Skip to main contentCambridge University Reporter

No 6193

Wednesday 9 June 2010

Vol cxl No 3

pp. 969–1008

Report of Discussion

Tuesday, 8 June 2010

A Discussion was held in the Council Room. Pro-Vice-Chancellor Dr J. C. Barnes was presiding, with the Registrary’s deputy, the Senior Proctor, a Pro-Proctor, and eight other persons present.

The following Reports were discussed:

Report of the Council, dated 17 May 2010, on the financial position and budget of the University, recommending allocations from the Chest for 2010–11 (Reporter, p. 861).

Professor S. J. Young (read by Dr J. P. Spencer):

Deputy Vice-Chancellor, this is my first Budget Report since taking over as Pro-Vice-Chancellor for Planning and Resources from my very able predecessor Professor Minson. As can be seen from this Report, Professor Minson left the books in good order. Despite the £7.4m deficit predicted in the 2009–10 budget, the latest predictions suggest that the current year will end in a small surplus.

In June 2009, the Planning and Resources Committee recommended that planning for the 2010–11 year should be based on a below inflation zero cash increase and thereafter it should rise by 1% in 2011–12 and 3% per annum thereafter. On this basis, if average annual inflation is 2%, funding in real terms would return to 2009–10 levels by 2014–15.

The recommendation for 2010–11 proved to be good advice. Although challenging, Schools and Institutions have delivered individual plans on a flat-cash basis which in aggregate closely matches our predicted income for the year. The resulting consolidated operating budget for 2010–11 which is before you today is therefore broadly in balance.

I will not remark further on the details of either the current year or the year ahead, since they are well documented in the Report and accompanying tables. Instead I would like to turn to the five-year planning guidance and the broader picture.

We face a future of great uncertainty and the projections in this Budget Report beyond 2010–11 should be read with extreme caution. In particular, the HEFCE funding predictions assume a cut of approximately 9% in real terms over the three years from 2011–12 to 2013–14. This is probably optimistic and the cuts to our HEFCE grant could easily be 20% or more over that period. Based on data from Schools, research grant income is assumed to continue to grow, albeit at a reduced rate. This may also be optimistic.

Last October I wrote to Schools and Institutions asking them to consider the strategies they would adopt to cope with two much tighter planning scenarios. Scenario A asked for a further 2% cash cut in 2011–12 and Scenario B asked for a 5% cash cut with subsequent years increasing at 3% per annum as before. The response was that broadly Scenario A was achievable within existing structures but Scenario B would require central co-ordination.

So as we now start thinking about planning for 2011–12, we have to decide on the course that we wish to steer. If the predictions in today’s Budget Report were accurate, Scenario A would pull us back into surplus. If on the other hand, HEFCE and Research Council cuts prove to be much deeper, something akin to Scenario B could well be necessary. Much will depend on how determined the Government is to protect research.

In addition to our funding streams, there is another major uncertainty to consider. Those Regents who have read the University’s response to the Browne review will know that whilst we receive around £9,000 in grant and fees for each undergraduate we teach, the cost of delivery is now estimated to be £18,000 per annum so there is a £9,000 per annum funding gap per student. This is unsustainable and a positive outcome of the Browne review is critical both to the future of our undergraduate provision and to our financial health generally.

Many of the unknowns that we currently face should be revealed at least in outline by early 2011. The new government’s Comprehensive Spending Review will have been completed and Browne’s direction of travel should be known. The information may be unpalatable but at least we should know where we stand. Given this situation and our relatively healthy cash reserves, my advice to the Planning and Resources Committee for the next planning round will be to adopt Scenario A for 2011–12 but be prepared to switch to a much tighter regime in 2012–13 if necessary. Some may regard this as complacency, but to cut deeper now without a clear understanding of what lies ahead would in my view be damaging and perhaps unnecessarily so.

In the meantime, we are not idle. A number of actions are already underway to improve our income streams: these include new initiatives to improve research grant success, increases to various unregulated fees and investment in new premium M.Phil. courses, action to mitigate risk in our pension liabilities, closer monitoring of our subsidiary operations, and energy saving initiatives. In addition, the Planning and Resources Committee has recently mandated the formation of a number of working groups which will develop plans to reduce costs whilst continuing to support the excellence of our core mission. The times ahead will be difficult, but with good will and common purpose, we will pull through them.

Finally, Deputy Vice-Chancellor, I would like to express my thanks to the many staff of the UAS who have worked hard to produce the data and projections that inform this Report.

Mr P. ffolkes Davis:

Deputy Vice-Chancellor, as usual, given the proximity of the publication of the Allocations Report and of this Discussion to the issuance of the Board of Scrutiny’s own annual Report, I will keep my remarks short and general. Regents may expect the first section of the Board’s 15th Report to deal substantively with University’s finances and, in particular, with the Report under Discussion here today.

The key matter that jumps out of the Allocations Report is Council’s bowing to the inevitable and agreeing to run a deficit until 2014. Given the parlous nature of government finances, it is only prudent to anticipate the cut-backs predicted in the Report, and, indeed, the Board is concerned they may very well prove an under-estimate. Even more worrying is the assertion that a deficit is only acceptable if there is a ‘clear plan to return to a healthy surplus’. While the Board shares this aspiration, it is not clear how the Financial Strategy Steering Committee proposes to achieve it.

This year the Board has noticed less of a gulf between the Allocation Report’s rather doom-laden prognosis and the actual numbers forecast for succeeding years. They are broadly in alignment and do not make happy reading. As my predecessor remarked at this time last year, the next few years are going to throw up extraordinarily difficult financial environments through which the University must be steered. Given this, it is disappointing that so many themes of concern from previous Board Reports – the pensions ‘time-bomb’, the lack of clarity around the North West Cambridge development, and the habitual failure to act to secure long-term funding for key University capital projects, for instance – continue to make their appearance with stunning regularity. Progress to resolve these issues is still not being made fast enough.

The challenges facing the University’s ability to continue operating at its customary level of excellence are real and deep. Unless they are addressed in a different spirit of urgency, innovation, and self-determination, we may well have to get used to growing deficits lasting well beyond 2014. These are themes to which the Board of Scrutiny will return in its 15th Report which it intends to submit within the month.

Professor G. R. Evans:

Madam Deputy Vice-Chancellor, ‘Assumptions’. ‘Uncertainties’. At least that is honest. But attempts to pin those down to reality must not tempt the University to lose sight of its academic purposes and priorities, or its duty of stewardship towards its heritage, both physical and intellectual. ‘The withdrawal of the Historic Buildings Targeted Allocation’ strongly suggests that the ratcheting up of the expenditure on the Lift in the Combination Room in the teeth of mounting controversy was to put it mildly financially irresponsible.

As to income, as we have just heard, we cannot trust public funding to declare itself and stick to its promises. So we must bring in extra money however we can. That seems to be a key message this year. The University is dangerously dependent on income from Cambridge Assessment and a wider spread of sources would be convenient.

So just two brief points on possibly rather important trends:

In the context of the reduction in ‘the Chest share of income from research grants and contracts due largely to a change in the mix of sponsors away from Research Councils towards sponsors such as charities’, I shall remark elsewhere today on the problems potentially attaching to the acceptance of commercial funding or funding from charitable trusts behind commercial faces, and the need for vigilance both about ethics and about the terms.

‘Modest increases to some of the Schools have been made in respect of ... anticipated fee increases resulting from the expansion of premium M.Phil. courses’. Are we to understand that the value of courses is no longer to consist in their academic merit but in their capacity to get bums onto seats (preferably the rears of international students who pay the biggest fees)? The next step is designing courses not for academic but for financial reasons. It is happening elsewhere.

Professor A. W. F. Edwards:

Madam Deputy Vice-Chancellor, Professor Evans has almost made my points, so I will be brief.

In paragraph 4 we read of the withdrawal of the Historic Buildings Targeted Allocation which this year was £4,212,827 (Appendix 5). I should like to know more about this Targeted Allocation, what the targets have been and how much has been spent on them recently.

The Royal Commission on Historical Monuments Inventory only lists the Senate-House and the Old Schools, and then the much later Fitzwilliam Museum and the Observatory, though perhaps these do not come under HEFCE’s idea of ‘historic’. The Cockerell Building of the Old Schools is similarly later and in any case is now the Caius Library and therefore no longer a University responsibility (unless some of the Allocation is available to the Colleges).

I wish to raise one further matter, prompted by the remark in paragraph 13 that charities ‘do not normally contribute to indirect costs’. Why not?

When I was Chairman of the Library Syndicate, a well-known and well-heeled charity asked for its entire graduate staff to be given access to the Library with borrowing rights, and when the Syndicate suggested that some payment might be appropriate we were informed that this was impossible because the request came from a charity. It did not seem to have occurred to anyone to point out that the University is a charity too.

Charities have already benefitted from charitable status on their income side; they should not expect to be able to benefit again by using the specious argument that they cannot contribute to the University’s overheads, which presumably include the cost of the Library. Do they not have overheads themselves?

Report of the General Board, dated 21 May 2010, on the establishment of a BP Foundation McKenzie Profes­sorship of Earth Sciences (Reporter, p. 920).

Professor G. R. Evans:

Madam Deputy Vice-Chancellor, it has long been the case that the University accepts gifts to establish named Chairs. There is also no problem with the acceptance of ‘project’ funding for research, provided that the contract drawn up with the funder adequately protects the academic freedom of the researchers. Nor is it without precedent to house commercial laboratories in the University (at a suitable price). But that is not at all the same thing as blurring altogether the boundary between commerce and academe, as appears to be proposed here, and as seems already to have happened in the case of the BP Institute which was set up in 2000.1 It is not at all easy to see on its website what is academic and what is not, who employs whom, and so on.

The present gift apparently comes from the BP Foundation, which is described online as an ‘affiliate’ of BP. But the Report we are discussing appears to have BP itself as the active agent.

(1) ‘BP intend, through this donation, to enhance the excellence of research and training in quantitative physical Earth Sciences in the University and sustain the interaction with BP (both directly with the company and through the existing BP Institute).’

(2) ‘the General Board have also agreed that on the occasion of each election to the Professorship they will invite BP to suggest the name of a suitably qualified person for inclusion among the General Board’s three nominations to the Board of Electors.’

(3) ‘The Managers of the Fund shall be:

(a) the Head of the Department of Earth Sciences;

(b) the Head of the School of the Physical Sciences;

(c) three members, including one nominated by BP plc, appointed by the Faculty Board of Earth Sciences and Geography.’

I served for some years on the Nominations Committee when I was a member of the Council and I regularly protested (to no effect) when it was proposed to put representatives of donors among the Electors to a Professorship. When the Report proposing a GKN Professorship was Discussed on 4 July 2000 I raised the same concern.2

Other speakers on that occasion raised a further question which should not be lost sight of if the present proposal is allowed to go ahead. ‘GKN’, said one speaker, ‘is a company of very dubious moral standing’. An arms manufacturer was welcome in 2000 to a place within the University’s academic activities. When the negotiations leading to this present Report were afoot the reputation of BP had presumably not been damaged by the pollution of the Gulf of Mexico, and in any case that is not at all the same thing. But as when the Tyco money which funded the Robert Monks Chair of Corporate Governance turned out to be entangled in a financial scandal,3 there may be reputational damage in store for the University. That would be bad enough in any case, even if the connection was merely financial, but it is surely much worse if BP is engrafted into the academic fabric of the institution.

This BP proposal is for a much larger part of the camel of commerce to enter the tent than I believe is safe for the protection of academic freedom, the protection of reputation and the protection of the University’s charitable status. It is barely a week since HEFCE swung into action as Charities Regulator for universities.4

Should the Regent House have a Report on the policy principles the University intends to adopt for dealing with such generous offers when they come as marriage proposals? I understand there were no takers for the grand scheme of naming the University Library after a donor. But that does not mean it could not one day become the BP Library or the GKN Library or the Tyco Library, if the Regent House does not review the rules.

Professor J. A. Jackson (read by Professor R. S. White):

Deputy Vice-Chancellor, this generous gift to the University celebrates the achievements, and continuing activity, of one of our greatest scientists, whose contribution to understanding the planet on which we live has been immense. It recognizes and encourages Professor McKenzie’s whole approach to investigating the Earth, using simple physical models to explain quantitatively a wide range of natural observations. This gift marks, not only the insights by Professor McKenzie that have greatly benefited the whole of humanity both through his intellectual contribution to knowledge and his practical contributions to economic growth, but also the inspiration and training that his leadership and example have provided to generations of Cambridge students who have gone on to benefit both industry and the subject.

The aim of the Department of Earth Sciences is quite straightforward: it is to understand how our planet works. Current and future generations of students will be faced with enormous challenges to do with energy, natural resources, climate, natural hazards, and environmental protection. This new Professorship, by strengthening academic and intellectual leadership at the highest level, will help us to provide those students with the tools to meet these challenges, and to ensure that Cambridge’s influence in these areas remains disproportionate to its size. But we cannot do it alone. The oil industry represents a vast resource of data, experience and technical expertise, which we have always exploited in a symbiotic relationship that greatly enhances what we can achieve, and which we would be foolish to ignore.

The Department of Earth Sciences therefore welcomes BP’s continuing interest and participation in our endeavours. There is no desire, intention (on either side) or practical possibility that BP should control or interfere with the new Professor’s activities. This is an endowed post, and the independence of the research agenda and intellectual property rights are guaranteed. By inviting BP to suggest (and not appoint) one of probably eight electors, and to nominate one of five fund managers, we will ensure the continuation of the company’s interest and advice. Our experience with the BP Professorship of Petroleum Science (which has been held in the BP Institute since 1999 on exactly the same terms) has been that BP’s involvement on this basis has been a source of intellectual and technical input that has been wholly beneficial.

I commend this very generous and welcome gift to the university, and would like to express the Department’s warmest thanks to the BP Foundation for their support.

Professor A. W. F. Edwards:

Madam Deputy Vice-Chancellor, I have a tiny point of terminology in this Report to raise, which I only do since I am here for another Report anyway.

By Grace 4 of 10 November 1993 the General Board, which seems to have been prey to a misunderstanding, recommended that the creation of Emeritus Professors be discontinued, so the distinguished Professor McKenzie cannot be described as ‘an Emeritus Royal Society Professor in the University’ any more than I can be described as an Emeritus Professor in the University.

I only discovered the change of Ordinance when I retired as Professor of Biometry, and on querying the reason for it received an unsatisfactory answer. I therefore take this opportunity to ask the General Board to recommend the Council to promote a Grace to repeal it. Otherwise the proposed Regulation 1 will need redrafting.

Report of the General Board, dated 21 May 2010, on the establishment of a Humanitas Visiting Professorships Fund (Reporter, p. 921).

Professor G. R. Evans:

Madam Deputy Vice-Chancellor,‘The promotion of interdisciplinary research and innovation in the various fields of the arts, social sciences, and humanities is an important element of the University strategy.’

As someone who spent twenty-five years as a University Teaching Officer struggling with the opposite experience, I am struck by this claim. ‘The development of cross-disciplinary enquiry helps stimulate fresh thinking and dialogue, facilitating new collaborations and reaching out to new audiences.’ Yes, I remember saying much the same, to deaf ears at the time.1 I daresay a number of those of an interdisiplinary persuasion whose names do not appear on the list of Senior Academic Promotions will have read this cheerful assertion with some grinding of teeth. The fundamental problem is of course that Faculties and Departments in different Schools have no financial incentive to collaborate and even Faculties and Departments in the same School tend to want to clutch their resources to their chests.

What we have here is a proposal to get round all those financial difficulties which are preventing many of those who have earned promotion from getting it, by creating a University office of Professor which can be held for a mere two weeks and no longer than eight by outsiders to the University. CRASSH is to hold these fast-moving ‘Professors’ within this rotating ‘office’. I hear tooth-grinding noises again from the disappointed unpromoted UTOs on the establishment of their Faculties and Departments.

This new carpet-bag Professorship is to be placed in Statute D among the existing University offices. Visiting Professorships already appear in Statute D, XIV. But surely Statute D, XIV, 3 allows only the creation of a single Professorship to be held by an individual, not a class of Professorships to be shared week and week about by individuals whose appointments will not be approved by the Regent House but by the General Board which will both make the ‘elections’ and determine the titles. Will these passing Professors be entitled to hold passing Professorial Fellowships in Colleges under Schedule B? And what of Schedule H?

These fleeting figures will barely have time to nip into the Old Schools and sign the book under Statute D, I, 4. They will scarcely have long enough to discharge the fundamental duties of a UTO deriving from the Oxford and Cambridge Act 1877, in their three lectures and a seminar. Will they be ex officio members of the Regent House? Will they two weeks after giving their inaugural and immediately after giving their valedictory, become Emeriti? Has anyone thought this through?

Report of the General Board, dated 19 May 2010, on Senior Academic Promotions (Reporter, p. 916).

No remarks were made on this Report.