No 6285
Wednesday 14 November 2012
Vol cxliii No 8
pp. 119–130
A Discussion was held in the Senate-House. Pro-Vice-Chancellor Professor John Rallison was presiding, with the Registrary, the Senior Pro-Proctor, a Deputy Proctor, and ten other persons present.
The following Reports were discussed:
Report of the General Board, dated 10 October 2012, on the establishment of a Professorship of Hypoxia Signalling and Cell Biology (Reporter, 6281, 2012–13, p. 48).
No remarks were made on this Report.
Report of the General Board, dated 10 October 2012, on the establishment of a Readership in Quantitative Sociology (Reporter, 6281, 2012–13, p. 49).
No remarks were made on this Report.
Report of the Council, dated 22 October 2012, seeking authority to commence development of University land at North West Cambridge (Reporter, 6282, 2012–13, p. 59).
Professor J. K. M. Sanders (Pro-Vice-Chancellor for Institutional Affairs):
Mr Deputy Vice-Chancellor, I speak as Deputy Chair of the West and North West Cambridge Estates Syndicate and as Pro-Vice-Chancellor for Institutional Affairs. In the latter role, I am responsible for leading the University’s strategy in relation to staff and environmental matters, public engagement, and our relationships with the local communities and authorities. The proposed North West Cambridge development is therefore a key feature of all aspects of my portfolio. I also live nearby.
North West Cambridge is the largest capital project ever contemplated by the University. If it is carried through to completion it will have a profound influence on the development of the University and also of the City region. The project has been conceived as an integrated whole, but the Regent House is only being asked to approve the development of the first phase; this will have a critical mass of people and the amenities to support them, so it will be attractive, sustainable, and economically viable in its own right. Any later phases could only be developed after further approvals have been granted by the Regent House.
In my remarks this afternoon I will address several questions: Why? How? When? And can we afford it?
To remain at the international forefront we need to provide the environment and facilities that are vital for attracting and retaining world-class students and staff. For several years, all the Schools have been pressing to be allowed to expand their graduate student numbers, but a lack of suitable accommodation in the Colleges or the city has inhibited that expansion, so we are falling behind our competitors in responding to the inevitable change in student demographics. And anyone who works, as I do, with postdocs will know how shocked they are when they discover the high rents they will have to pay for low quality housing in and around Cambridge.
Postdoctoral researchers and graduate students are a critical component of our enterprise: they are the creative and intellectual driving force behind much of the daily research success of Cambridge, and there is intense international competition to attract the best. Postdoctoral workers are the largest staff group in the University, yet are currently provided with relatively little by way of College-type support or lifestyle. It is vital that we can provide them with an attractive environment and facilities so that they leave Cambridge having had the good time of their lives, and having contributed academically, socially, and economically to the University and to the region. The very best, of course, we hope to recruit into permanent posts.
The availability and price of homes to buy is also an increasing problem in recruiting permanent staff at all levels, placing huge upward pressure on salaries, and forcing new colleagues to commute many miles; the cost of this commuting in terms of wasted time and carbon emissions, and traffic pressure on roads, cannot be dismissed lightly.
At present, then, a shortage of all types of appropriate affordable housing is a major constraint on our academic development, so we need to build now many of the homes that the University is likely to need in the foreseeable future. That is the main driving force for this project in its early phases. Looking ahead, the Master Plan also includes up to 100,000 m2 of University and private sector research space to be built in later phases.
The site was identified in 2003 by the County Structure Plan as being suitable for development. Over the next few years, a series of public consultations and hearings, and reports to the University, eventually led in 2011 to the submission of an outline planning application and the establishment of the Syndicate. In the past year, the Master Plan has continued to evolve, architects have been appointed, and the local planning authorities agreed, on 8 August 2012, a resolution to grant outline planning permission, subject to signature of a comprehensive Section 106 legal agreement. We expect that agreement to be signed before the end of the year. A comprehensive history and description of the project is available on the North West Cambridge website (http://www.nwcambridge.co.uk/).
North West Cambridge presents a unique opportunity to enhance the life of both the University and the City region: the challenge is to create a new place in a city that is already extraordinary and wonderful. Architecture and public spaces of the highest quality will create a sustainable community in a new local centre and in residential neighbourhoods that together will complement the historic City centre.
Much of the new key worker and graduate student accommodation will be designed in a modern collegiate form, more open and welcoming than the traditional walled Colleges of earlier centuries. (I am using the phrase ‘key worker’ in a technical legislative rather than rhetorical sense.) There will also be family homes for students and key workers to rent. We expect that most of the key workers will be postdoctoral researchers, but there will also be technicians and secretaries amongst others, and the vast majority will be relatively low-paid. Eligibility, which equally includes College employees, will be determined by family income with priority given to those moving to Cambridge to take up employment. By providing this affordable accommodation for our own staff we expect to reduce the pressure on rented housing elsewhere in the City region.
The University intends to provide the stewardship for the whole site into the long term for the benefit of future members, ensuring high standards of design, coherence, maintenance, and security. The design and construction of the student and key worker housing, and the local centre, will take place under our control through the professional project team, reporting to the Syndicate; these buildings will remain in the University’s ownership. The construction of homes for sale will be via disposal of land to developers who will be working to strict design guidelines.
The early development of the local centre, including primary school, nursery, shops, a community centre, health centre, and police office will create a community focus from the very beginning and provide additional facilities for local residents in the area. The primary school will have to be a Free School, and may be a University Training School, depending on the outcome of current negotiations. A café/restaurant will open onto the market square, and will welcome locals and visitors as well as University members. The community centre and Storey’s Field will be managed through an innovative joint venture with the City Council, and will again serve the whole community, as will all the open space and playing fields.
The mixed-use community that will grow around the local centre will embrace different lifestyles, from single students in University accommodation, to families in their own freehold homes; many of the latter will have no relationship with the University other than where they live. The entire development will set new standards of environmental and social sustainability, with an emphasis on safe pedestrian, bike, and bus access. The environmental standards we have set do present the architects and engineers with some major challenges to overcome. The architecture and landscape will create a sense of place that is inspired by the historic city and yet is exciting, forward-looking, and designed to face the changes in climate that are likely to occur in the future. North West Cambridge will be firmly embedded in the city, well connected and related to Girton and the County, and will also be an attractive destination in its own right. Furthermore, it will bring welcome support for the residents on the adjacent West Cambridge site, who currently have very little access to facilities or sense of community.
The Council is bringing forward at this stage only Phase 1 of this project. Phase 1 is of sufficient scale and diversity that it will be economically and socially viable in its own right. There will be around 300 graduate student rooms; over 500 postdoctoral homes, mostly one- and two- bed flats; around 50 homes for University staff for rental at market rates; and approximately 700 homes to be developed by the private sector and sold freehold.
Several Colleges are involved in the design of the postgraduate housing. The current model is that they will lease space for rental to graduate students. The architecture allows for the possibility that future development, probably funded by philanthropic donation, will allow evolution of this space into an independent College. Similarly, much of the key worker accommodation is being designed with a view to its development into a social and academic environment that offers more than merely housing. Philanthropic fundraising in support of these aims will be a major priority for Collegiate Cambridge as the University and the Colleges step up their activities in preparation for a new campaign.
If the Regent House gives its approval to Phase 1 in a ballot early in Lent Term 2013, then main building works will begin in mid-year, and much of Phase 1 should be ready for occupation in summer 2015.
In order to facilitate delivery to this timescale, preparatory works comprising archaeological investigations and environmental measures are currently taking place on site using budgets already approved by the Council. Several sets of architects are also working closely together to develop more detailed plans.
Having set out the strategic imperative for this development, I now turn to the financial position. This is, of course, set out in some detail in the Report of the Council, but there are some key points I want to draw out.
The budget for this project matches its large scale. We estimate that the cost of Phase 1 over the next 40 years will be £281m at today’s prices, the vast bulk of which is incurred in the early stages for constructing the buildings and infrastructure. In order to fund this initial investment we must derive some income by disposing of land for market housing, the balance being funded by borrowing which is ultimately repaid from streams of rental income. Selling some land reduces the borrowing requirement; without this contribution, we would not be able to repay the interest on borrowing, let alone the borrowing itself, for a very substantial period. As it is, we anticipate that the project will repay the loan and interest in less than 40 years. This is less than the period for the repayment of the bond recently issued by the University, so we have security that we will not need to refinance at uncertain rates of interest. Unlike academic building projects, this one will genuinely pay for itself.
How reliable are the figures and the underlying assumptions? We have taken a conservative approach with our assumptions, supported throughout by professional advice and testing of those assumptions. The projections have been examined both by the Syndicate and by the Finance Committee, each of which benefits from the advice of external members with specific expertise in this area. There is a prudent contingency, set at 20% of construction cost, which provides a cushion against inevitable uncertainties, and we have tested sensitivities by applying different scenarios to the financial model. Those sensitivities indicate that the model is robust. It is important to understand in this context that the model derives its strength, not from long-term reliance on high property prices, but from the long-term inflationary growth of rental income from staff accommodation. The financial model works because the interest is fixed at a low rate for 40 years whilst rental income, linked to modest pay inflation, continues to grow. In short, this is not a speculative investment based on a booming property market.
Finally, in constructing the financial case for the development, we have looked only at the income arising from the land itself by way of rent and disposal. We have not attempted to attribute value to the increased numbers of postgraduate students and postdoctoral workers we will be able to recruit, nor to the strategic institutional benefits which I have referred to earlier. Therefore, I conclude, as does Council in its Report, that the financial case, based on conservative assumptions and with a contingency buffer, shows that we can deliver a development that is both high quality and affordable.
To conclude, the development of North West Cambridge will demonstrate the confidence that the University has in its own future and in its local community. It will allow us to grow in a way that is coherent, sustainable, exemplary, and truly exciting. Above all, it will help us to continue contributing at the highest level, but in a deeply practical way, to society and the economy locally, nationally, and internationally.
Mr N. M. Maclaren (University Computing Service) (read by Dr D. R. de Lacey):
Mr Deputy Vice-Chancellor, concern has been expressed before about the sale of the freehold of land for ‘market housing’ on this site, and there are three pieces of information that seem to be missing:
(a) Exactly what form of sale is being proposed. We have been told only that it will be sold freehold, with a ‘rent charge’, and the very low price of £50,000 per plot and the planning documents imply that it will be mainly multistorey blocks of flats. That implies that the University will have some residual management responsibility, but how much? That may be a detail, but that is where the devil lurks.
(b) A proper risk assessment of the risks of selling this land in this way. I have no doubt that the University has obtained legal advice on how to set up the convenants etc., but that is not the same. The University is particularly vulnerable, because it cannot simply walk away if an intractable problem develops.
(c) A description of which realistic alternatives have been considered, and why they were rejected. We have had responses stating that land cannot be sold leasehold for residential purposes, but we all knew that. That was and is not the only alternative, and I describe one possible alternative below.
All of those affect whether this solution gives the best value for money, rather than being simply the easiest way to obtain £45m. This decision was taken a decade ago, probably as merely the most obvious option – but has the Council reconsidered it recently? It is also unclear whether the Council has even seen the above information, or has merely accepted a statement or recommendation of the minimal form of those in paper FC(12)100.
Please could the Council provide some definite information on those matters to the Regent House?
The remainder of my Remarks merely point out some internal discrepancies in the Report, and explain my concerns in a little more detail.
The current Report says, at the end of paragraph 24,
Any member of the Regent House who wishes to see more detail on this (which is contained within papers to the Finance Committee) can do so by application to the Director of Finance.
I have attempted to do so, but the only paper I have been shown is the Updated paper on Phase 1 financial case (FC(12)100), which contains somewhat less information on the above points than the Report does, though it did explain why the Council feels that the £45m is important.
On issues (a) and (b), apartment blocks sold freehold are notoriously problematic, both for the owners and for the organization responsible for providing the communal services. There are two classes of risk: that of aggregation and the plot being used for unsuitable purposes; and the problems that can arise if the owner becomes anti-social, does not pay the rent charge, or otherwise breaks the covenant. If no such risk assessment has been obtained, one should be, and as a matter of urgency.
On issue (c), one specific alternative I asked about was to sell that land, leasehold, to a housing rental company – and not for sale to the occupants – in the same way that the other commercial land is being sold. My understanding is that would considerably reduce the above concerns, while preserving the University’s freehold interest. If that has not been investigated carefully, it should be.
I also feel that this Report has been less than frank with the Regent House. It does not mention the donation of the land for the market housing as a capital expenditure (though paper FC(12)100 does), and has not explained why the pre-development costs have grown from £13.25m in the Council’s Notice of 26 October 2011 to £25m in this Report. I do not regard these as anathema, but I do feel that a little more openness towards the Regent House would be appropriate.
That is not helped by the discrepancy between paragraphs 22 and 23 of the Report; the former quotes the total capital receipts as £45m, but the graph in the latter shows them as £100m.
Dr D. R. de Lacey (Faculty of Divinity and St John’s College):
Mr Deputy Vice-Chancellor, I must declare an interest in the subject of this Report: I am Chairman of Girton Parish Council and District Councillor for Girton; thereby I am also a member of the Joint Development Control Committee mentioned in the Report, which will decide the details of the development.
The Report before us envisages ‘a high quality environment within the City region’ for staff and students (paragraph 4). In my civic capacity, I have been much involved in the discussions which have already occurred during the development of the plans, and am much impressed at the quality of what is proposed. There are aspects of which the University should be justifiably proud: I note in particular that it ‘will be the first major development in the UK built to Level 5 of the Government’s Code for Sustainable Homes’ (paragraph 12). I am also grateful for the way in which many of my suggestions have been adopted by the planning team.
But I am concerned that there is no acknowledgement in this Report that half of the development lies outside the City and within my Parish. At a recent meeting with the Project Director and his team, I asked that the City-District boundary should be shown on all plans. The response from one member of the team was that this would be absurd, since it might well cut through blocks of housing. Indeed. Does it matter? I believe it does. Residents of the City pay their Council tax to the City; residents in my Parish pay theirs to South Cambridgeshire District Council and to the Parish. Remarkably, at present the amounts are the same to within a couple of pounds, but this may not always be so. So next-door neighbours may find themselves paying different amounts of tax, and receiving different services and benefits (the price of a City leisure card, for instance). Residents within my Parish would also be eligible to apply for significant grants from Girton Town Charity, a privilege denied to City residents. And what will be the status of the faith team vis-à-vis the local parochial clergy? As far as I am aware the Rector of Girton has not been consulted. It is not clear that the project planning has comprehended the potential social conflict such factors may create, and I believe it is incumbent upon the University to address this before approving the project.
There is another issue not mentioned in this Report, and on which I believe the Regent House should be consulted, because the University as a whole will bear the consequences which I fear may be great, and because it is a policy decision, not a management one.
In most new developments, public spaces are handed over to the local authority, to be maintained at public expense – that is, out of local Council tax. In our own case in Girton, a significant proportion of our precept is spent on maintenance of public space, as I believe is the case in the City. The section of the Report on Ownership does not mention the open spaces, but I gather that the plan is to keep the public spaces in University control, and to finance their management with a charge on all residents – in effect, a pseudo-Council tax. Paragraph 17 hints at this.
But these residents will also be paying their normal Council tax, to the City or to my Parish. My fear is twofold. First, that residents will ask themselves why they should pay this tax to the local authority, when the open spaces they use are paid for, by them, separately. What benefit do they gain from this part of their taxes? They will only be subsidising open spaces in Cambridge or Girton which they are not very likely to be using. They may well feel aggrieved at this dual financial imposition. Or they may ask, ‘why should I pay the University to fulfil a function the Councils ought to be doing?’ To refuse to pay the University could be easier than to refuse to pay Council tax; and that could impact on the business plan behind the development.
Secondly, and much more significantly, they might well resent others using facilities for which they, and they alone, are paying. Let me say at once that there is no question that the University itself might adopt this negative attitude. I am assured that the facilities will be open to all – Professor Sanders pointed that out too – and I do not doubt it. But I think if you wanted to use a recreational area which you pay for, and discover you cannot because it is in full use by outsiders, would you not feel aggrieved?
If the scheme is indeed to be one of which we can be proud, it must create a happy and contented community. I assume that good community relations is an issue the University is keen to foster. But I do not believe that the issue of community relations has been adequately considered so far within the project, and regret its absence from this Report.
I have no easy solutions to the issues I raise, but I beg Regents, before they approve the development of Phase 1, to satisfy themselves that an adequate solution exists and is to be implemented.
Professor Sir Peter Lachmann (Department of Veterinary Medicine and Christ’s College) (read by the Senior Deputy Proctor):
Mr Deputy Vice-Chancellor, I would like to make two comments on the Report.
The first concerns the area immediately to the North of the Conduit Head Conservation Area (of which I am a resident). I was pleased to see that a Zone Q, with a maximum building height of 10 metres, has been introduced into the south of Zone R (maximum building height of 15 metres) but consider that it is too narrow (south to north) and too short (east to west). It hardly seems wide enough for a University building. I suggest it should extend to the whole southern half of Zone R south of the street that crosses Zone R. This would parallel the arrangements made for Huntingdon Road and Storey’s Way.
The second point is of much greater potential importance and concerns road access to North West Cambridge. The proposed new western access road from Madingley Road will exacerbate the traffic problems already caused by the Park and Ride having been built to the east rather than to the west of the M11 motorway. The same agencies that approved that decision now seem to be satisfied that putting a further traffic stream across the Madingley Road between the city and the M11 will give rise to no further congestion – a conclusion which I would treat with some scepticism.
The public enquiry into the A14 improvements was postponed and has still to take place. One proposal to be considered is to have a new road from M11 Junction 12 to the proposed junction at Ellington going to the west of Coton and then crossing the Northern bypass. This new road could take all the long distance lorry traffic and leave the A14 for Cambridge commuter traffic. From the point of view of the plans for North West Cambridge, its great advantage would be to allow the M11 between Junction 12 and Girton to stop being a motorway; and to revert to its original purpose as the Cambridge Western bypass. This would then allow access to the North West Cambridge site (and to the West Cambridge site too) on its western border from this stretch of the (ex) M11. This would have huge advantages for traffic flow on both the Madingley Road and the Huntingdon Road. I recognize that the development of North West Cambridge cannot wait for any changes to the A14 to be completed, but it could be a good idea to make provision in the plan for an access road from the west to be built in due course.
Mr M. G. Sargeant (Management Information Services Division):
Mr Deputy Vice-Chancellor, investment by the University is very welcome in further building the Cambridge sub-region as a centre of excellence for the UK. North West Cambridge is an obvious area for this, and I am sure it will bring great benefit.
I would like today to speak as someone who is concerned about housing provision in Cambridge, which is not keeping up with need. I am also concerned about the issue of Town and Gown. Both of these issues are highlighted in my mind in the development of North West Cambridge by the University.
All developments with more than 25 dwellings in Cambridge have to provide 40% social housing. This is to ensure that those who cannot afford to buy a house have access to affordable housing. This is also of advantage to employers as it means that they can employ staff who cannot afford to buy housing locally. The University employs 9,000-plus staff, and a significant proportion of those would not be able to buy their own home in Cambridge, and either travel significant distances or seek rented accommodation in Cambridge. This illustrates why there is a requirement for social housing locally.
The current proposal for North West Cambridge allows anyone to buy market housing, whether employed by the University or not. In contrast, the accommodation for rent is exclusively for people associated with the University. I understand the University’s requirements for postdoctorate and staff accommodation, but this does mean that the access to rented housing is narrowly defined and for University and College staff only:
1. those who are new to Cambridge;
2. anyone coming from overseas;
3. University or College staff in ‘hard to fill’ posts;
4. anyone coming from outside of the Cambridge area;
5. University staff;
6. anyone working for an affiliated organization.
This development therefore is unlikely to fairly meet the needs of many staff who are local and would want to live in Cambridge but can only afford to live well outside Cambridge and travel long distances. It also does not meet the needs of the wider community, unlike other developments in Cambridge.
This brings me on to my second concern. This was an opportunity to build bridges to the wider community in Cambridge. Instead, it creates another area of Cambridge which will be seen as a University enclave. It can be argued that there will be a non-University presence with the sale of housing on the open market. They will, however, be in separate parts of the site and will be chosen by their ability to buy the housing, and not reflect Cambridge as a whole. This development will therefore be seen as another part of Cambridge which is not part of Cambridge as most people know it.
I would therefore ask the Council to advise:
(i) on what basis were the needs assessed for rented accommodation in determining the balance between postdoctorates and employees, and in determining the selection criteria?
(ii) why tenancies for employees are short-term and do not encourage the building of a community?
(iii) why there is no provision of social housing to the wider community which would be expected of developments in Cambridge?
(iv) why have we ended up with a development which, only in a small way, will attempt to integrate the University with the rest of Cambridge?
Mr D. J. Goode (Faculty of Divinity and Wolfson College):
Mr Deputy Vice-Chancellor, there may be uncertainty about many things to do with the North West Cambridge development project – construction delays, rising costs, inflation, house prices, for example – but I think there are a few things about which there is no doubt at all.
First, North West Cambridge is certainly the biggest, and most expensive, and most exciting development project this University has ever considered.
Secondly, good quality short-term accommodation in and around Cambridge for the University’s key workers – which includes the army of postdoctoral researchers who help to make, and keep, us the best university in Europe – is horribly expensive and in short supply.
Thirdly, we need to expand our graduate numbers, but despite an expected increase in graduate admissions of two per cent compound per annum, many Colleges are unable to accommodate any more graduate students.
Fourthly, North West Cambridge is not only the biggest, and most expensive, and most exciting development project this University has considered, it is also the riskiest project this University has ever considered.
I believe we should not, on the one hand, be petrified by fear of the risks, Mr Deputy Vice-chancellor. Nor, on the other, should we be cavalier about them, raising a useless glass to an unseeing eye and declaring: ‘I see no risks’.
This Report recognizes the risks, and the Finance Committee has seen – as have I – a number of sensitivity analyses varying the levels of income and expenditure, and allowing for delays in delivery of the accommodation, showing that in all but the most extreme cases the peak borrowing cap would not be exceeded.
The question the Regent House should be asking itself now is not: ‘Is North West Cambridge a risk?’ Of course it is a risk. No, the question needs to be: ‘Is North West Cambridge an acceptable risk?’ In other words, is going ahead now with North West Cambridge the right thing to do, rather than, for example, delaying the project, or even abandoning it altogether? I believe that the risks of North West Cambridge are real. But I also believe they are acceptable, and I too wish the development to proceed without delay, for we may never again have such an opportunity.
To finish, a quote from Horatio... no, not the contumacious old sea dog again, Mr Deputy Vice-Chancellor, but his first century bce non-nautical namesake and dispenser of sound advice to procrastinators:
Dum loquimur, fugerit invida ætas: carpe diem, quam minimum credula postero.