Skip to main contentCambridge University Reporter

No 6347

Wednesday 14 May 2014

Vol cxliv No 30

pp. 525–557


Report of the Council on the process for the nomination and election of the Chancellor

The Council begs leave to report to the University as follows:

1. In summer 2010, HRH The Duke of Edinburgh indicated his intention to step down as Chancellor on 30 June 2011, shortly after his 90th birthday, having served since his election in December 1976.

2. The process of nominating and electing a successor, as set out in Statutes and Ordinances, precluded any formal steps being taken more than 70 days before the vacancy in the Chancellorship was due to occur. Acting initially informally, the Nomination Board – comprising all members of the Council in addition to sixteen members appointed by the Senate – considered the names of possible candidates. As part of the process, suggestions were received from members of the Senate. At its formal meeting on 16 May 2011, the Board nominated Lord Sainsbury of Turville, K, for the Chancellorship. Three additional candidates were subsequently nominated by members of the Senate, thereby requiring the full existing procedure for the election of the Chancellor to be tested for the first time.

3. The election was held on Friday, 14 October and Saturday, 15 October 2011, and Lord Sainsbury was elected.

4. It was generally accepted that the process had been managed and delivered properly and effectively. However, it was also acknowledged that it would be important to reflect on whether there were any changes which might usefully be made to the regulations for the nomination and election of the Chancellor in light of the direct experience of their operation in practice. The Council, at its meeting on 17 October 2011, therefore, agreed that ‘it would be appropriate, in due course, to review the arrangements for the election of the Chancellor’.

5. At its meeting on 18 March 2013, the Council established a working group to review the current provisions governing nominations and election to the Chancellorship. The Council considered it to be important that the working group was properly representative of the collegiate University and included members of the Senate who were not also members of the Regent House. The working group was comprised as follows:

Sir Graeme Davies (Nomination Board) – Chair

Dr Jennifer Barnes (Pro-Vice-Chancellor, International Strategy)

Mr Charlie Bell (graduate student Council member)

Professor Helen Cooper (Nomination Board)

Mr Mark Lewisohn (external Council member)

Ms Rosalyn Old (President of CUSU 2012–13 and undergraduate student Council member)

Dr George Reid (Head of the Office of Intercollegiate Services)

Professor David Yates (Head of House, Council member)

6. The working group was asked to consider issues both of principle and of process including, but not restricted, to:

The process and mechanisms for nomination and an election (if required);

The timetable for the process;

The role and constitution of the Nomination Board; and

The form and content of communications with the Senate about the process.

In addition, the working group was asked to consider how to simplify both the regulations and the timetable.

7. The working group, in the course of its deliberations and in bringing forward proposals to the Council, was particularly mindful of the following considerations:

i.The Senate is now a much larger body than it was when the existing provisions were enacted and its members are geographically dispersed. It is important to engage the increasingly broad constituency of the Senate in the process both of nominating and of electing a Chancellor. The working group therefore particularly considered the current requirement that voting be only in person. While such a requirement is likely to mean that voting is concentrated amongst the section of the electorate with the most direct involvement in the life and work of the University and the fullest understanding of the Chancellor’s role, and provides a valuable ceremonial opportunity for Collegiate Cambridge to welcome alumni back to Cambridge, it nevertheless potentially constitutes a restriction which in practice disenfranchises the majority of the wider, international alumni community, and which the working group believe should be removed.

ii.The Nomination Board has an important role to play in ensuring that at least one nomination is published on its own authority. It is necessary, therefore, that the Nomination Board is properly representative both of the Regent House and of the Senate.

iii.The Nomination Board is currently restricted to nominating a single individual, meaning that, if two or more excellent candidates emerge, there is no provision for the Nomination Board, in the absence of nominations from members of the Senate, itself to call a vote and allow the Senate to decide.

iv.The current provisions allow members of the Senate to submit formal nominations only after the Nomination Board has published its own nomination, thereby obliging the Nomination Board to nominate a candidate before it knows what nominations are put forward by members of the Senate.

v.It should be possible to initiate the process of seeking a successor to a timetable governed by the date on which the incumbent Chancellor indicated her or his intention to step down rather than, as at present, to a timetable governed by the date at which the incumbent demits office. The timetable should also be devised in such a way as to enable clarity at the very beginning of the process as to the days on which the election will take place.

vi.The obligation in the current regulations effectively to re-open the period for nominations, and to rescind any appointment of days for voting, in the event of the withdrawal or death of a candidate, risks creating unnecessary disruption and delay to the process.

8. Advised by the working group, the Council now, therefore, brings forward proposals to amend the provisions: to reduce the size of the Nomination Board and to increase proportionately the representation of members of the Senate on the Board (to bring it back in line with the proportion applying when the Board was originally created); while maintaining the existing arrangements for voting in person, to allow voting by any other method(s) as may have been approved by the Senate on the recommendation of the Nomination Board; to allow the Nomination Board to put forward more than one nomination should it see fit to do so; to require the Nomination Board to publish all properly formulated nominations made by members of the Senate together with its own nomination(s); and to prevent a candidate withdrawing after nominations have been published and to provide for the Commissary to determine whether an election should continue in the event that a candidate dies or becomes incapacitated in the course of an election. The proposed amended provisions also include changes to the timetable for the process.

9. The proposed amended provisions do not prescribe any particular arrangements for voting other than in person. The working group considered that, having regard to the likely pace of technological development, it would be preferable if the Nomination Board was required from time to time to review methods of voting in the light of technologies prevailing at the time and to promote by Grace of the Senate such method or methods (in addition to voting in person) as it might recommend.

10. However, the proposed amended provisions do provide that no person shall be entitled to vote other than in person unless that he or she has applied to be registered as a voter no later than the deadline for the submission of nominations to the Nomination Board. The working group considered such pre-registration to be necessary to ensure that an electoral roll for voting other than in person was in place in advance of any election taking place.

11. The Council believes that these changes will encourage members of the Senate to participate in greater numbers in the process of nominating and electing a Chancellor. The proposed amended regulations also provide that the changes will apply to elections for the office of High Steward. Such elections were not included within the remit of the working group, but the Council consider that it is appropriate that identical processes should continue to apply to elections for the offices of both Chancellor and High Steward.

12. The Council recommends:

I. That subject to the approval of Her Majesty in Council, the Statutes of the University be amended as follows, and that this amendment be submitted under the Common Seal of the University to Her Majesty in Council for approval, with effect from the date of approval of the above amendment to Statute A (New Statutes and Special Ordinances supplement, p. 1) by Her Majesty in Council:

Statute A


Chapter I


Section 1.

By deleting the words ‘voting in person’.

Section 9.

By deleting the words ‘voting in person’.

II. That, with effect from the date of approval of the above amendment to Statute A by Her Majesty in Council , the regulations for the Nomination and Election of the Chancellor (Statutes and Ordinances, p. 101) be replaced by the following regulations:


1. (a) There shall be a Nomination Board which shall consist of

(i)the Vice-Chancellor and twelve other members of the Council appointed by the Council, of whom at least one person shall be from each of the five classes of membership of the Council prescribed in Statute A IV 2, to serve for a period of office matching their current period of office as a member of Council; and

(ii)twelve members of the Senate, of whom (a) four shall be members of the Regent House elected every four years by the Regent House to serve for four years, provided that of these four at least one shall have been a member of the Senate for not more than fifteen years on the date of appointment, and (b) eight shall not be members of the Regent House and shall be appointed every four years by the Council to serve for four years, provided that of these eight at least two shall be persons who have been a member of the Senate for not more than fifteen years on the date of appointment.

(b)If any member of the Nomination Board ceases to have membership of the body or bodies which rendered them eligible for appointment or election to the Nomination Board, such member’s seat shall thereupon become vacant.

(c)The election of members of the Nomination Board from members of the Regent House shall be conducted in accordance with Regulations 1–5 and 14 of the regulations for the election of members of the Council. If at any election insufficient nominations are received to fill the vacant places, the Council shall appoint to the Nomination Board as many members of the Regent House as may be necessary.

2. The Vice-Chancellor shall be the Chair and the Registrary shall be Secretary of the Nomination Board.

3. The duties of the Nomination Board shall be:

(a)to review from time to time methods for voting in an election to the office of Chancellor and to promote by Grace of the Senate such method or methods (in addition to voting in person) as it may recommend;

(b)to receive nominations made by members of the Senate under Regulation 5 below, and to publish each such nomination provided it is properly formulated according to that regulation; and

(c)to make and publish any number of additional nominations on its own authority, provided always that it shall ensure that the nominee’s consent in writing to be so nominated has been obtained and that, if no nominations are made by members of the Senate under Regulation 5, at least one nomination is published on its own authority.

Only the Nomination Board shall have the right to publish nominations of candidates for election to the office of Chancellor.

4. When the office of Chancellor is vacant or the Chancellor has determined the date on which he or she will cease to hold office, the Nomination Board shall publish a notice of the matter. In such notice the Nomination Board shall also:

(a)invite members of the Senate to submit, by a date specified in the notice (which shall be at least 28 days after the publication of the notice), nominations under Regulation 5;

(b)invite members of the University to submit, by the same date as that specified for submission of nominations under Regulation 5, suggestions of names of any persons, whom they wish to be considered by the Nomination Board for nomination on its own authority; and

(c)appoint one or more days for voting, and specify the arrangements for voting, in the event that more than one nomination is published, including any arrangements for registration as a voter other than in person, as the Nomination Board may or shall have determined under Regulation 7.

The day or days appointed for voting in person need not be the same as the day or days appointed for voting by any other method as may have been approved by the Senate on the recommendation of the Nomination Board under Regulation 3(a).

5. All nominations (other than those made by the Nomination Board on its own authority) shall be signed by not less than fifty members of the Senate, accompanied by a statement signed by the nominee consenting to her or his nomination and submitted to the Nomination Board no later than the latest date specified for submission of such nominations.

6. Within fourteen days following the latest date specified for submission of nominations to the Nomination Board under Regulation 5, the Nomination Board shall publish a notice reporting the names of all nominees and, if there is only one candidate, the Nomination Board shall declare that such candidate is elected.

7. If more than one candidate is nominated, an election by members of the Senate shall be held. Voting shall be in person and by any other method or methods as may have been approved by the Senate on the recommendation of the Nomination Board prior to the publication of the notice mentioned in Regulation 4, provided that no person shall be entitled to vote other than in person unless that person has applied to be registered as a voter no later than the latest date specified for submissions of nominations to the Nomination Board under Regulation 5. The arrangements for registration of voters shall be determined by the Nomination Board.

8. Nominations may be withdrawn at the nominee’s request at any time prior to the publication of the names of nominees under Regulation 6, but not thereafter. In the event that, in the course of an election to the office of Chancellor, a candidate dies or is certified by a medical practitioner appointed by the Nomination Board to be unfit by reason of ill-health to hold the office of Chancellor, her or his candidature shall be cancelled and the Commissary shall determine in his or her sole discretion whether the election shall continue or whether nominations shall be re-opened and the Nomination Board shall give notice of her or his determination. If he or she determines that nominations shall be re-opened, then all proceedings taken under these regulations before the date of the notice of the Nomination Board under this regulation shall be treated as ineffectual and the provisions of these regulations shall apply as if the notice of the Nomination Board under this regulation were the notice mentioned in Regulation 4.

9. The election will be conducted under the Single Transferable Vote regulations and voting shall take place between such times on the days appointed for voting as may be determined by the Nomination Board. The times prescribed for voting in person need not be the same as the times prescribed for voting by any other method as may have been approved by the Senate on the recommendation of the Nomination Board under Regulation 3(a). The returning officer under the Single Transferable Vote regulations may at her or his discretion extend the time for voting in respect of any person who was present to vote in person during the times prescribed for voting.

10. The result of the election shall be published by the Vice-Chancellor. The elected person shall take office with immediate effect (if the office is already vacant) or (if the vacancy has not yet occurred) on the date determined by the existing Chancellor as the date on which he or she will cease to hold office.

11. These regulations shall apply to the election of the High Steward and for such purpose references to the Chancellor in these regulations shall be treated as references to the High Steward.

13 May 2014

L. K. Borysiewicz,Vice-Chancellor

Richard Jones

Flick Osborn

N. Bampos

Fiona Karet

Rachael Padman

Jeremy Caddick

Mark Lewisohn

John Shakeshaft

Athene Donald

Rebecca Lingwood

Jean Thomas

David Good

Mavis McDonald

I. H. White

Andy Hopper

Susan Oosthuizen

A. D. Yates

Report of the Council on the financial position and budget of the University, recommending allocations from the Chest for 2014–15

The Council begs leave to report to the University as follows:

1. This Budget Report reviews the financial position of the University and recommends allocations from the Chest for the financial year 2014–15.

2. Information on trends in staff and student numbers, research, and expenditure patterns is provided in the usual way in Appendices 1–4 (pp. 548-53).


3. The University is continuing to make financial progress. Prudent budgeting, the delivery of efficiencies in teaching, research, and administration, and the raising of funds in support of strategic priorities have contributed to the University’s forecast return to surplus in all years of the planning period. However, the University’s long-term financial target continues to be an annual surplus of 2%–3% of Chest income. This target has not yet been reached and is likely to remain a considerable challenge for the foreseeable future.

4. The economic and political outlook remains uncertain. In the medium term, the outcome of the General Election in 2015 and the Comprehensive Spending Review in 2016 could lead to significant changes in higher education funding and policy, which may be unfavourable to Cambridge.

5. In the short term, indications are that funding for higher education will continue to be constrained. The real value of Home/EU undergraduate fee income is being eroded by inflation each year while the current cap on the £9k fee remains. Meanwhile the annual calculation of the cost of an undergraduate education in the University illustrates a significant subsidy in favour of the student averaging £6k per student over the last two years.1

6. Public funding for science and research continues to be ring-fenced in cash terms at £1.6bn up to and including 2015–16. The majority of this funding is mainstream quality-related research funding of which the University will receive £77.5m in 2014–15. The outcome of the Research Excellence Framework, which will be published in December 2014, will determine the University’s allocation of quality-related research funding from 2015–16.

7. Despite the tough financial climate and intense competition for funding, the University’s research grants and contracts activity has increased. Volume, as measured by direct expenditure, is forecast to improve relative to the Budget Report 2013. This is due, in part, to the transfer into the University of the Cancer Research UK Cambridge Institute and Medical Research Council units as well as the ongoing expansion of the University’s Strategic Research Initiatives and Networks. However, although the increase in volume has resulted in an increase in indirect costs recovered relative to the Budget Report 2013, the Council is concerned to see that the rate of indirect cost recovery in general continues to follow a downwards trend, as a consequence of a decrease in funding from Research Councils and an increase in Charity and EC/EU funding, and by the reductions in indirect costs following the Wakeham review.2 In response, the University has introduced incentives to improve the overall percentage of Principal Investigator time claimed on Research Council UK grants. Further measures will be required to drive significant improvements in indirect cost recovery, however, and these are likely to require major changes in the way in which the University allocates resources and recovers central costs.

8. The delivery of efficiencies in research and in higher education in general is under renewed scrutiny. The government has called for greater and faster progress in the implementation of the recommendations of the Wakeham review3 and has tasked Professor Sir Ian Diamond with a second review of efficiency in Higher Education Institutions, the conclusions of which are to be presented by February 2015. The focus of this review will be on six specific areas, including space and infrastructure utilization, and asset sharing.4 It is important, therefore, for the University to be able to demonstrate, quantify, and monitor efficiency gains. An equipment sharing database, developed in co-ordination with a small number of other universities, is available to facilitate and promote internal and external collaboration. The Council encourages the academic community to take advantage of this facility.5

9. Sustained investment in the University’s estate is essential if the University is to retain its global reputation as a leading provider of teaching and research. However, the University’s Capital Fund is currently fully committed for the next five years with limited capacity for capital investment in the next ten. In recognition of this, the Council, with advice from the Finance Committee, recommends a transfer of £150m from accumulated reserves attributable to the Chest to the Capital Fund towards the cost of replacing the University’s biofacilities. This will significantly alleviate pressure on the Capital Fund and improve the University’s ability to continue to support strategic capital investments. Capital building projects will need to include an increasing component of external or philanthropic funding, however, and the University’s ability to build successful partnerships with benefactors and attract donations will be critical.

Key external risks

10. Assumptions about future pay awards are a key area of sensitivity in the financial projections of this Budget Report. Pay costs met from the Chest exceed £200m and increases in pay inevitably lead to significant additional recurrent costs. A central contingency is set aside to mitigate this, but the risk of significant extra costs remains.

11. The next triennial actuarial valuation of the Universities Superannuation Scheme is 31 March 2014. There is a significant risk of an increase in employer contributions as part of a recovery plan to address a widening deficit, and provision from 2015–16 has been built into a central contingency.

12. The Institute for Fiscal Studies is continuing to forecast the need for substantial public spending cuts beyond the next General Election.6 The funding of higher education may change significantly under the next government. In addition to continued reductions in the HEFCE teaching budget, the current protection of high cost subjects and specialist institutions is at particular risk with significant ramifications for Cambridge, which currently receives £2.7m institution-specific funding towards high cost and distinctive provision. Diversifying income will help mitigate the risk of cuts in public funding, and will increase capacity to direct resources in support of capital planning and other strategic priorities such as the provision of postgraduate studentships. The University’s next fundraising campaign, for which planning is well advanced, will therefore be crucial.

13. Competition for research funding is fierce. In response the University continues to build research capacity in strategically significant areas, and to focus on the development of industrial partnerships.7 The University is also preparing for Horizon 2020, the European Union’s 8th framework programme for research and innovation covering the period 2014–2020. A programme of activities is underway in the University to promote awareness of the scheme and capitalize on its funding opportunities.

Key internal risks

14. In January 2013, the Regent House approved the first phase of the North West Cambridge development project. At a project build life of between 15 and 20 years and at a gross cost to the University of approximately £600m, the development carries significant strategic, financial, operational, and reputational risks. Governance of the project includes experienced external members and an audit plan, specific to the project, is in place.8

15. Following the review of IT infrastructure and support, the University Information Services has been formed from the merger of the University Computing Service and the Management Information Services Division of the Unified Administrative Service (UAS), which are now co-located in the Roger Needham Building. The new Director of Information Services is in place; the transition to the new governance arrangements has been supported by an advisory group.


16. Taking into account the progress made and the risks ahead, this Budget Report recommends allocations from the Chest for 2014–15, which result in a small surplus on the Chest. The Chest is forecast to remain in surplus for the duration of the planning period; however, the scale of the surplus continues to fall well below the University’s long-term financial target for sustainability.

Planning round 2013

Guidance and assumptions

17. In July 2013, the Planning and Resources Committee (PRC) agreed again to continue the planning guidance issued in previous years. Schools and institutions have, therefore, prepared forecasts of income and expenditure assuming a 1% increase in Chest allocation for 2014–15 over 2013–14 and for each year thereafter.

18. Notwithstanding the uncertainties in the external environment, a key message of this year’s planning guidance was that financial prudence should not be to the detriment of strategic investment. Schools have responded to several years of below inflation increases by reducing budgets and accumulating reserves. The PRC has not questioned the legitimacy of holding such reserves, but has agreed on the importance of understanding for what strategic purpose reserves are being held. Therefore, with advice from Finance Division, the PRC recommended that Chest reserves equal to two months’ worth of operating expenditure should be sufficient for general contingencies and that plans to accumulate or hold reserves beyond this level should be in support of strategic objectives.

19. Consequently, in this planning round Schools and non-School institutions reported on their Chest reserves providing details of existing commitments and planned strategic investments. Schools also revisited their risk appetite and reviewed planning assumptions for recurrent Chest expenditure to ensure that they were not being over cautious in preparing Chest forecasts. A programme of work is planned to extend the analysis of reserves to non-Chest sourced reserves, the findings of which will feed into the next planning round.

20. For modelling purposes, the pay award assumed in the planning guidance was 1% per year during the planning period (but see para. 38). Apart from national pay awards all additional pay costs arising from promotions, increments, and regrading are met from within allocations to the Schools and other institutions except where separate provision is made. The Finance Division’s pay model is used to identify how University-level forecasts would change for different pay assumptions.

21. A default inflation assumption of 2% has been used for non-pay inflation in all years unless there have been compelling reasons to adopt an alternative assumption for specific classes of non-pay expenditure.

22. The Resource Management Committee continue to support the use of a Resource Allocation Model (RAM) and RAM Distribution Model to ensure adequate incentives are in place to maximize Chest income and minimize Chest costs. The RAM Distribution Model is based on end-of-year RAM calculations, whereby if a School’s RAM surplus exceeds 5% of its out-turn, then 10% of the surplus above the tolerance band is added to the School’s allocation in the next round. Similarly, if a School’s RAM deficit exceeds 5% of actual out-turn, then 10% of the deficit below the tolerance band is subtracted from the allocation. The operation of this mechanism based on the accounts for 2012–13 has resulted in an increase in core allocation in 2014–15 for one School (see summary of additions to allocation table below).

23. For the purposes of this Report, allocations to Schools and institutions are assumed to be fully spent even if a balance is carried forward to the next year. This is the mechanism by which Chest reserves accumulate.

Financial forecasts

Fees and HEFCE funding

24. Appendix 5 describes Higher Education Funding Council England (HEFCE) funding in 2014–15. Following the introduction of the new student funding regime, the University’s allocation of HEFCE funding for teaching continues to decrease with a reduction of £10m in 2014–15 compared to 2013–14. This is counterbalanced by an increase in Home/EU undergraduate fee income of £16m.

25. The University’s allocation of HEFCE funding for research has increased by £2m compared to the allocation in 2013–14. The change is driven by increases in Charity Support Funding, Business Research funding, and Research Degree Programme Supervision funds.

26. HEFCE have recalculated the recurrent grant for 2012–13 and 2013–14 resulting in a reduction of just over £1.5m for the University. As HEFCE reductions have been a feature in previous years, the University had already made central provision to mitigate this risk. A total provision of £2.5m, included in last year’s Budget Report, will absorb the overall cut to the University’s income.

Actual 2012–13 and forecast 2013–14

27. The actual Chest out-turn for 2012–13 is provided in Table 1 of this Report. The overall position on the Chest is a deficit of £5m compared to a forecast deficit of £6.8m in the Budget Report 2013. The main drivers behind this small improvement are increases in research grants and contracts income, and endowment income and interest receivable, along with a reduction in forecast Estates-related expenditure.

28. Table 2 summarises the forecast out-turn for the Chest in 2013–14. In the 2013 Budget Report, the overall position on the Chest was forecast to be a deficit of £0.3m. This position is now forecast to be a surplus of £3.8m due to further improvements in research grants and contracts income, and endowment income and interest receivable.

29. Income-generating activity funded outside the Chest (excluding Cambridge University Press, Cambridge Assessment, and the Cambridge Trusts) was forecast to generate a small surplus of £3.2m in 2013–14 after making a contribution to the Chest for central costs. This component of the budget is difficult to predict with precision mid-year, but there is currently no reason to expect a significantly different out-turn by the end of the year.

Forecasts for 2014–15

30. Forecast Chest income for 2014–15 is £403m compared to £392m assumed in the Budget Report 2013. The change is due to increases in forecast tuition fee income following improvements in calculation methodology; and increases in endowment, interest and other income, as a result of additional rental income from the acquisition of the Broers Building and increased income from deposit account funds transferred into the Cambridge University Endowment Fund. Research grants and contracts income to the Chest also improves relative to the Budget Report 2013.

31. Chest expenditure for 2014–15 is £5.5m higher than forecast in the Budget Report 2013. A breakdown of the forecasts for 2014–15 is shown in Table 3 (p. 545 ). The increase includes a number of bids for additional allocation beyond the core 1% increase built into the planning guidance. Bids were scrutinized at an annual planning meeting with each School or non-School institution, and reviewed again by the Resource Management Committee. In the current planning round, the Resource Management Committee has agreed to recommend increases in 2014–15 totalling £2.9m as detailed in the summary below. The increases to Schools are cost-neutral, representing their share of premium M.Phil. Degree and undergraduate overseas fee income, and RAM Distribution Model adjustments.9 The additional allocation for the non-School institutions is £1.9m, of which £750k represents the second and final tranche of recurrent Chest funding for Cambridge University Development and Alumni Relations, as agreed by the Council in 2012. The increase for the University Information Services and the majority of the increase to the Unified Administrative Service are cost-neutral and funded by corresponding reductions to the central administered funds.10 The allocation to the Fitzwilliam Museum is conditional on the Museum engaging constructively with all the University’s museums with the aim of identifying opportunities for greater collaboration to ensure that the University achieves value for money from its additional, recurrent investment.

Summary of additions to allocation in 2014–15


Additions to allocation

RAM Distribution Model

Total addition to allocation

School of the Physical Sciences




School of Technology




School of the Biological Sciences




School of Clinical Medicine




Schools total




Institute of Continuing Education



Development and Alumni Relations



University Information Services



Botanic Garden



Fitzwilliam Museum



Unified Administrative Service



Non-School institutions total







32. The Resource Management Committee has also considered the forecasts for the Administered Funds, which are £2.6m higher than forecast in the previous Budget Report.11 These centrally-held funds meet University-wide costs or provide specific streams of funding against which Schools and non-School institutions may bid.

33. The Administered Funds include the maintenance budget which, at just under £17m, is considered to be broadly appropriate in the short term. However, growth in the University Estate under the Capital Plan will demand an increase in maintenance provision, and an uplift in the Chest allocation of just under £3m has been built into provisional forecasts for 2016–17. Estate Management continues to work on a new forecasting model and will be conducting a wider review of the maintenance function in 2014, the results of which will inform forecasts for the next planning round.

34. The Operating Budget described in this Report is developed and managed on a fund accounting basis. The University’s annual Financial Statements are prepared on a financial accounting basis consistent with generally accepted accounting principles. A number of adjustments are needed to convert the Operating Budget to a format comparable to the Income and Expenditure account seen in the University’s Financial Statements. The main adjustments are to remove capital expenditure from the Operating Budget and bring in a depreciation charge, and to estimate the amount of spend against reserves and build-up of reserves. To aid comparison with the Financial Statements, such a conversion of the Operating Budget for 2014–15 is shown in Table 5 (p. 547 ). The Council considers, however, that the format used in Table 3 is the appropriate one for planning.

Forecasts for 2015–16 to 2017–18

35. The forecasts for the Chest show a surplus across the planning period fluctuating between £1m and £4m as summarized in Table 4 (p. 546 ).

36. Tuition fee income beyond 2014–15 is based on expected changes to the composition of the student population and the changing fee structures. A significant increase in tuition fee income is forecast from 2017–18 at which point the number of undergraduate clinical students is expected to increase from 160fte per annum to 273fte per annum. The forecast additional income to the University is £1.65m, although there will be significant increases in accompanying support costs.

37. Projections of expenditure beyond 2014–15 have been built up from the detailed plans at School and institution level submitted in December 2013.

38. Pay awards have been assumed to be 1% per annum across the planning period. However, in view of the level of uncertainty about future pay awards, a contingency, which could accommodate up to a 2% pay award in any one year, continues to be set aside against the risk of higher pay than currently assumed.

Capital planning

39. The University’s Capital Fund is already fully committed for the next five years. The development of philanthropic and industrial partnerships and the ability to translate these into successful donations or collaborations will be fundamental to the realization of the University’s capital plans now and into the future. It will be equally important for the University to react quickly to calls for bids for capital funding from schemes such as the UK Research Partnership Investment Fund.12 The government has extended this scheme to 2016–17, but competition for funding is intense and successful capital projects must leverage committed private co-investment of at least £2 for every £1 of public funding.

40. The government’s strategy for funding scientific or research infrastructure of national importance is the topic of a report, ‘Scientific Infrastructure’, by the Select Committee on Science and Technology.13 The report calls for a long-term, national strategy and investment plan for scientific infrastructure in order to support research excellence and promote sustainability. In response the government is consulting the research community, giving due consideration to both capital and operational costs. The findings will be central to the Science and Innovation Strategy that is to be published as part of the Autumn Statement 2014.


41. This year’s Budget delivers an improved position on the Chest with a surplus forecast across all years of the planning period. However, while the University is now in a stronger financial position, it has not yet reached the lower threshold of its long-term financial target of a surplus of 2%–3% of Chest income.

42. The medium-term outlook remains uncertain and there are significant external and internal risks ahead. The assumptions upon which this Budget is based, and the Chest surpluses which this Budget forecasts, will undoubtedly require revision during the planning period. Nevertheless, the University has a very strong balance sheet and, provided that it continues to maintain careful control over spending, it is well-placed to continue to support its mission of developing education, teaching, and research at the highest international levels of excellence.

43. The Council recommends:

I. That allocations from the Chest for the year 2014–15 be as follows:

(a) to the Council for all purposes other than the University Education Fund: £180m;

(b) to the General Board for the University Education Fund: £216m.

II. That any supplementary HEFCE grants which may be received for special purposes during 2014–15 be allocated by the Council, wholly or in part, either to the General Board for the University Education Fund or to any other purpose consistent with any specification made by the HEFCE, and that the amounts contained in Recommendation I above be adjusted accordingly.

13 May 2014

L. K. Borysiewicz, Vice-Chancellor

Richard Jones

Flick Osborn

N. Bampos

Fiona Karet

Rachael Padman

Jeremy Caddick

F. P. Kelly

Shirley Pearce

Stephen J. Cowley

Rebecca Lingwood

John Shakeshaft

Athene Donald

Mavis McDonald

Jean Thomas

David Good

Rosalyn Old

I. H. White

Andy Hopper

Susan Oosthuizen

A. D. Yates

Budget Report - Tables and Appendices