No 6176
Wednesday 27 January 2010
Vol cxl No 17
pp. 497–524
A Discussion was held in the Senate-House. Deputy Vice-Chancellor Professor J. M. Rallison was presiding, with the Registrary, the Junior Proctor, the two Pro-Proctors, and eight other persons present.
The following Reports were discussed:
The Annual Report of the Council for the academical year 2008–09, dated 27 November 2009 (Reporter, p. 295).
Mr P. ffolkes Davis:
Mr Deputy Vice-Chancellor, the period before Christmas was a busy time in the publication schedule of the University Reporter. Apart from the Annual Reports of the Council and General Board, as well as the Financial Statements for the year ended July 2009, we had the Council’s responses to the Board of Scrutiny’s Fourteenth Report, the Annual Report of the Audit Committee, the response to a topic of concern regarding the publication of the report from the committee reviewing teaching and learning support services and the publication of this report itself, and the report of the Discussion of the Joint Report on disciplinary, dismissal, and grievance procedures.
Today’s Discussion concerns the Council and General Board’s Annual Reports and the University’s Financial Statements. However I would like to touch briefly on some of these other topics, to which the Board may well return in its Fifteenth Report, to be released later this year.
The Board regards it as unfortunate that this was only published following its appearance on the internet as a result of a Freedom of Information Act request. The Board is sympathetic with the view expressed by the General Board in its Notice (Reporter, 26 November 2009, p. 256) that it is not current policy to routinely publish such reports before they have been fully considered and a view as to necessary action to be taken formed. However, it notes that the ‘Council and General Board have agreed that the Registrary should consider the general policy on publishing such reports and advise the central bodies appropriately.’ If a new policy is designed, the Board trusts the Regent House will be made aware of it.
The Board is grateful to the Council for its consideration of the recommendations made in its Report, though it regrets that the majority of the recommendations made have either not been adopted, or responsibility for a decision on whether to do so has been delegated to third parties. The Board is pleased the Council endorses its view of the overriding importance of the University’s financial position. Further, it is encouraged by the Council’s statement that it is ‘developing medium- and long-term financial strategies, … and is, as observed by the Board, arranging for particular attention to be given to pension matters.’ I will return to pensions in a moment, but would like first to highlight a theme running through several of the pronouncements of the University’s administration under consideration here. Assurances about ‘addressing’, ‘monitoring’, ‘mitigation’, and general preparedness of the University to deal with current and future strictures of Higher Education funding and the general economic outlook litter the Annual Reports of both the Council and General Board and the Pro-Vice-Chancellor’s (Planning and Resources) commentary on the Accounts. Indeed, the Audit Committee expresses itself ‘confident that the University is monitoring the particular risks posed by the financial crisis sufficiently, both in the areas of investment performance and fraud, and is satisfied that the University’s short- and medium-term planning mechanisms are appropriate for the likely severe funding restraints in the future’ (Reporter, 16 December 2009, p. 424).
Such assertions are gratifying and the Board is aware of the extensive financial modelling that routinely takes place in the Finance Division, but it would just like to remind the Regent House of the concerns it raised in its Fourteenth Report about the dichotomy of the relatively benign short-term financial position and far less sanguine future projections. The Board would caution against any note of complacency that might be detectable in pronouncements in this area, and would be happy to understand more fully the nature and formation of the University’s strategic vision for resourcing beyond the next few years.
In one specific instance, the Board of Scrutiny is glad to have been of assistance in aiding the financial planning process. It has been pleased to note the extensive press coverage given to the prospect of the University issuing long-dated bonds, an opportunity the Board has urged on the University enthusiastically in its last two Reports. The Board has noted the Council’s response (3) that long-term borrowing is under consideration in the current calendar year. The present favourable market conditions cannot last indefinitely (or, probably, beyond the Bank of England’s existing quantitative easing programme), and the Board would recommend the project be pursued with all the expedition of which the University is capable.
The Board of Scrutiny notes the adoption of some of the quality assurance provisions coming out of the Strategic Review of the Institute of Continuing Education (ICE).
The Board is both impressed and alarmed by the University’s response to the termination of the Overseas Research Studentship (ORS) Awards and the reduction in the Arts and Humanities Research Council (AHRC) block grant. The creation of the Cambridge International Scholarships Scheme (CISS) and increased contribution from the Isaac Newton Trust, University, and Colleges to the Domestic Research Studentships (DRS) scheme to compensate are testament to the admirable resilience and generosity of the University’s academic provision, but also of a mindset that expects to substitute locally something withdrawn centrally. The General Board’s Report states: ‘Given current funding difficulties, it is the case that the University will have to look to its own resources, both internal and external, to sustain the flow of outstanding research students…’ There is a wider debate to be had on the future relationship with government funding entities and the future level of fee setting. Here is not the place to have it. The Board merely wishes to call attention to the University’s current default position: needing to manage downwards and replace anything lost from its own inadequate finances. Such a reaction should not be axiomatic.
The Board found the Council’s exposition of its activities comprehensive and clear. It shares the concerns expressed about the two University pension schemes, and I will comment further on these in my remarks about the Financial Statements. The Board welcomes the appointment of its last Chairman to oversee a scoping study to prepare for the revision of Statutes and Ordinances. The call for such an updating has been a constant of its last three Reports. The Board also looks forward with anticipation to the promised Report on the proposed development of the site at North West Cambridge, the capital cost of which is a key use of proceeds being advanced for the mooted University bond issue. The Board notes the University’s intimate involvement in the planned Research Excellence Framework (REF), designed to replace the RAE, and looks forward to the next iteration of the Statute U modernization proposals.
It has become a commonplace for the Board to compliment the Pro-Vice-Chancellor (Planning and Resources) and the University Finance Director on the excellent clarity they have brought to the publication of the annual Accounts. This is no less true of the current Statements and the Board would like to congratulate Professor Steve Young, in particular, for the skill in which he has slipped into an old master’s shoes.
There are few surprises but many concerns. The University remains heavily reliant on the annual transfer from Cambridge Assessment to balance the books, this year receiving £25 million from this source. Cambridge Assessment continues to thrive, especially thanks to what the Report terms ‘the English language business’ around the world. The Board has warned before, though, of the University’s acute vulnerability to any downturn in Cambridge Assessment’s fortunes.
Last year’s restated surplus on continuing operations of £23 million has slid to a £15 million deficit, but this poor performance has been exacerbated by the complications occasioned by the Cambridge Investment Office’s (CIO) moving of the Cambridge University Fund (CUEF) investments away from direct income-yielding assets to more indirect holdings. The total return basis on which the funds are managed has necessitated an accounting change (explained in the Report and Note 7) which has deprived the Income and Expenditure Account (I&E) of roughly £26 million. The CIO itself has done reasonably well, with CUEF performance being off only 11% in the year to June 2009, a time when most indices were much lower. It is also good to see a flexible approach to asset allocation at a time of such market turmoil.
The greatest immediate financial concern remains the University’s staff and pension costs. Academic-related staff costs were up 10.5%, broadly in line with expenditure overall. Income grew 7.3% – though a creditable performance, the trend is unmistakeable. CPS and the Cambridge University Press’s schemes’ total pension liability under FRS 17 have ballooned from £158 million to £258 million in a year. In this period, most Colleges still offering CCFPS have closed this scheme to new members and raised existing employee contributions. The Board understands that such a root and branch overhaul is not under consideration by the University, but that a pensions working group has made proposals to the Finance Committee for changes to the scheme’s terms to ensure its sustainability. It is also becoming clear that USS is developing a substantial deficit and may need to propose a radical restructuring of members’ benefits and contribution rates when the steering group charged with reviewing the scheme’s continued viability reports. Pension deficits are going to weigh heavily on University finances for the foreseeable future.
Professor Young has provided a longer than usual list of risks and uncertainties to the University’s financial position. He concludes his report: ‘the short- and medium-term outlook is extremely challenging as multiple funding streams come under pressure and costs, notably pensions, are uncertain.’ The Board of Scrutiny could not agree more. The challenges facing the University are, however, not purely financial. They also relate to governance and employment issues, and to tensions within the collegiate and Faculty systems and the undergraduate and research ‘universities’. The Board reiterates the need for long-term strategic planning and a leadership ambition to thrive, not just to survive. It expects to return to some of these themes in its Fifteenth Report.
Professor G. R. Evans (read by Mr J. A. Trevithick):
Mr Deputy Vice-Chancellor,
19.1 The Council is establishing an advisory group under the chairmanship of Professor David Yates, Warden of Robinson College and outgoing Chairman of the Board of Scrutiny, to undertake a scoping study to prepare for the proposed revision of the Statutes and Ordinances, to provide a framework for the review.
May we have publication in the Reporter of the report of this group to the Council when it is ready please? The most important function of the Regent House as governing body of the University is that it must grace all legislation (except those pesky Statute C General Board Ordinances). It must have a right to see how it is proposed to redraft and reorganize the tumbled pile of domestic legislation we now have. Experience with Statute U has not been encouraging (what a place to start!). If this revision is to be achieved within a generation, it needs to be done with proper discussion with the Regent House from the outset.
Oxford spent a century or more trying to get the job done, from Thomas Wolsey’s time to the final success under Archbishop Laud in the seventeenth century. On the way were to be heard cries of self-interested protest which invite comparison in their energy and passion with the sort of things said by the American Right at the moment, outraged by the very suggestion of the introduction of a national health service. Then, much more recently, reporting in 1997–98, Oxford did ‘North’, its counterpart of Cambridge’s Wass Syndicate, and the current Statutes came into being in fulfilment of one of the recommendations of the North Commission. As the new Preface puts it, ‘The statutes themselves had become burdened with unnecessary detail, and the whole needed to be set out in a more accessible and comprehensible form.’1 ‘The Statutes were approved by Congregation on 11 December 2001, and the ‘Queen-in-Council’ Statutes were then approved by Her Majesty in Council on 17 April 2002’ … ‘The new code came into force on 1 October 2002.’2
So this huge task was completed very rapidly in Oxford, but one foreseeable problem is now becoming increasingly serious. It is simply not a practical proposition to create a single legislative layer (Regulations, the equivalent of Cambridge Ordinances), below that of Statutes. All sorts of guidelines and codes of practice and other oddments continue to exist and there can be a good deal of muddle around the University, when a middle-ranking line-manager decides to make rules, does not properly understand or follow the procedure for creating a Regulation, and puts out his sheet of ‘regulations’ regardless.
I do hope the Cambridge scoping group will make an effort to learn about the problems Oxford has been encountering and will give special attention to this problem of the creation of subordinate and quasi-legislation. Or Cambridge could find the revision of the Statutes did not achieve clarity for long.
Can I be the only person who recoiled on reading this heading? There are quite a lot of ‘people’ who are members of the University but students, not employees. Turning ‘people’ into ‘resources’ is not made all right by tacking the word ‘people’ back on in front.
And what is this statement that the Human Resources Committee is a ‘joint’ committee with the General Board? The General Board has a clear slot in the Statutes. I think I would have remembered if we had had a Discussion of a Report proposing to give Human Resources defined powers under the Statutes. But what is said here does not seem to agree with what it says in the General Board Annual Report at (10.1): ‘The Human Resources Committee reports jointly to the Council and the General Board.’
I may not be the only speaker today to draw attention to the seriousness of misleading the House, whether it happens through incompetence or deliberately. In the recent Discussion on the Statute U proposals, Professor Brown invited the Regent House to believe that ‘a score’ of grievances justifies the proposed radical changes to the Statute.3 ‘The inadequacy of our present procedures is reflected in the time they are taking to deal with cases – for example, the score or more grievance cases that are under way at any given time are taking on average a year to settle, and some several years’. I believe it has been ascertained that the figure is actually three. One must ask what reliance is to be placed on the other remarks of a discredited witness.
Further worrying revelations about inaccurate statistics have been provided through the Freedom of Information Act.4 As to the four dismissals, it is important for the Regent House to know that in no case did an appeal succeed and that all four individuals were brought to sign compromise agreements with gagging clauses. Shame on you, Human Resources.
The appointment of a Head of Student Services is good, though. At least, I hope it is. One is bound to wonder given the track record of treatment of ‘people’ in Cambridge recently.
It will do no harm to mention once more the well-founded concerns about the expansion of a highly paid administration (‘Development of the University Offices and the UAS continues’).
18.2 Senior appointments of University Officers in the UAS are made by the Council’s Standing Appointments Committee. The Council’s Remuneration Committee considers matters relating to senior salaries and stipends, including aspects of professorial pay.
In a year when the announcement of draconian higher education funding cuts is bound to mean redundancies (see Statute U battle, continuing), what assurance can we have that these senior appointments with the secret top-ups and bonuses will not be protected while lowlier employees find themselves leaving the University’s employ under the revised Statute U provisions?
I have been alarmed to learn that Oxford’s integrated database of its ‘alumni’ (DARS) is now run in such a way that all your known connections and activities are in there along with the basic historic information about your membership of the University, matriculation, and degrees. Now it is one thing to keep this latter information indefinitely, quite another for the University to be assembling without telling you a marketing and fund-raising profile of your interests and associations and keeping that on file as long as it likes, in the hope of extracting money from you by one route or another, perhaps years hence. Personally I find this Big Brother spying repugnant. I am considering taking Oxford’s practice up with the Information Commissioner and since I understand a single database is also Cambridge’s way, this seems a convenient opportunity to put the Cambridge Development Office on notice. I wrote to ask about this a few days ago, expecting to be sent a URL. My enquiry is being treated as a Freedom of Information request so we must wait to know the answer.
Mr D. J. Goode:
Mr Deputy Vice-Chancellor, I speak today as President of the Cambridge University and College Union, Cambridge UCU.
Cambridge UCU welcomes the Reports under Discussion today. I shall not speak to all of them, but just this one, the Annual Report of the Council. And then only to one item within it, paragraph 8.5, dealing with the provision of pensions.
One of the agenda items for tomorrow afternoon’s Partnership Working Group (PWG) is USS, and several of the documents in the PWG’s bundle deal with pensions. Among them is a ‘Q&A’ for the central bodies of higher education institutions prepared by the Employers Pension Forum (EPF), and which the Pensions Administration Section of the University Offices is proposing to put on a special website to which it will draw attention by writing to all USS members in Cambridge.
As the Report points out, the increasing costs of pension provision are a matter for concern. Last academical year, the University increased the employer’s contribution to the assistant staff’s CPS scheme by four per cent in order to keep the scheme afloat. Earlier this academical year, HE institutions increased the employers’ contribution to USS by two per cent. But, as the EPF’s Q&A points out:
The pressures on HEIs’ funding are such that the current employer contribution rate is up to the limit of what is affordable.
In fact, the Q&A paints a pretty grim picture all round. Investments are not doing well; employers can’t afford to pay in any more; although HEIs are public sector bodies the USS is a private sector scheme and ninety per cent of private sector final salary pension schemes have already closed; the scheme is having to pay out to its members for far longer than it did because no one ever dies any more.
Alright, that last one’s an exaggeration. But not that much of one. Longevity is real problem. According to the Q&A:
When the scheme was established in 1974 the average retirement age for a man was 65, and life expectancy was between the ages of 67 and 71. Now the average retirement age for USS members is 62, and life expectancy is between the ages of 77 and 81. What this means is that initially the scheme needed to build up a fund that would pay out benefits for 2 to 6 years, but the scheme now needs there to be sufficient funds to pay a pension for a period of between 15 to 19 years.
A number of proposals for the future of USS are under discussion. But, even to a pensions ignoramus like myself, the only solution to more people drawing for longer from a pot that cannot be topped up any more than it is now would seem to be for people to take less.
And indeed changing USS from a final salary scheme to a ‘Career Average Revalued Earnings’ scheme – with the rather cuddly acronym of ‘CARE’ – where the benefit on retirement is not a proportion of the final salary but a proportion of the average salary during the career is one of the options under consideration.
Other options include delayed payment of benefits, or a scheme where members can pay a premium to retain the current arrangements, or something called ‘flexible retirement’ which presumably means working for longer, or winding down more slowly than the present sudden stop, with correspondingly reduced benefits.
One thing the Q&A makes very clear is that doing nothing is not an option. There will have to be changes to the USS benefits. Any changes require the approval of the Trustees and the Joint Negotiating Committee (JNC) of USS. The JNC has eleven members, five of whom are nominated by national UCU, and the UCU members of JNC will do all they can, Mr Deputy Vice-Chancellor, to ensure that change is managed carefully and that the USS remains an important and valued benefit for both current and future members.
The Annual Report of the General Board to the Council for the academical year 2008–09, dated 19 November 2009 (Reporter, p. 301).
Professor G. R. Evans (read by Revd. L. A. Yates):
Mr Deputy Vice-Chancellor, the Council Report reminds us that (13.1) ‘The University’s teaching and research activities are the primary responsibility of the General Board of the Faculties, which has its own statutory powers and responsibilities, including powers of supervision over institutions placed under its supervision (principally the Schools, Faculties, and Departments, the Library, the Institute of Continuing Education, and the University Computing Service). The Board reports as necessary to the University, and submits an Annual Report to the Council as required by Statute.’
When is it ‘necessary’ to report to the University? Surely not only when a Grace must be put? Some matters are of such huge importance that they ought to be considered in the proper constitutional manner with the Regent House, not through behind-the-scenes ‘consultations’ with a few. Let me explore a current General Board project where that ‘necessity’ seems to be being taken very loosely.
12.3. ‘The Board are clear that the review of learning and teaching support services is serving as a catalyst’. For what? This enormous project, whose details are being dragged out of the General Board only by assiduous use of the Freedom of Information Act, has vast implications. Let me sketch some of them.
A consultant (MacDougall Consulting Ltd) was commissioned by the Implementation Steering Group in October 2009 to put together ‘A draft report on the implementation of the General Board’s Review of Teaching and Learning Support Services with specific reference to a framework for the working relationship between the University Library and the Libraries of the Faculty, Department and Other Institutions.’1 Will the Council please give the cost of this consultant report in its reply to avoid the need for an FOI request to ascertain how much was wasted on commissioning it? Just because the Government has got into the habit of hiring expensive consultants, that is no reason for universities to do the same.
The consultant’s brief was to explore the practicalities of the creation of ‘a federal library service for the University of Cambridge’. He speaks of ‘the requirements’ of the General Board’s Review, ‘in which, amongst other things, de facto Director of Library Services and the University Library should become responsible for the provision and dissemination of materials for teaching and learning across the University’. He seems not to have been warned that this was by no means a done deal. He ‘carried out desk research, gathering together relevant documents and information’. It appears no-one lent him a copy of the Statutes and Ordinances for that ‘desk’, since they and the Regent House are not mentioned anywhere. The desk work was complemented ‘by meetings with a range of interested parties and key stakeholders within the constraints of time available to undertake the study [that is to say, he met 19 people].’ One of these people apparently knew a little about Oxford’s experience in attempting something similar but there was apparently no systematic study of lessons learned over there.
The study makes some twenty-five recommendations to help the University to move towards the fulfilment of ‘the General Board’s wish that: ‘de facto Director of Library Services and the UL should be become responsible for the provision and dissemination of materials for teaching and learning across the University’. This may be the General Board’s wish but we do not yet know whether it will prove to be the wish of the Regent House, and of course the consultant was apparently unaware of the existence of the University’s governing body and its powers.
No-one seems to have mentioned the Librarian Statute or the Statutory position of the Library Syndicate to this poor consultant or warned him that the Regent House would have to grace these changes. He conjures innocently with the idea that ‘the Director … would report to Library Syndicate (or what ever term is decreed for the new body recommended by General Board); the necessary current funding including Trust, Donations and internal trading accounts, be transferred to the Director of Library Services and that the University authorities consider the new affiliate relationship in the Planning Round for 2009.’
But let me pause here for a moment. It should never be forgotten that it is possible to put a Grace simply in the Grace-list without a Report, if the Council permits. There is an example in the ‘Agency for the Legal Deposit Libraries: Notice’ in the Reporter of 13 January. This seems in fact a fairly innocuous set of consequential changes made necessary by a change at national level but the Regent House would be wise to keep an eye on the risk of erosion of the copyright library rights Cambridge enjoys (they are under threat in Oxford too). And here we are, Notice and Grace, not Report and Grace.
Spin has a high priority. Naturally, ‘the Director of Library Services may wish to consider the desirability of a new logo being commissioned which more accurately reflects the new service provision’. And, amusingly in view of the furore in the press before Christmas about the ill-judged offer to allow a benefactor to rename the University Library, a quite different set of ‘naming opportunities’ is proposed for ‘a newly aligned Library service with a wider term than University Library; the University Librarian, to be known also as Director of Library Services’.
Our consultant speaks of the desirability that there should be ‘a change of mindset from a building-centric approach to one of provision of services for teaching and learning across the University and the Affiliate Libraries. This would be carried through by potential restructuring; a new approach to subject specialization’. But hang on a minute, sir, won’t the academics in Faculties and Departments have to be asked about that?
I will cherry-pick one or two of the recommendations most likely to startle the academic community. The whole report may be read online, though no thanks to the General Board:
Recommendation 3: That the overall responsibility for the governance will be assumed by the new Syndicate (N.B. the recommendation of the General Board Review was that the present University Library Syndicate should be merged with the General Board’s Committee on Libraries) through the Director of Library Services. The Chair of Faculty would therefore no longer have the responsibility for a Faculty, Department or Institute Library.
Does that mean what I think it means for local academic control of academic content of academic subject libraries?
Recommendation 16: That the funds presently granted to the Faculty, Department and Other Institutions (calculated over the average expenditure over the past 5 years) be transferred to the Director of Library Services for the financial year 2010–11 onwards.
Money is power.
And let me not keep from you the mysterious recommendation about ‘the potential for a realignment of front-of-house and back-of-house across the new library service arrangement’.
Reports and Financial Statements for the year ended 31 July 2009 (Reporter, p. 305).
No comments were made on the Reports and Financial Statements.