Skip to main contentCambridge University Reporter

No 6232

Wednesday 20 July 2011

Vol cxli No 36

pp. 1045–1072

Reports

Sixteenth 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 http://www.scrutiny.cam.ac.uk/.

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

(a)the Annual Report of the Council;

(b)the Abstract of the Accounts of the University; and

(c)any Report of the Council proposing allocations from the Chest.

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 Sixteenth Report follows this tradition.

3. In discharge of these obligations during the academical year 2010–11 the Board has met fortnightly during each Full Term with two additional meetings in June to finalize this Report. It held formal meetings with the new Vice-Chancellor (‘VC’), the Registrary, the Pro-Vice-Chancellors (‘PVC’) for International Strategy, Institutional Affairs, Planning and Resources, and Education, the University Development Director, the Secretary of the Board of Graduate Studies, and the Director of Human Resources. In addition, a sub-group of the Board met with the Director of Finance. The Board is most grateful to all of these individuals for the time and assistance they have given. Since the membership of the Board changes radically on a regular basis, such meetings are invaluable, giving members the chance to become acquainted with policy across a wide canvas.

4. The Board was provided with part-time administrative assistance this year by Miss Katherine Leckie. Her help has been invaluable.

5. The Board has also provided a resume of the recommendations that it made in its Fifteenth Report together with the Council’s responses in Annex A.

Financial matters

6. It has become customary in these reports for the Board of Scrutiny to congratulate the PVC (Planning and Resources) and the University Director of Finance for the transparent manner in which financial information is now presented. In his remarks at the Discussion on 25 January 20111 regarding the University’s Report and Financial Statements for the year ended July 2010, the Chairman of the Board of Scrutiny thanked them both for the clarity they have brought to the University’s Reports and Financial Statements. The same clarity was added to the Report of the Council on the financial position and budget of the University, recommending allocations from the Chest for 2011–12.2 The Board’s Report will focus on the Budget Report in greater detail, but we would also like to highlight some of the important issues that were addressed in the Chairman’s Discussion remarks about the Financial Statements for the year ended July 2010.

7. It is certainly commendable that, as the PVC (Planning and Resources), Professor Steve Young mentioned in his financial review of the Financial Statements for the year ended 31 July 2010, the University was able to achieve a result where ‘the University group’s operations were broadly break-even in 2009–10’.3 It is also very clear that this robust result in what must be said was already a difficult environment was largely attributable to the proactive decisions taken by the PVC (Planning and Resources) and his team to maintain very tight cost controls across the University. It is also important to recognize that the decision to maintain this tight rein over expenses and the limits placed on new hiring in 2009–10 have helped to ensure that we are better placed to deal with the even greater challenges that we currently face.

8. The Board of Scrutiny would also like to note that despite this very challenging environment the University remains in a strong financial position. As of the end of July 20104 the University held £249.8m of cash and money market investments, more than eight times the size of the cumulative deficit that the University is projected to suffer for the period up to 2014. Following the establishment of the Cambridge University Investment Office, the Endowment Fund has gone from strength to strength. In the year to the end of June 2010 the Cambridge University Endowment Fund achieved a ‘total return’ of 19.2%, significantly better than other comparable charitable endowment funds. Finally, it is important to recognize that the University generates a healthy cash flow and, as the Chairman noted in his remarks for Discussion on 25 January 2011, if the financial results for the consolidated University group had been calculated using investment income on a distribution basis, the operating surplus for 2009–10 would have been £39m, or approximately 3% of total income.

9. The Board recommends that the performance results for the Cambridge University Endowment Fund should be made more widely available throughout the University. In particular, the annual summary performance report that is distributed to investors in the Endowment Fund should be published in the Reporter.

The Budget Report

10. In the Fifteenth Report of the Board of Scrutiny we wrote that ‘the big news is that the Council has agreed that projecting a deficit budget for the period up to 2014 is justified’,5 and the big news this year is that the magnitude of the deficit through to 2014 is now projected to be bigger than first anticipated. In the 2010–11 Report on the financial position and budget of the University, the Council projected a Chest operating budget deficit of £1.8m for 2010–11 and then a deficit of £7.6m for each of the next two years and a cumulative deficit of £29.3m over the four years through 2013–14.6 The most recent Report now forecasts a Chest operating deficit of £3.7m for 2010–11, with the deficit rising to £9.2m and £12.7m in the two coming years and a cumulative Chest operating deficit for the four years to 2013–14 of £36.4m.7 The PVC (Planning and Resources) clearly warned that the University faces severe challenges ahead, and much of the deterioration in the projected budgets has been due to decisions taken by Government that lie outside the control of the University. Nevertheless, the Board of Scrutiny remains concerned that the original budgetary process may have adopted overly optimistic assumptions about the external climate. Despite this concern, the Board remains content that, given the balance sheet strength of the University and the financial cushion that is in place, the projected budget deficits do not represent a serious threat to the long-term health of the University.

11. In its Fourteenth Report the Board warned the University against using anticipated inflation planning numbers that were unrealistically low. We repeated this warning again in the Fifteenth Report when we recommended ‘that the University uses an inflation percentage more representative of long-term UK averages when modelling future financial outcomes.’8 The Board is disappointed to see that, rather than including a realistic inflation assumption, any reference to the underlying inflation assumption implicit in the budget projections has been dropped from the Report of the Council on the financial position and budget of the University for 2011–12.

12. The Board recommends that the Council routinely include a section on underlying assumptions, including inflation, pay awards, and all other critical inputs in all future Budget Reports.

13. While details of the underlying inflation planning numbers have not been made available in the 2011–12 Report, the underlying assumptions for pay awards have been provided. Given that pay costs represent around 55% of the University’s operating expenditure, approximately half of which is supported by the Chest, this assumption has a significant bearing on the magnitude of the projected deficit. Pay awards have been assumed to be 0.5% per annum until 2012–13 and then 1% per annum thereafter. Given that retail price inflation currently stands at more than 5% and national pay awards in the UK were in excess of 2.5% in the first quarter of 2011, these pay award assumptions may prove to be wide of the mark. At a time when the University is budgeting for a deficit it is critical that the actual outcome does not exceed the budgeted number, as this will impede the eradication of the projected deficits. In the current economic environment the University may yet succeed in securing low pay awards for the next four years, but if this assumption proves to be wrong, the impact could be devastating for our efforts to eradicate the deficit. Underestimating the magnitude of future pay awards by 1% in any one year will have a £2m impact on pay costs and the projected deficit. If actual pay awards are 1% higher than forecast every year for the next four years, pay costs from the Chest will be approximately £8.5m higher than currently budgeted by 2014–15 and the impact on the cumulative deficit from 2011–12 through to 2014–15 would be £20.5m.

14. The Board recommends that all inflation planning assumptions, together with all other relevant planning inputs be set at realistic levels, consistent with long-term UK averages for the HE sector.

15. The Board’s Fifteenth Report also urged the University’s leadership ‘to maintain a clear and open dialogue with the Regent House on the strategy it intends to follow to prevent the budget deficit from becoming embedded.’9 A number of initiatives have been announced, for both income and expenditure, that will contribute towards the long-term eradication of the deficit that the University currently faces. The Board has been impressed by the speed with which the PRC established working groups to report on the potential for efficiency savings in academic activities, pay and resources, and administration. The initial recommendations to come out of this work seem very promising and have resulted in the introduction of a Voluntary Severance Scheme and further reviews of the UAS and IT services. When combined with the efforts to increase income through the introduction of premium fee M.Phil. courses, and through increases in postgraduate and overseas fees, the Board is confident that a realistic plan has been put in place to eradicate the deficit. However, as stated above, it is critical that the leadership of the University does not allow the projected deficit to ‘creep up’, either through poor implementation of the strategies that have been outlined or because the University has been unable to stick to the assumptions upon which the budgets were based.

16. The Board has commented in its last two Reports on the vulnerability of HEFCE’s capital expenditure funding stream, and strongly commends the PRC for agreeing to a new Capital Planning Framework together with an associated capital fund. The new framework will allow much greater visibility about future building projects and will also provide much greater flexibility. The decision to allocate future transfers from Cambridge Assessment and CUP directly into the capital fund would also seem to be an appropriate use of these funds, as these allocations will help to offset the reduction in HEFCE capital funding.

17. The importance of Cambridge Assessment as a source of income for the University has been well documented. At a time when other sources of income are under pressure, the transfers from Assessment have become critical to the University. It is important that we recognize that in the year ended July 2010 Cambridge Assessment had income of £265m and generated an operating profit of £34.5m.10 If a capitalized value were to be attributed to this business it might even exceed the value of the unrestricted University endowment. Given the significance of Cambridge Assessment to the University it is critical that the business continues to be supported as it expands further. It has experienced significant growth on the back of its strong market position and a heavy capital expenditure programme will be necessary in years to come. It is important that sufficient funds are retained in the business to allow and support future growth.

18. The Council made several references in the 2011–12 Budget Report to the increasing risk to which research grants may be subject in future years.11 The pressure seems to be coming from many directions, including tight funding for Research Councils and funders seeking to reduce the contribution they make to indirect costs. One of the more serious suggestions was that the University is now starting to lose its leadership in research grant funding as a result of recent trends towards large research grants linked to strategic themes rather than small-to-medium sized responsive-mode grants. Although these are longer term issues, there is evidence that the pressure on indirect cost recovery is already having an impact on current research grant funding. In 2010–11 the original operating budget for Chest research grants and contract income was £40m, but in the latest Report the forecast has been revised down to only £34.3m.12 While the budget projections through to 2014–15 assume that Chest research grants and contract income will recover to £38m in 2011–12 and grow to £41.7m by 2014–15, these forecasts may prove optimistic given the pressures that have been described above.

19. The Board recommends that the Council outlines the University’s strategy for ensuring that research income meets projected targets.

Strategic planning

20. The Reporter of 19 May 201113 contains both the Report of the Council seeking authority to submit a planning application for University land at North West Cambridge and the Report of the Council on the financial position and budget of the University, recommending allocations from the Chest for 2011–12 (sometimes known as the ‘Allocations’ or ‘Budget’ Report). Both documents are notable for their exposition of a clear-sighted prospectus of the University’s needs and likely constraints over the next few years. The Board of Scrutiny congratulates those involved in providing a more coherent rehearsal of the objectives of the North West Cambridge project than we have received hitherto.

21. However, it does seem to the Board that there is an element missing from both of these important Reports and from the University’s planning processes generally. Between them the Senior Pro-Vice-Chancellor, Director of Finance, and Finance Committee of the Council (not to mention the Planning and Resources Committee (PRC)) should perform functions analogous to those of a corporate Chief Operating Officer, Chief Financial Officer, and Chief Accountant. The issue that is of concern to the Board is the rather earthbound nature of the planning process produced by these varied and powerful resources. Put simply, nobody seems to be responsible for devising game-changing financial strategy that takes the University planning process out of its comfort (or, given the rather dour outlook, ‘uncomfort’) zone and allows for fundamental improvements to the wealth of the institution. Financial planning seems to be about tactics for managing down within reduced circumstances rather than putting in place long-term strategies to transform the financial position of the University. We should be trying to obviate many of the constraints recognized in the Budget Report as being likely over the next few years, not consigning our aspirations to surviving within the limits we envision they will exert.

22. In its last three Reports the Board of Scrutiny has urged the University to take advantage of the capital markets in an opportunistic and calculated way. This recommendation has been made bearing in mind the forecast need of the University for considerable capital sums for North West Cambridge and other development projects, and, indeed, for operating income during a difficult transitional period until the next funding regime is embedded. In neither of the Reports under discussion is there any real detailed, or even general, discussion of the amounts needed to allow the University to fulfil its potential (even if that comprises nothing more than growing the ‘graduate university’, as we must). The failure to issue a long-dated bond and by so doing to establish a strategy to fund these ambitious capital projects, is a clear example of how the University could have helped itself to manage the unavoidable changes that government policies are foisting upon us. The Board is not entirely clear who in the central administration is responsible for driving through such game-changing financial strategy and believes that opportunities are being missed as a result. The PVC (Planning and Resources), the University Director of Finance, and the Finance Committee all provide invaluable inputs into the financial planning process, but we still seem incapable of putting forth financial strategies that will enhance the long-term wealth of the University. The Board of Scrutiny recommends that this strategic financial planning role be strengthened within the overall planning process.

23. In these days of banker-bashing, the Board of Scrutiny is surprised to find itself recommending that the University strengthen the role of financiers. The University has academics and administrators and accountants. The absence of any financiers is a glaring hole in our armoury and the Board urges the Council to look again at the mechanisms in place to provide this skill-set. As the Budget Report makes clear, we are entering a period of unprecedented difficulty and challenge, as the manner in which higher education is funded in the UK is fundamentally transformed. The University will need both the vision and the capability to capitalize on financial opportunities and gain access to the markets.

24. The Board recommends that the Council reconsider the manner in which strategic thinking in financial planning is provided.

Administration and governance

25. The Fifteenth Report discussed at considerable length certain perceived failings in the workings of the Council during 2009–10. Its recommendations did not find universal support but they remain on the table for the Regent House to return to if necessary. Suffice it to say that the open expression of dissent from decisions made in Council seems to have abated, no doubt due in part to a change in personnel and to the arrival of a new Vice-Chancellor. It is generally recognized that the committee whose remit it was to choose the new Vice-Chancellor were inspired in their choice and that as the University enters extremely choppy waters it is reassuring to know that one could hardly have hoped for a safer, more competent pair of hands at the tiller. It so happened that soon after his arrival the Vice-Chancellor was plunged into the debate about fees and the ensuing occupation of the Combination Room by a mixture of students, staff, and outsiders, some of whom were minors. This was a difficult situation but not unprecedented in the life of the University, although it may well have been the first time school children had been involved in a sit-in. Whether it was the correct decision to refuse to talk to the occupiers until they had vacated the premises is still a matter of some debate, but we should be appreciative that the incident was not allowed to spiral entirely out of control. Such is the difficult hand that this government continues to deal us from time to time.

26. As a rider, it is worth noting to the Regent House that the University Combination Room has been closed and declared out of bounds for all on the grounds of security. This seems to have been done by administrative fiat. Why it is still closed is as much a mystery as why those members of the Regent House who created such an unholy and largely unproductive fuss about the infamous lift last year have remained silent. Subsequently it has been drawn to our attention that when a request was published for nominations to the Committee of Management of this very room there was no response whatsoever.14 Council has therefore filled the vacant spaces on the Committee by nomination as the regulations allow. At the very least this shows yet again that today’s news can quickly become tomorrow’s wrapping paper.

27. The Board recommends that steps be taken to reopen the Combination Room or at the very least report to the Regent House on future plans for this important asset.

28. Another very difficult hand to play was, of course, the subsequent decision to charge fees of £9,000 and to present the Office for Fair Access (‘OFFA’) with proposals that went some way towards mitigating the deleterious effect this will have on what has become known as ‘access’. In this context the Board would like to put on record its admiration for the clarity of the statement on this contentious matter that was posted by Professor Young on the front page of the University’s website under ‘Notices’.15 The Board believes that the University had no other choice, manoeuvred, like all other universities, into a position where it took much of the blame for an unpopular government decision. A Discussion ‘on a topic of concern’ was held on 8 March challenging the University’s position,16 but in the end a Grace recommending that the University seek an agreement with OFFA to allow it to charge a £9,000 fee was approved by the Regent House by 1,387 votes to 416.17

29. However, the open, democratic procedures whereby Cambridge makes its decisions came under considerable strain at this point, forcing the Vice-Chancellor to reject two amendments to the Council’s recommendation, ruling that they were ‘inadmissible as being in substance and effect incompatible with the main purpose of the [original] Grace’.18 In April two representations were then made, under Statute K, 5, challenging this ruling. An inquiry into the representations was conducted by Professor Feldman, appointed the Vice-Chancellor’s deputy for the purpose, and his report concludes that no contravention of Statutes or Ordinances was involved in the ruling of Amendment A as inadmissible, nor in the ruling that the second part of Amendment B was inadmissible; and that while there was a contravention in the ruling on the first part of Amendment B, it did not affect the result of the ballot, nor the validity of the Grace, and that his report itself was a sufficient remedy for the infraction.19

30. At the time of writing the Board understands that this inquiry and report may themselves be the subject of yet another representation, now to the Commissary, under Statute D, V. At the same time, an initiated Grace has been published calling on the Council to communicate to the Government, on behalf of the Regent House, a message of ‘no confidence’ in the Government’s HE policies.20 Meanwhile, the University awaits publication of the White Paper on HE reform, and the response from OFFA.

31. In all of this, discontent among members of the Regent House with the ramifications of government policy is only to be expected. But the Board recognizes that the Council must act with the overall best interests of the University in mind, and the politics and pragmatics of the situation place a Council often in sympathy with the concerns of Regents in a very difficult position. Those who wish the University would take a much more robust attitude towards the Government should consider whether gesture politics are not at best empty as long as we continue to be financially dependent on that very Government, and can be at worst counter-productive posturing. The principle of self-governance comes up against the hard fact that he who pays the piper will call his own tune, unless the piper can persuade him otherwise. Whether these conundrums will excite further debate on the merits of privatization is unclear, but this remains the elephant in the room.

32. The Board nonetheless recognizes the tensions that self-governance entails, and is pleased to understand that the obvious breakdown of trust between the Regent House and the Council, which was discussed at length in the Fifteenth Report, has been a subject of debate by the Council. This is, in itself, a good sign. It is to be hoped that present suspicion can be replaced by long-term trust, but for that to happen Council members will have to develop somewhat better antennae for what might and might not cause trouble. The Council needs not only to be more aware of the potential pitfalls, but also sensitive to the presentation of issues so as to minimize friction and suspicion. It should resist the tendency to appear frustrated and self-defensive when our precious democratic procedures take on the semblance of a series of irrational obstacles.

The Reporter

33. In early March there emerged a proposal to cease publication of the Reporter in paper form.21 Given the degree to which most of us are now at home with online access, there is a sense in which this step is overdue; nevertheless, reading online does not come naturally to all and the value of the Reporter as both a written record of decisions made and as a single resource to which, for example, Tutors may go in order to keep abreast of changes in Faculties and Departments not their own, should not be underestimated. Given the complications of academic life in Cambridge and the notorious inability of Faculties to keep their websites up to date, moves towards decentralizing information in this way carries dangers. At the very least the process will have to be very carefully managed; but from the published response to the Discussion on this matter it would seem that Council is well aware of what needs to be done.22

34. The Board recommends that the process of streamlining the contents of the Reporter and moving control of the material away from the centre to the Faculties is very carefully monitored.

Research

35. The Board was unable to meet with Professor Lynn Gladden, Pro-Vice-Chancellor for Research, during this academic year. However, with the departure of Martin Reaveley, the Director of the Research Office (RO), it is apparent that research administration, strategy, and policy in the University will be undergoing changes. The Board will be monitoring closely developments in this area over the next academic year.

36. With the cessation of studentships which can be acquired from responsive-mode grant applications for certain research councils (EPSRC, BBSRC), the horizon of research strategy and Ph.D. funding for some subject areas has become severely restricted. One effect is that this will undoubtedly mean that the ability to develop excellent future UK scientists will be stifled in the long term. In addition, if there is a shift in strategy to attempt to plug this gap with overseas students arriving from areas of the world with which the University has strong connections it is imperative that the University ensures that the overseas external funding attached to these students does not come with too many strings attached.

37. Another topic of note is the shift by research councils to prioritize unified top-down ‘institutional’ research and collaborative large grant bids. The University is a ‘bottom-up’ institution and this shift in emphasis will certainly affect many academics who are accustomed to submitting funding applications based on individual ideas and interests. Yet again, of course, we are at the mercy of the funders. In the sciences there is a serious risk that if the University does not adapt to these new institutionally driven funding schemes, it will not be able to maintain either its market share or leading reputation, but by the same token it should be recognized that this imposes an alien constraint on academic research in the University. The Board would like to see clear guidance as to how RO intends to square this particular circle.

38. The Board recommends that the Council outlines the University’s response to the trend towards funding larger grants linked to strategic themes rather than individual research.

Human resources issues

39. The Board is pleased to note that a number of areas that have been extremely problematic in the past have improved somewhat over the last year. The number of administrative mistakes in contracts has been reduced, for example, and the Board received assurances from the Head of the HR Division that further thought was being given to reduce such mistakes even further.

40. The most difficult area, that of obtaining work permits for those newly appointed staff from outside the EEA, is becoming an increasing problem. A world-class university must have the ability to recruit globally; but current government policy is having the effect of denying us the opportunity to secure the best talent. Be it a lectureship or a professorship, there is now no guarantee whatsoever that having been appointed the preferred candidate will be allowed into the country. The situation is rapidly becoming absurd. The HR Division has what is termed a Compliance Team to deal with the operational side of these issues, but they find it difficult to keep on top of this issue when UK Border Agency rules and guidelines can change on a nearly weekly basis. It is imperative that HR and University management at the highest levels continue to argue the case for flexibility in overseas recruitment for academia.

41. The Board recommends that the Council provides an account of how the University will seek to maintain flexibility and competitiveness in recruiting from overseas in the light of UKBA restrictions.

42. The Board is also aware that there are continuing concerns over the Senior Academic Promotions process, particularly with the way the role of University Senior Lecturer (USL) is understood across the University. In discussions with the Director of HR, the Board is satisfied to note that, while the Senior Academic Promotions process is under the authority and responsibility of the General Board, it consults with HR, which provides effective and reasonable practical advice in particular for managing the difficult circumstances surrounding the USL promotion route. This will continue to be a matter which the Board will wish to monitor as changes and modifications to the process take place.

International affairs

43. The Board was pleased to learn from the PVC for International Strategy of the Vice-Chancellor’s plans for developing international relationships with key partners throughout the world. The development and maintenance of research partnerships at the highest level, the recruitment and retention of world-class academics and administrators, the nurturing of long-term relationships with potential partners, friends, and donors, and the routine business of welcoming international delegations to the University on a daily basis requires a strategic, well planned, and appropriately resourced approach. The Board is aware that international links throughout the University are so widespread and multi-faceted that it is difficult to grasp the whole picture but a more clearly defined international strategy is surely now necessary at operational level, together with the resources needed to implement such a strategy. Cambridge in America, for example, was established in 2000 to promote, facilitate, and co-ordinate the alumni affairs and development efforts of the University and Colleges in the United States but the presence of the University in other regions, several of which are developing into potential superpowers and are currently characterized by exceptionally high investment in education (and so are likely to reap the benefits of this investment in the foreseeable future), is less obvious. The Board, for example, recalls tremendous interest in India a few years ago and queries the extent to which this initial investment, and the valuable Indian relationships which already exist, are being managed and leveraged. The Board recognizes that such imbalances are the result of historical accident but suggests that a review of the University’s international strategy is overdue.

44. The Board recommends that a comprehensive review of the University’s international activities be undertaken, that an international strategy be clearly articulated, and that the necessary resources be allocated, and their effectiveness monitored on a regular basis, to facilitate implementation of this strategy.

SUMMARY OF RECOMMENDATIONS

1. The Board recommends that the performance results for the Cambridge University Endowment Fund should be made more widely available throughout the University. In particular, the annual summary performance report that is distributed to investors in the Endowment Fund should be published in the Reporter.

2. The Board recommends that the Council routinely include a section on underlying assumptions, including inflation, pay awards, and all other critical inputs in all future Budget Reports.

3. The Board recommends that all inflation planning assumptions, together with all other relevant planning inputs be set at realistic levels, consistent with long-term UK averages for the HE sector.

4. The Board recommends that the Council outlines the University’s strategy for ensuring that research income meets projected targets.

5. The Board recommends that the Council reconsider the manner in which strategic thinking in financial planning is provided.

6. The Board recommends that steps be taken to reopen the Combination Room or at the very least report to the Regent House on future plans for this important asset.

7. The Board recommends that the process of streamlining the contents of the Reporterand moving control of the material away from the centre to the Faculties is very carefully monitored.

8. The Board recommends that the Council outlines the University’s response to the trend towards funding larger grants linked to strategic themes rather than individual research.

9. The Board recommends that the Council provides an account of how the University will seek to maintain flexibility and competitiveness in recruiting from overseas in the light of UKBA restrictions.

10. The Board recommends that a comprehensive review of the University’s international activities be undertaken, that an international strategy be clearly articulated, and that the necessary resources be allocated, and their effectiveness monitored on a regular basis, to facilitate implementation of this strategy.

24 June 2011

Richard Bowring (Chairman)

David Goode

Jane Spencer

Jeremy Caddick

Jamie Horsley

James Trevithick

Kevin Coutinho

Catherine Mackenzie

Paul Warren

Paul ffolkes Davis

Oren Scherman

Alan Winter

Annex A. Resume of the Board’s recommendations in its Fifteenth Report and of the Council’s responses

Recommendation 1

The Board urges the University’s leadership to maintain a clear and open dialogue with the Regent House on the strategy it intends to follow to prevent the budget deficit becoming embedded.

Response:The Council agrees with the comment in paragraph 13 that it is necessary to be clear about the need to prevent a temporary deficit becoming ‘embedded’. That is part of the purpose of the strategic approach which the Council is taking, referred to above [pp. 198–9].

Recommendation 2

As last year, the Board recommends that the University uses an inflation percentage more representative of long-term UK averages when modelling future financial outcomes.

Recommendation 3

Once again, the Board strongly recommends that the University proceeds with all expedition to the issuance of long-dated bonds while the opportunity remains to do so at historically low levels.

Response: The Board’s comments on inflation percentages (paragraph 16) and a bond issue (paragraph 19) are again noted. Bonds are not the only form of long-term borrowing. The Council, with the advice of the Finance Committee, has the possibility of borrowing under active consideration. A Report to the University will be published soon. The Council is also, prudently, developing a capital strategy which will influence the need, and timing, of borrowing.

Recommendation 4

The Board recommends that the University urgently reconsiders the commercial objectives of the North West Cambridge development.

Response: The Board mentions North West Cambridge (paragraph 21). Planning work, including financial planning, is taking place through the Project Board chaired by Mr Alexander Johnston. It had been hoped, following the recent Discussion of the green paper, to publish a definitive Report to the University in the present term. However, recent announcements about the A14 improvement project mean that some further consideration will need to be given to some aspects of the scheme, and the Report is not now expected until later in the academical year (probably the Lent Term 2011). The Report will include financial and commercial assessments. It is important to be clear, however, that the principal strategic purpose of the North West Cambridge project is academic, in particular to provide affordable housing for University staff, especially researchers, possibly including Collegiate developments.

Recommendation 5

The Board recommends that the Council routinely include a section on ‘Uncertainties’ in all future Budget Reports.

Response: The Council agrees with the Board (paragraphs 22 to 25) that there are indeed distinct ‘uncertainties’ and expects such matters to continue to be explored in future budget reports. The Council intends, however, through its continued strategic work, to ensure that so far as possible the University can weather changing circumstances without damage to the fundamentals of the University’s teaching and research mission.

Recommendation 6

The Board recommends a clarification of the ‘general policy’ on publishing. It would be helpful if the nature and status of ‘discussion documents’, ‘green papers’, ‘white papers’ and the like could be defined, as well as at what stage of a process they are appropriately issued. It is also recommended that the Council and the General Board review the ways that they communicate with the Regent House generally with a view to giving greater clarity as to what kind of document might be published and when.

Response: The Council agrees with the Board (paragraph 44) that the status of reports and other papers (green papers, formal reports making proposals, consultation and discussion documents, for example) should be clear, at the point of publication.

Recommendation 7

The Board recommends that the Council reflects on how it might strengthen the principle of collective responsibility so that those who disagree do not feel that they must resort to public expression of dissent.

Recommendation 8

The Board recommends, therefore, that the Regent House look again at this particular Statute [Statute A, IV, 9], and consider the possibility that the Council should be permanently chaired by one of its external members.

Response: Opinions differ as to the extent to which the Council, predominantly an elected body, can adopt a corporate approach to its work, that is to say, an approach where disagreement within the Council is not visible outside, except through the resignation of a member. The Council’s business is regulated by the Statutes and Ordinances, Standing Orders, a Code of Practice, the Statement of Primary Responsibilities, and other measures, some binding and some conventional or advisory. These are, so far as they are the responsibility of the Council itself, adopted annually, and provide guidance as to the participation of members in Council business.

Recommendation 9

The Board recommends that the Council monitors progress within the HR Division in order to resolve all remaining issues.

Recommendation 10

The Board recommends:

(i)that the criteria for Senior Academic Promotions be established by Ordinance and not left vulnerable to administrative change; and

(ii)that the specimen letters employed in the exercise be revised.

Response: The Council has noted the Board’s comments on HR issues (paragraphs 52 to 58) and has referred the specific suggestion about the Senior Academic Promotions procedure (paragraph 58) to the General Board for consideration.

Annex B. Glossary of terms

BBSRC

Biotechnology and Biological Sciences Research Council

CUP

Cambridge University Press

EEA

European Economic Area

EPSRC

Engineering and Physical Sciences Research Council

HE

Higher Education

HEFCE

Higher Education Funding Council for England

HR

Human Resources

OFFA

Office for Fair Access

PVC

Pro-Vice-Chancellor

PRC

Planning and Resources Committee

RCUK

Research Councils UK

RO

Research Office

UAS

Unified Administrative Service (of the University)

UKBA

United Kingdom Border Agency

USL

University Senior Lecturer

Footnotes