cambridge is the long-term prosperity of the University as a world-class institution on the basis of excellent research, outstanding teaching and academic freedom.'9

26. Whilst the University cannot be impervious to outside pressures for change, the Board believes that, as long as the University retains its reputation for leadership and excellence, such pressures should not become overwhelming and that the University should be able to retain control over its governance agenda. The Board welcomes the recent Green Paper issued by the Council on 'Developing governance by building on good practice' as a positive step in advancing the necessary debate on governance and in involving the wider community in that debate. The Board has commented in the past that items of major significance have not been allowed adequate consultation with interested parties and believes that documents of this nature are helpful in informing debate and decision on far-reaching matters of this kind. The Board hopes that the newly appointed Registrary will also have the opportunity to contribute to the discussion of this paper.

27. The Board regrets the fact that certain sections of the press took a negative view of this development, with one national newspaper observing that 'Cambridge has quietly shelved the issue by agreeing to increase the proportion of outsiders on its governing body (sic)'.10

28. The Board has responded separately to the Green Paper.11 The Board supports an evolutionary, rather than a revolutionary, approach to the question of governance and agrees with the approach of the Council to the extent that it complies with the guidance laid out in the relevant Annexes. The Board welcomes the emphasis on governance being driven by purpose and effective policy, rather than by structural change for its own sake. It agrees with the Green Paper's implied view that the main objective of the University must be to achieve a system of governance which it can demonstrate to outside bodies as being fit for the purpose of excellence in the University's own circumstances, rather than merely complying with a general identikit.

29. The Board favours a maximum number of four external independent members, in order to allow the external members scope for diversifying and/or sharing their responsibilities, without upsetting the balance of Council in favour of those actively engaged with its core activities. The Board recognizes that this will necessarily result in an increase in the number of unelected members of the Council but, with 16 members of Council nominally elected by the Regent House in the different classes,12 it does not believe that this will have a significant effect on the overall balance of the Council.

30. The Board does not support the election of an external member of Council as Chairman, being of the opinion that the VC is more likely to be abreast of current issues than an external member. The Board believes that a Deputy Chairman, elected annually by the Council, should take the Chair in the absence of the VC and when issues arise on which the VC might be 'conflicted'. The Board has no strong views on whether this post should be held by an internal or external member of Council.

31. The Board notes with interest the comments of the Wilson Report on the operation of the Regent House: 'the Regent House should also act as a forum for addressing the major strategic issues which face the University and for reflecting the main body of academic opinion. It is not clear from the record of Regent House's proceedings that it is performing these functions as well as it may or as its members would wish'.

32. The Board agrees with the recommendation of the Wilson Report that 'more use of green and white papers for issues of major importance in the business of the University, and of the internet and other channels of communication as well'.13 The Board shares the view expressed that 'a substantial and important body of people working in the University … have no involvement in the Colleges and no understanding of the running of the University, although it affects them'.14 If progress on governance is to be achieved, it will be necessary to re-engage with this body and re-involve them with the decision-making process. The operation of the University as a whole is critically dependent on the willingness of individuals to devote their time to the various bodies, structures and committees that ensure the University remains a successful self-governing body of academics. This may well require a review on how the Regent House conducts its business and whether its current composition accurately reflects the needs of the University.

Reform of Statute G, II

33. The Statute governs financial relations between the University and the Colleges, in particular the system of annual College contributions to the Colleges' Fund. This is currently undergoing a process of reform. The Board understands that a formal complaint has been registered with the University regarding this process and it is therefore inappropriate for the Board to comment in detail.

34. The Board however understands that a further, more radical, revision of the system is in the process of consultation and welcomes the prospect of a reform that will bring the system more in line with the current context of College finance and investment. Many Colleges have moved to total return investment, blurring the distinction between College income and capital on which the traditional system of contribution is based. The Board understands that the proposed new system will be largely based on the capital assets of Colleges rather than on income assessed under the traditional system. The Board believes that this will represent a positive step in ensuring an appropriate and steady flow of funds to the less well-endowed Colleges.

Estate Planning

35. The Board notes with interest that the quality of the University estate is ranked second in the Russell Group.15 In its document entitled '2005 Estate Strategy', published in June 2005, the Estate Management and Building Service ('EMBS') states that 'before the next Estate Plan in 2007, it is planned that there will be an overall review of the University Estate so as to enhance its sense of operational and environmental cohesion.'16 The Board has commented in previous Reports that important decisions about the utilization of central sites, in particular the Old Press Site, the New Museums Site, and the Downing Site, will need to be made within the next few years. These are critical issues for the future shape of the University that need to be widely considered before major decisions are taken.

36. The Board understands from the EMBS that this review will now include the development of a Strategic Implementation Plan that is intended to review and prioritize future building projects in the context of the long-term needs of the University. The Board welcomes this review and recommends that it be published when completed.

37. In its Eleventh Report, the Board recommended that the Council should actively engage the University in developing proposals for North-West Cambridge. The Board welcomes the response of the Council that a North-West Cambridge Strategy Group, chaired by Mr Alexander Johnston, an external member of the Finance Committee, has begun work and will wish to engage in extensive consultation within the collegiate University. The Board recommends that the forthcoming consultation process includes a Green Paper and a further Report to the Regent House before the outline planning proposal is finalized and submitted.

38. The Board understands that there has been recent progress on the Joint Area Action Plan being developed by the local authorities. The emerging preferred option, if adopted, is likely to require some significant rethinking on the part of the University. However, since the process is likely to require a considered response to planning authority proposals on a short timescale, the Board would like to see the Strategy Group's work becoming more visible. For example, its membership is not known. The existing website might be kept updated and further developed for engaging the University community in the planning process.17

Administrative Systems


39. The University's Risk Register18 refers to the risks associated with administrative systems, whether these be financial, Cambridge University Financial System ('CUFS'), student records, Cambridge Student Information System ('CamSIS'), Payroll and Human Resources ('HR'), Cambridge Human Resources Information System ('CHRIS') or telecoms and library systems. The Risk Register gives a succinct and helpful analysis both of Risk Indicators and the Control Measures associated with the University's administrative systems. It is clear that many lessons have been learnt from the development and implementation of CUFS (CAPSA as was), notably the establishment of governance procedures for similar, large scale projects. That the University is capable of implementing widely used and cost-effective administrative systems has been amply demonstrated by Cambridge Colleges' Online Reporting System for Supervisions ('CamCORS'),19 the Jackdaw database (which has been in operation for a number of years) and indeed the Cambridge Colleges' Administrative Software Consortium ('CASC') system widely used by College Tutorial and Admissions Offices.

40. At the time of writing of this Report, CHRIS (the Payroll and HR system) has gone live after a successful development of the core functionality. This was five months later than the scheduled January rollout but the Board commends the Project Board's decision to adopt the principle that 'we will go live when we are ready and not before.'20 The Board notes that the project has coped successfully with the complexities of the new pay and grading structures (see paragraphs 51 to 71 below) and hopes that the success shown thus far will continue as CHRIS starts to have an effect on the daily processes in Departments. It notes that the non-core but useful implementation of the Training Courses modules has been postponed sine die to allow concentration on the core functionality.

41. The Board cannot however be as sanguine about CamSIS. It notes that the Council's Report for 2005-06 merely commented that CamSIS, the student information system, 'is operational and will be rolled out to further University institutions and Colleges over the next few years'.21

42. The Board recognizes that CamSIS is probably the most complex systems implementation project that the University has undertaken and that, to an extent, certain difficulties were inevitable. During this year however, the Board has become aware of significant problems with CamSIS. The most visible of these problems has been the ten-month delay in the production of the 2005-2006 Student Numbers issue of Reporter expected in August 2006 and published on 31 May 2007, with a subsequent correction necessary on 6 June 2007. The lack of these data has caused various knock-on effects on financial transactions around the University and Colleges. There have also been problems and delays in the production of statistics for the Higher Education Statistical Agency ('HESA'), which appeared at one point to have substantial adverse financial consequences for the University's receipts from HEFCE, although the Board has been assured that these problems were subsequently corrected.

43. The Board also notes a footnote headed 'The University of Cambridge-2005/06,' in the HESA Press Release PR110 dated 17 April 2007, which states:

The University of Cambridge has taken the opportunity of a new student record system to review the recording of student data. The Head of Planning and Resource Allocation at the University of Cambridge should be consulted about significant variances when comparing data for 2004/05 and 2005/06 or using 2005/06 data where there are particular sensitivities. These sensitivities include postgraduate research and postgraduate taught totals; 'other postgraduate' and 'other undergraduate' totals; clinical medical FTEs [Full Time Equivalents]; data relating to new entrants; and sources of financial support for postgraduates.

The Board is disappointed by the existence of such 'sensitivities', believing that they are a potential source of embarrassment to the University. The Board understands that these data quality issues are being addressed and are expected to be resolved over the summer.

44. There were also problems in the Universities and Colleges Admissions Service ('UCAS') data-feed around 'A-Level Sunday' in August 2006, and a serious loss of confidence between the CamSIS team and the CASC Colleges, which appears to have resulted from a lack of consultation about re-allocation of resources due to the need to take 'UK Localization' work in-house. The Board is also aware of issues relating to the 'employability' league tables due to a low quality of graduate statistics and problems relating to first preference graduate candidates at the women-only Colleges. The Board understands that the failure of a key supplier to develop the appropriate software exacerbated a complex situation but finds it difficult to avoid the conclusion that there has been inadequate resourcing and an overall failure of project management.

45. These problems are compounded by significant usability issues. The summary of a Report entitled 'Usability Issues in the CamSIS Implementation' written in April 2006 by Dr Alan Blackwell, Senior Lecturer, Human-Computer Interaction, University of Cambridge Computer Laboratory states:

At the end of phase I in the CamSIS project, the system had severe usability problems. These arose from cost and management decisions, not technical issues. In phase II of the project, it is technically and economically feasible to rectify these problems. At the time of writing, although phase II is nearly ended, work has not yet started on usability, and no budget has been allocated to it. My opinion is that such work would be relatively inexpensive, while offering substantial benefits. Even at this late stage, the advantages of improving usability greatly outweigh the costs. The cost of modifying the user interface, although not anticipated in the project plan, is not high - it would be comparable to the cost of unexpected technical problems and other changes in plan that might be expected in a project of this size.

46. This view is confirmed by a May 2007 Draft Usability Report commissioned by the CamSIS project from external usability consultants looking at the use of the system by Directors of Studies. This confirms that the usability of CamSIS for Directors of Studies, deemed to be representative of the 'occasional user' group most at risk of rejecting the system, is 'low' (on a scale of low, medium and high) for twelve different criteria. The Board understands that the 'UK Localization' problems referred to above have delayed work on usability, but that the Project Board has no substantive disagreement with either Dr Blackwell's or the consultants' reports.

47. The development methodology for the project involves the Project Team, a Project Board, various Special Interest Groups ('SIGs') and a User Group. The SIGs and the User Group produce excellent minutes and papers,22 whereas the minutes of the Project Board have a restricted circulation and have not been published on the CamSIS website. The Board has been assured that these minutes will be published in future, with any commercially sensitive material removed. At the time of writing, the project also lacks a full-time Project Director. Following the retirement of the incumbent in Michaelmas 2005, the task of acting Project Director was taken on by the Director of Management Information Services Division ('MISD'). This appears to depart from MISD's own governance guidelines, as set out in the 'Organization Structure for Management Information System Projects', which states that:

The Project Manager is accountable to the Project Board for the delivery of the Project. In some cases a Project may be of such a scale and/or risk that it merits the appointment of a Project Director. In this case the Project Director will take direct line accountability to the Project Board and the MISD Director will take the role of adviser to the Project Director.23

48. The Risk Register names the Registrary as the owner of the risks associated with CamSIS. It is therefore unfortunate that these serious questions about CamSIS arise when there is to be a new Registrary and a new Director of MISD. The cost implications of bringing the project up to an acceptable standard of usability and functionality are unclear, but the Board understands that the view expressed above by Dr Blackwell is consistent with that of the Project Board. The Board recommends that the newly appointed holders of the posts review with some urgency the governance and implementation aspects of CamSIS, and whether there are likely to be any cost increases incurred in bringing the system up to standard that could affect the long term cost-effectiveness of the project.

Telephone Replacement Project

49. The Board notes that the current University telephone system is due to shut down in December 2009, by which time a new system must be in place. The capital cost of the new system has been estimated at around £5.4 million. This estimate does not however include any allowance for institutionally localized costs. For example Departments and Colleges will either have to install analogue-to-digital converters or purchase new handsets; in addition, many buildings will require data network upgrades. It has not been possible to quantify these costs at the present time. They will however be substantial.

50. The Board understands that whilst there appear to have been some delays in the implementation of the new system associated with a change of consultants, these have not necessarily been unhelpful as there have been positive developments in the proposed Voice over Internet Protocol ('VoIP') technology in the meantime. The Colleges were approached in May 2007 with a view to assuming around 40% of the capital costs of the new system and have agreed to do so. Consultation within the University is taking place at the time of writing. Given that the supplier selection is due in July 2007 and contracts are due to be signed in September 2007, the timetable appears tight. The Board may wish to return to this subject in future reports.

Pay and Grading

51. Since November 2005, the University has been working seriously on implementing the assimilation of all staff onto the single pay spine. Under the Framework Agreement between the Universities and Colleges Employers Association ('UCEA') and the unions, the deadline for assimilation of all staff onto the Single Spine was 1 August 2006. The process is now substantially complete, although some cases are awaiting the outcome of reviews and appeals. The journey has not been an easy one. A total of 8,600 posts were assimilated, of which 3,700 could not be described by generic role profiles and so were assigned to new grades by a matching process. The Board wishes to acknowledge the extremely hard work in difficult circumstances put in by all the staff concerned.

52. For academic and research jobs, generic role profiles were provided and Higher Education Role Analysis-scored ('HERA'), and staff were mapped across onto the appropriate new grade. Academic-related and assistant posts were matched by creating a job description, the PD33 form. Each role was subsequently matched by a panel to one of a set of HERA-scored job descriptors produced by the Personnel Division.24 Moderation then took place at both School and University level. There is provision for staff to ask for a review of their outcome, and subsequently to appeal.

53. The Board has previously noted the risks to the University of failing to carry out this process in a way that seemed to all staff to be fair and transparent.25 Unfortunately the process has not been perceived as successful by many staff, particularly academic-related and assistant staff. For example, the Board is aware of an informal survey carried out amongst IT staff which shows that just under half the respondents were dissatisfied with the process and a further quarter were only partially satisfied. Staff morale has consequently been affected.


54. The main channels of communication with staff about the process were the Pay and Grading website, a series of road shows held in 2005, a newsletter (Staff News) circulated to Departments approximately monthly in electronic and hard copy form, and the letters sent to individual members of staff with their matching outcomes, with attached guidance notes.

55. Problems with communication fell into two areas: insufficient information, particularly when the timetable started to slip, and lack of clarity in some of the information sent out. The timetable for assimilating staff slipped back during the project due to a lack of resources in the Pay and Grading team, despite extremely hard work on the part of the staff concerned. The only means by which this was actively communicated to those awaiting their outcomes was through Staff News. This was sent to Departments to distribute, but it did not always reach all staff. The lack of information about delays caused undue concern to many staff: no news is not always interpreted as good news.

56. Some staff had difficulty in interpreting their outcome letters as there was no clear statement in their personal letters that the outcome was red-circle, green-circle or neither. Although Departments were informed in advance of which staff had been red-circled, not all Departments took action to ensure that the people concerned understood the position.26

57. The Board believes that the University urgently needs to address the problem of how to communicate effectively with its staff. Clearly no single method can be entirely effective for all staff; not every member of staff has access to e-mail, for example, and so a range of methods should be used. The Board also understands that there are technical difficulties that prevent mass mailings to those who do have access to e-mail. It believes that it is better, in such cases, to err on the side of too much communication than too little. The Board welcomes the news that the new CHRIS system (see paragraphs 39 to 40 above) will enable messages to be included in individual pay slips and recommends that the University should review existing electronic and other means of communication with a view to improving the way it communicates with staff.


58. The Framework Agreement set a deadline of 1 August 2006 for the assimilation process to be completed. The Board has previously noted that the timescale for the work was exceptionally tight,27 and in fact the assimilation process was not complete by the deadline. Arrangements for the final appeal procedure were still under discussion as late as March 2007, although most staff had already received their outcomes by this stage. This has led to confusion amongst staff as to what the process for review and appeal actually is.

59. The Board considers that it would have been better to accept that the August 2006 deadline was ambitious and to accept the possibility of missing it rather than attempting to complete the whole process before the deadline. This would have reduced the pressure on the Pay and Grading team and perhaps have helped with communication. This might have led to the loss of HEFCE funding under the Rewarding and Developing Staff initiative. The Board understands that at least three other Higher Education Institutions ('HEIs') did not implement the Framework by 1 August 2006. It is not known if such institutions have lost any funds as a result.


60. Heads of Institution were asked to ensure that a PD33 was completed for all posts which were to be matched to role descriptors. The Board is aware of an inevitable inconsistency of approach: some staff wrote their own PD33, which was then signed off by their line manager and Head of Department, whereas in other cases, Departments or managers provided PD33s that the post-holder then signed.

61. The PD33 form is vital to the correct grading of a role, especially as the review and appeals procedure offers no possibility of amending an incorrect PD33; the only way to get it changed is for the post to go through the annual re-grading exercise. Training was offered to staff in how to complete the PD33. This was taken up by a large number, but not all. There is some evidence that not all staff were made aware that training was available; the training was advertised through Departments, but again the message did not get through to all staff.

62. The individual sections of the PD33 do not map closely onto the fourteen HERA elements used in the job descriptors, which complicated the work for matching panels in determining a match. It is possible that, with the tight timescales involved, this led to some difficulty in finding the right match for a role.

63. Roles were matched to generic job descriptors. The process of writing PD33s had begun in some parts of the University before these descriptors had been finalized by the Personnel Division. The Personnel Committee agreed not to publish the descriptors before the review stage so as not to disadvantage staff who had already written their PD33s.28 Unfortunately the descriptors began to circulate amongst some groups of staff before all PD33s had been submitted. In consequence, some PD33s were written by staff who had seen descriptors and others by those who had not. This has led to a perception of unfairness amongst staff, particularly as it is not possible to revise a PD33 during the review and appeal process.

64. The Board believes that in the interests of fairness to all staff, descriptors should have been published as soon as they were finalized, and no staff should have had to submit PD33s before these were available. The Board recommends that, in any future situation where staff are asked to provide information for central processing, all should receive full information on the process and its implications before responses are required.


65. Matching was devolved to Schools, which were allowed, although not obliged, to devolve it to individual Departments, as in the procedure laid down in the Second Report.29 Different Departments have handled matching very differently; some have had a single panel for the whole Department while others have had multiple panels within a single Department. This has led to the perception that matching was not carried out consistently between Departments. With hindsight, it would have been better if the Second Report had laid down more precise guidance about the constitution of matching panels.

66. Inconsistencies in matching should have been addressed by the School and University-level moderation process, but there was not enough time or resource to moderate every role. Again, the Board believes that accepting that the August deadline was going to be missed and carrying out more moderation would have been preferable.

67. Some posts which had been matched at a particular grade by Departments were subsequently moderated down at School or University level. If the individual role-holder decided not to challenge their outcome, their Department was unable to do so on their behalf. This could potentially lead to future recruitment difficulties where a post has been downgraded; although it is possible for a Department to recruit to discretionary points, this is only true for an exceptional candidate; it does not address the situation where the Department believes the post is wrongly graded. The only recourse for a Department in this position is to apply for re-grading once a vacancy arises; the Department writes a new PD33 which is then given a full HERA scoring, but Departmental administrators are not currently offered training in HERA. This has led to long delays in grading new posts where a PD33 travels backwards and forwards being amended and scored, until such time as an outcome is reached. This causes problems where a post has time-limited funding. The Board recommends that relevant Departmental administrators should be given HERA training to facilitate the grading of new and vacant posts.


68. The final cost of the exercise as given in the Council and General Board's Notice is £6.23 million, in line with the total costs estimated in their Second Report.30 However this figure only covers the cost of assimilation and green-circling for the first year. In subsequent years green-circled staff will gain service points on the scale and so the final cost of the exercise will be higher (the precise figure is not known to the Board, but is expected to be in the order of £1.5 million per annum). In addition, other costs deriving from the full implementation include market supplements and a significant upwards shift in professorial pay. The initial £6.23 million figure includes about £1 million in additional professorial pay, but the Board expects there to be a further increase in average professorial pay as the new criteria are fully implemented and incremental pay steps within bands are filled; the 2007 professorial pay exercise cost about £1 million more than the previous equivalent (£1.37 million in total). The percentage of professors in band 2 (31%) is now about twice those receiving level 2 supplements (15%) before the new system. The final total cost of implementing the new pay and grading system may well therefore be in the region of £10 million per annum.

Data and Transparency

69. The Board welcomes the data published by the Council and General Board on the implementation of the Single Spine31 and notes that it is subject to change once all appeals and reviews have been considered. The Board has attempted to analyse the results of implementation in greater depth. It felt that it was particularly important to determine whether the exercise has resulted in a fair and uniform system across the many institutions within the University. The use of a common grading and matching methodology was designed to achieve this, but it is inevitable that some matching panels might produce different outcomes from the same input PD33. It was this variation that moderation was designed to address. For this reason the Board requested the Personnel Division to provide data on the effects of moderation. The Personnel Division has taken the position that it will only provide this information when the entire process is fully completed. However, the information sought by the Board concerned the effects of an intermediate stage which was complete for almost all staff (>99%) at the time of its request. The Board regrets that it was unable to obtain these data in order to make timely conclusions.

70. The Board also wished to reassure itself that the outcome had not selectively advantaged or disadvantaged any particular group of staff relative to others. For this reason, the Board also requested the Personnel Division to provide the number of red-circled and green-circled staff broken down by role and grade; unfortunately it has been told that these data also cannot be provided until final completion. The Board believes that it is vital that these data are made available in as much detail as practicable so that all staff can clearly see the outcome of the process; while it acknowledges that producing the data requires some effort, the Board notes that it was considered possible to provide the number of red and green-circled posts broken down by School in the Notice published on 2 May 2007. It is extremely regrettable that the alternative analysis was not produced or published with the rest of the implementation details.

71. During the consideration of the Second Report on the implementation of the new pay and grading system, the Board pressed for more transparency in the resulting new pay system. The original proposal would have had the effect of substantially reducing the information available to staff about the base pay for offices and grades throughout the University, in particular for senior staff. In response to amendments proposed by members of Regent House to some of the Graces designed to approve the new system, the Council proposed amendments to Graces 7 and 9 of 27 July 2005.32 The Council's amendments contained specific statements of the information that the University will publish on the distribution of staff on the new pay spine (broken down by School, staff category, grade and gender) as well as on additional payments including market supplements. These amendments were approved in the subsequent ballot. The Board welcomes the information published in the Council's Notice of 23 April 2007 and looks forward to the publication of the detailed data referred to above as soon as possible. Inevitably such data will be a snapshot and it is for this reason that it should be repeated annually. The Board does not therefore believe that it is necessary to wait until the last appeal has been held before the first such Notice is produced. The Board recommends that the University publish detailed statistical information on staff pay, including all the information promised in the amended Graces of 27 July 2005, as soon as possible and annually thereafter.

Oriental Studies

72. The Board's attention was drawn to the distress caused to University Teaching Officers ('UTOs') within the Faculty of Oriental Studies by the procedures adopted by the General Board's Full Review Committee and their Advisory Group. In particular, the lack of clear and proper information as to why the Review had been brought forward, and why it was a Full Review, generated a considerable amount of suspicion on the part of UTOs within the Faculty, a suspicion that increased over time. The reaction that ensued demonstrates the pressing need for greater transparency when reviews of Faculties are brought forward.33

73. The Board notes that the General Board's Notice on the restructuring of the Faculty of Oriental Studies acknowledges that further procedural errors occurred that need to be avoided in future.34 The Board welcomes this acknowledgement. In particular, it welcomes the General Board's acceptance that, in future, the relevant Faculty Board should have 'an opportunity to comment formally, via the Council of the School, on the proposed composition of a Review Committee' and on the Committee's terms of reference and timetable, and also that 'the institution under review will have the opportunity to decide, at the outset, what lines of communication with the Review Committee would best serve its particular circumstances'.35

74. The Board nevertheless notes three procedural issues highlighted by the experience of Oriental Studies that remain unaddressed in the General Board's Notice. First, it is clear that the composition of the Review Committee was mishandled at the level of the School. Since financial allocations to Departments or Faculties are made at School level, there can be a conflict of interest between the Department or Faculty under review and the other institutions within that School. Accordingly, Departments or Faculties facing review deserve a much stronger guarantee of fairness than a mere 'opportunity to comment formally' on the proposed composition of a Review Committee. Second, a key factor in ensuring transparency and equity is the presence and input of qualified external members. The Board notes the strong external representation on the initial Review Committee for Oriental Studies, but regrets that the externals were not involved in the Advisory Group, which subsequently emerged from the Review Committee to work on the implementation of the recommendations of the Review. When major change is being effected and/or when the implementation requires academic judgements to be made, good practice demands that externals be present throughout. Third, there is a lack of clarity as to the difference between a recommendation issued by a Review Committee to a Faculty, and a directive. It is instructive that one of the few recommendations that has not been enforced is the one that would have given Sanskrit a home in the Centre for South Asian Studies.

High Performance Computing Facility

75. The Board notes with concern that the upgrade to the High Performance Computing Facility ('HPCF') in summer 2006 resulted in an unexpected loss of service to research groups. The Board intends to investigate this matter further.

Summary of Recommendations

1. Efforts should continue to be made to achieve a more accessible presentation of financial information.

2. The results of the analysis to be provided to the Council and the PRC into the 50% increase in academic-related staff numbers over the last five years should be published.

3. All formal annual or similar reports on transparency, efficiency, accountability and value for money relating to the UAS should be made available to members of the Regent House.

4. Any reorganization of Non-School Institutions should focus only on areas where expectation of an improvement in performance and value-for-money can be reasonably demonstrated.

5. The newly appointed Registrary should be given the opportunity to review the proposals for the development of the UAS prior to their implementation.

6. The Strategic Implementation Plan should be published by EMBS when completed.

7. The forthcoming consultation process on North-West Cambridge should include a Green Paper and a further Report to the Regent House before the outline planning proposal is finalized and submitted.

8. The newly appointed Registrary and Director of MISD should review with some urgency both the governance and implementation aspects of CamSIS and whether there are likely to be any cost increases incurred in bringing the system up to standard that could affect the long term cost-effectiveness of the project.

9. The University should review existing electronic and other means of communication with a view to improving the way it communicates with staff.

10. In any future situation where staff are asked to provide information for central processing, all should receive full information on the process and its implications before responses are required.

11. Relevant Departmental administrators should be given HERA training to facilitate the grading of new and vacant posts.

12. The University should publish detailed statistical information on staff pay, including all the information promised in the amended Graces of 27 July 2005, as soon as possible and annually thereafter.

Annex A: Glossary of Terms

Allocations Report: An annual Report published in the Easter Term that gives details of the University's budget for Chest income and expenditure, together with an outline of the non-Chest budget.
CamCORS: Cambridge Colleges' Online Reporting System for Supervisions.
CamSIS: Cambridge Student Information System.
CAPSA: Not an acronym but the Latin word for a book storage box, adopted as a name for the project to introduce the University's computerized commitment accounting system. This system developed into CUFS.
CASC: Colleges' Administration Software Consortium.
Chest: An income stream consisting of funding council grants, Home and Overseas fees, endowment income, a share of research grant overheads, transfers from CUP and UCLES, and certain other operating income.
CHRIS: Cambridge Human Resources Information System.
CPS: Cambridge University Assistants' Contributory Pension Scheme.
CUFS: Cambridge University Financial System.
CUP, or the Press: Cambridge University Press.
EMBS: Estate Management and Building Service.
fEC: Full Economic Costing.
FTE: Full Time Equivalent.
HE: Higher Education.
HEFCE: Higher Education Funding Council for England.
HEI: Higher Education Institution.
HERA: Higher Education Role Analysis.
HESA: Higher Education Statistical Agency.
HPCF: High Performance Computing Facility.
HR: Human Resources.
MISD: Management Information Services Division.
OST: Office of Science and Technology.
PRC: Planning and Resources Committee (a joint committee of the Council and the General Board).
PVC: Pro-Vice-Chancellor.
QEF: Quinquennial Equalization Fund: any surplus from the Chest at the end of the financial year is transferred into this fund, which is used to make up any deficit on the Chest in other years.
QR: Quality-related research funding: A component of the HEFCE grant reflecting assessed research quality in a subject, the value of which is the product of a per capita sum reflecting the quality and the number of staff entered into the assessment.
RAE: Research Assessment Exercise.
SIG: Special Interest Group.
SRIF: Science Research Investment Fund (managed by HEFCE).
UAS: Unified Administrative Service (of the University).
UCAS: Universities and Colleges Admissions Service.
UCEA: Universities and Colleges Employers Association.
UCLES: University of Cambridge Local Examinations Syndicate, now Cambridge Assessment.
USS: Universities Superannuation Scheme.
UTO: University Teaching Officer.
VC: Vice-Chancellor.
VoIP: Voice over Internet Protocol.

1 Statute F, I now refers to the 'annual accounts'. The Board's terms of reference under Statute A, VII remain however unchanged.

2 Reporter, 13 December 2006, pp. 222-223.

3 Reporter, 20 December 2006, p. 270.

4 A simplified definition of 'Chest' funds is the core central money which, by and large, the University can choose how to spend. It is allocated by an annual Report of the Council, approved by Grace. 'Non-Chest' covers all the remaining income to the University, which is either received for specific purposes or is spent at someone else's discretion, typically a Department's.

5 Reporter, 20 December 2006, p. 281.

6 Reporter, 19 January 2007, p. 3.

7 Reporter, 31 May 2007, p. 709.

8 Lambert Review on Business-University Collaboration, December 2003, § 7.43.

9 Reporter, 25 April 2007, p. 595.

10 Daily Telegraph online, 16 May 2007.


12 Given the nature of the nomination process that is adopted for the four Heads of Houses (Class (a) representatives), there are in effect only 12 members of Council in the classes which generally require contested election by the Regent House.

13, § 13.

14 ibid.

15 Reporter, 31 May 2007, p. 711.



18, pp. 28-29.



21 Reporter, 20 December 2006, p. 256.



24 Staff were assimilated onto the new pay spine at the spine point equal to or immediately above their previous salary, except those who were green-circled. A post holder is green-circled if their post is matched to a grade whose lowest point is higher than their previous salary. They are red-circled if their post is matched to a grade whose highest point is lower than their previous salary. In this case, pay protection arrangements apply for four years. If no resolution is reached between the post-holder and their institution before the end of this period, pay is adjusted to the highest contribution point on the new grade.

25 10th Report, §36, Reporter, 10 August 2005.

26 Personnel Committee Minutes, 17 August 2006.

27 10th Report, §37 Reporter, 10 August 2005.

28 Personnel Committee Minutes, 20 October 2005.

29 Second Joint Report on Pay and Grading, Reporter, 2 June 2005, Annex 3.

30 The Cambridge implementation of the Single Spine, Reporter, 2 May 2007, pp. 612-63Q0.

31 ibid.

32 Reporter, 19 October 2005, pp. 56-59.

33 Reporter, 7 February 2007, pp. 385-420.

34 Reporter, 2 May 2007, pp. 608-612.

35 ibid