Reports

Twenty-fourth Report of the Board of Scrutiny

Introduction

1. The Board of Scrutiny provides independent analysis and oversight on behalf of the Regent House, examining the Annual Report of the Council (including that of the General Board to the Council); the Abstract of the Accounts; and any Report of the Council proposing allocations from the Chest. It has the right to comment on related matters that it believes should be drawn to the attention of the University, including issues of policy. Further information can be found on the Board’s website1 and in Statutes and Ordinances.2 The Board has the right of reporting to the University and this is its Twenty-fourth Report.

2. As mentioned in the preamble to its Twenty-third Report (Reporter, 6521, 2018–19, p. 42), the Board aims to encourage members of the Regent House to think about and engage in governance as part of a process intended to be complementary to, not in contention with, the Council and the General Board. Nevertheless, following the recommendations of the Wass Syndicate, the Board was established to provide an additional mechanism for holding the Council to account for the increased powers it had acquired, particularly in relation to the items that the Board is required to examine.

3. The Board hopes to assist the Council as well as helping members of the Regent House to engage with and make decisions about business; for example, through commenting at Discussions, or by opposing, supporting, amending or promoting Graces. The Board may be able to comment more freely than the Council, or give greater attention to certain areas of business, and although it has some capacity to act on its own account, it cannot supplant the responsibilities of the Regent House collectively, any more than it can perform the work of the Council. We hope to encourage discussion and collaborative thinking across the University.

Activity of the Board 2018–19

4. Sixteen meetings of the whole Board took place, including three at which Senior Officers attended as guests: the Vice-Chancellor, Professor Stephen Toope; the Pro-Vice-Chancellor for Strategy and Planning, Professor David Cardwell; and the Registrary, Ms Emma Rampton.

5. Smaller working groups met with the Senior Pro-Vice-Chancellor for Education, Professor Graham Virgo; the Pro‑Vice-Chancellor for Institutional and International Relations, Professor Eilís Ferran; the Pro-Vice-Chancellor for Research, Professor Chris Abell; the Head of the Office of Postdoctoral Affairs, Ms Karina Prasad; the Head of the University Counselling Service, Ms Geraldine Dufour; the Head of the Disability Resource Centre, Mr John Harding; the Head of Staff Counselling, Ms Michelle Reynolds; the President of Lucy Cavendish College, Professor Dame Madeleine Atkins; the Deputy Chair of the Council and Chair of the Council’s Governance Review Working Group (until December 2018), Mr John Shakeshaft; the Chief Financial Officer, Mr Anthony Odgers; the Director of Finance, Mr David Hughes; the Director of Estates Strategy, Dr Jason Matthews; the Development Manager, Mr Stuart Gray; the Executive Director of Development and Alumni Relations, Ms Alison Traub; and the Development Officer, Ms Jenny Moule.

6. Further information and assistance was provided by the Head of the Registrary’s Office, Dr Regina Sachers; by the University Draftsman, Ms Ceri Benton; and the Personal Assistant to the Registrary, Ms Alison Wheeler-Heyn. The Board is duly grateful to all of them for their time and thought and records its thanks.

7. During the year Mr Timothy Milner was elected Proctor by the Regent House in late February, re-joining the Board ex officio until 1 October 2019 in place of Dr John Xuereb. Having recently completed a term on the Board and been Chair 2017–18, Mr Milner did not resume active membership for this period and so has not signed this Report. The Board again commends its Support Officer, Ms Rachel Rowe, for her assistance with working notes, agendas and minutes.

Finance

Financial Statements

8. The financial statements and associated historical trends were analysed in some detail in the Board’s 23rd Report, and it is not intended to replicate that detailed historical analysis this year.

9. In 2017–18, the University saw total income increase to £1,965m, a 5.1% increase on the previous year and a net surplus (after gains on investment and various other non-cash items) for the year of £391m, which represents a decrease from the equivalent figure for 2016–17. The net surplus before gains on investment and other items is more finely balanced in both 2017–18 and 2016–17.

10. The overall financial result seems to have broadly followed the trends of recent years, which include a steadily growing total income and a reasonably well-balanced total expenditure. Net assets for the University grew by 8.1% and stood at £5.2 billion as at 31 July 2018.

11. The individual components of total income, including tuition fees, research grants and investment income have mostly seen continued growth broadly in line with trends observed in the recent past. The robust growth trends observed in recent years for many significant income items may prove to be harder to sustain in the future.

12. Research income grew by a notable 13% compared to 2016–17, to £524.9m, and represents both the largest single source of income and also (this year) the fastest growing one.

13. The Board notes the comment in the 2017–18 Reports and Financial Statements that the University’s net surplus has benefitted from ‘improved levels of cost recovery on certain categories of externally-funded research’ (Reporter, 6530, 2018–19, p. 201). Although limited further quantified detail is provided, this is an encouraging statement as the ongoing growth in research income has the potential to be financially problematic for the University if cost recovery is not also improved.

14. The Board recommends that the University develop and publish internally a more detailed financial model to illustrate the trends and issues associated with cost recovery on externally-funded research, a long-term strategic issue for the University.

15. The Board’s 23rd Report drew attention to the potential for growing pressures on staff costs due to higher cost of living awards after a sustained period of below-inflation increases and also due to higher employer pension contributions to the various defined benefit pension schemes, including the USS. It is noted that staff costs increased by 6% in 2017–18 compared to the previous year. Whilst this change reflected some one-off factors in the year, the Board notes that there are growing sources of underlying upward pressure associated with pay and reward initiatives such as the Academic Career Pathways, Professorial Pay Review and Contribution Schemes – all of which are currently Chest-funded. These costs are recurrent and anticipated to rise sharply in the next few years.

16. Whilst the Board is supportive of the initiatives the University has taken to address the very real issues motivating these schemes, it believes that there will inevitably be ongoing upward pressure on this category of expenditure over the next few years, and the overall financial effect on the University will need to be monitored closely.

17. Capital expenditure on the operational estate and equipment and IT amounted to £269.6m in 2017–18. This level of expenditure continues to exceed the current cash generating capacity of the University’s operations (even after accounting for specific donations and grants for the relevant capital projects) and remains unsustainable in the longer term. However, in the short term measures have been used such as external debt financing, including the proceeds of previous bond issues. As noted in the Board’s 23rd Report, capital expenditure will almost certainly have to fall significantly to more sustainable levels in the years ahead, particularly as staff costs continue to grow ahead of inflation. The Board understands that the University has already taken steps to defer or cancel certain planned capital projects and that these steps are expected to bring down such expenditure in future years.

18. The Board also notes an increase in the depreciation charge of around 5% in 2017–18 compared to the previous year as a result of significant fixed asset additions during the year – primarily the construction of new buildings. Depreciation is a non-cash charge but reflects a real long-term cost to the University, namely the mounting cost of maintaining the University’s rapidly growing building stock.
 

Allocations Report

19. The Allocations Report for 2019–20 is notable for several reasons. For ease of reference, these are listed under separate headings.

Strategic planning

20. There is an explicit statement in the Allocations Report that the University intends to implement ‘an altogether clearer distinction between an annual process of financial planning and forecasting, and longer-term strategic planning.’ It is the University’s plan to undertake a comprehensive strategic review on a rolling basis of each School and Non-School Institution (NSI) over the next few years.

21. The Board’s 23rd Report discussed in some detail the apparently disproportionate emphasis within the Allocations Report on short-term budgeting compared to the apparent lack of discussion or linkage to long (or even medium) term priorities. The commitment by the University to carry out some additional longer-term thinking is a positive first step down this path. The Board looks forward to seeing the outputs of these strategic reviews as they emerge.

Transparency and completeness of budgetary framework

22. The Pro-Vice-Chancellor for Strategy and Planning remarked at a Discussion on 2 July 2019 that the ‘Director of Finance and his team have made good progress to improve our understanding of the University’s overall operating budget and forecasts, moving away from a narrow focus on the Chest’.

23. The Allocations Report also talks of seeking ‘to establish a relatively simple model which promotes greater financial transparency and enables Heads of Department and others to identify and take forward academically-driven activity’. A key component of such a model is a mechanism whereby Departments which carry out activities that generate an income stream or other financial return (such as a taught M.Phil. course) might be able to benefit in a fair and transparent way from that extra income.

24. Again, these statements are to be welcomed, especially given the two Recommendations in the Board’s 23rd Report suggesting that the existing financial reporting format be refined ‘to present a more holistic and balanced view of our annual budgeting decisions’, and also that a mechanism to facilitate investment by Schools and NSIs in projects with payback periods be developed.

25. It is important, however, that the statements of intent are translated into a practical, workable framework. The Board notes that the current financial reporting format in the Allocations Report remains the same as it has been historically. It also notes that some form of income incentivisation model for Schools has been under discussion for a number of years, but the only impact of this to date has been to some £1.55m of allocations in 2019–20 (i.e. just 0.3% of total Chest allocations in the year). There is a long history of the central bodies wanting to better understand the University’s financial position, beginning in the 1990s with the Disaggregation Analysis, the evolution of a Resource Allocation Model, and more recently, a model of the University’s finances commissioned from external consultants. The Board looks forward to further tangible progress on these important administrative matters, but suggests that delivering useful reform in these areas, whilst a very worthwhile objective, may prove to be more complex and challenging than expected.

Changes to allocations

26. In the context of ongoing forecast Chest deficits over the period to 2022–23, the Planning and Resources Committee (PRC) has decided not to implement the previously budgeted 1% increase to Chest allocations for 2019–20 compared to 2018–19. Furthermore, the PRC has sought to limit any additional allocations ‘to those mandatory elements required by the University’s regulators or fundamental to the University’s ability to demonstrate due accountability for the use of public funds’.

27. The latest forecast Chest allocations for 2019–20 do, nonetheless, contain some agreed changes, including commitments from some School and non-School institutions to reduce Chest expenditure by specific amounts. The impact of some of these commitments will be to drain Chest-sourced reserves at the level of individual institutions.

28. It is interesting to review the revised Budget for 2019–20 and Projections through to 2022–23 to identify where Chest allocations are still expected to grow the fastest over the next few years:

Chest funds £’000	2019–20	2020–21	2021–22	2022–23	Change %
Schools	197.9	204.8	207.4	209.5	+5.9%
Academic institutions and services	54.1	55.1	55.8	56.5	+4.4%
Staff and student services	1.5	1.5	1.5	1.6	+6.7%
UAS	44.1	43.9	44.4	44.8	+1.6%
University-wide initiatives	4.9	6.1	8.0	9.2	+87.8%
Administered Funds
Teaching and research	126.7	124.7	126.9	129.0	+1.8%
Contingency	5.9	5.9	5.9	6.0	+1.7%
Human resources	2.9	4.2	4.2	4.2	+44.8%
Operational	4.7	4.9	5.2	5.4	+14.9%
Estates	58.0	60.1	62.0	63.4	+9.3%
General	7.5	7.5	7.6	7.6	+1.3%
Total expenditure	508.2	518.7	528.9	537.2	+5.7%

29. The growth of Chest allocations to Estates is notable, especially as it starts from a significant absolute allocation in 2019–20. It is noted elsewhere in this report that concerns exist in relation to some of the management structures within Estates, particularly in relation to Health and Safety compliance matters. The Board hopes that the proposed investment will lead to improvements in this important area over the next few years. A programme is in development to create an effective maintenance organisation which will establish links between buildings and works required to achieve defined levels of performance.

30. Chest allocations to ‘University-wide initiatives’ are forecast to grow sharply, albeit from a low base of £4.9m in 2019–20. This allocation includes the costs of the ‘People Strategy’ initiative (such as Senior Academic Pathways and Professorial Pay Review) which is expected to grow from a recurring cost of £575k in 2019–20 to £4.15m in 2022–23, the increase in USS pension contributions (expected to amount to around £4m per annum) and an allocation of £500k per annum towards Building Compliance work by the Estates Division. The Board understands that the £500k investment is designed to fund a more effective maintenance organisation and an improved resource management system.

31. There are also significant additions to the categories of ‘Human Resources’ and ‘Operational’ which reflect some projected increases of certain pay and reward schemes and some anticipated increases in certain operational costs, such as insurance, bank fees, audit fees, etc.

32. The above presentation is the University’s current reporting structure for overall Chest allocations. Picking up on the previous points in relation to transparency, it is clear that some of the categorisation seems slightly strange – ranging from tiny allocations to, for instance, ‘Staff and student services’ to very much larger ones to very broad categories such as ‘Schools’. The Board believes that the allocations summary could be presented in a more useful format – perhaps involving a breakdown of the largest categories so that the underlying components are clearer. Ideally, the allocations would be analysed at a level of granularity consistent with where significant strategic planning takes place such as an individual School or Non-School Institution. This would potentially facilitate the tracking of changes in allocations over time.

33. The Board recommends that the presentation of the Allocations Report and other budgeting information is improved so as to provide analysis at a more meaningful and, in budgetary terms, logical level of granularity. This might mean developing a standard reporting format at the level of a School or Non-School Institution.

Cambridge University Development and Alumni Relations

34. It was noted in the Board’s 23rd Report that the largest single area of growth in allocations from the Chest during the period 2012–19 was to Cambridge University Development and Alumni Relations and Cambridge in America (CUDAR/CAm) with a total additional allocation of £7.1m over the seven‑year period. While the successes of CUDAR are often claimed in terms of a broad range of positive outcomes, historically there has been no straightforward financial account of its functions to help form a view of the return on the University’s investment in it.

35. The increased allocations started shortly before the arrival of a new Executive Director of Development and Alumni Relations in 2013, a major planned expansion of what was then the Cambridge University Development Office (CUDO) and the start of a £2 billion fundraising campaign at the start of the academic year 2011–12. The target completion date for the Dear World fundraising campaign is understood to be the end of academic year 2021–22, and the £2 billion target relates to fundraising by both the University and the Colleges.

36. Given the very significant investment that the University has put into charitable fundraising in recent years and the ambitious fundraising targets it has set itself, it seems appropriate to take stock of the financial impact of this effort. The Board has obtained some interesting long-term data on fundraising by the University:

Table 1 – Fundraising record under CUDO (2005–11)

£’000	2005	2006	2007	2008	2009	2010	2011	Average
New funds raised (excl. large single gifts)*	37,595	45,815	47,098	71,259	32,152	52,215	73,309	51,349
Large single gifts*			82,000					11,714
Cash received**	22,931	28,441	51,203	44,375	43,885	39,282	49,898	40,002
Chest allocation – CUDO	3,036	3,029	3,342	3,406	4,041	3,998	3,657	3,501
Chest allocation – CAm	1,278	1,635	1,659	1,879	1,750	2,402	2,184	1,826
Estimated other costs covered by the University****		312	366	326	320	354	330	335

Table 2 – Fundraising record under CUDAR (2012–18)

£’000	2012	2013	2014	2015	2016	2017	2018	Average
New funds raised (excl. large single gifts)*	50,281	79,208	58,131	79,038	79,237	91,308	99,580	76,683
Large single gifts*							85,000	12,142
Cash received**	44,234	63,079	40,297	42,770	64,551	71,955	103,781	61,523
Chest allocation – CUDAR***	4,143	5,297	7,654	9,336	8,457	9,785	9,978	7,807
Chest allocation – CAm	2,281	2,304	2,253	2,290	2,229	3,243	3,955	2,650
Estimated other costs covered by the University****	484	478	539	696	782	841	999	688

Figure 1. Funds raised vs. cost of operation, CUDO

Figure 2. Funds raised vs. cost of operation, CUDAR

*	‘New funds raised’ comprises commitments (pledges) plus one-off gifts in kind to the University.
**	‘Cash received’ is all cash actually received by the Development Office in relation to fundraising. It includes disbursements from CAm. It does not include gifts received directly by Departments or the Research Office, nor any gifts-in-kind or gifts banked by the Addenbrooke’s Charitable Trust or Cambridge Trust. New funds raised should eventually be turned into cash received, even if there is often a time lag before this happens.
***	‘Chest allocation’ to CUDAR / CAm is the annual budget for the respective institution from the University.
****	‘Estimated other costs covered by the University’ – in addition to the Chest allocation, the University also provides CUDAR with office space and other central support. An effective subsidy has been estimated using assumptions from the RAM model

37. Table 1 tracks certain key fundraising metrics in the seven years leading up to the emergence of CUDAR out of CUDO. It highlights a relatively smaller ‘steady state’ Development operation in Cambridge, although a growing Development operation in the United States. Over this period, the office managed to raise an average of £51.3m per annum plus a single large gift of £82m in 2007, which equates to an overall fundraising average of £63.1m per annum.

38. To achieve this, the office had an average budget of £3.5m per annum for CUDO and a further £1.8m per annum for CAm. If we add to this an estimated £0.3m of other University costs associated with the fundraising operation, we get to an estimated total (budget) cost of the Development operation of around £5.7m per annum over the period 2005–11. Average costs as a percentage of average fundraising spend was therefore an estimated 9.0% over this period.

39. Table 2 tracks the equivalent fundraising metrics in the seven years since the renaming of the Development Office as CUDAR. On the same basis, CUDAR has managed to raise an average of £76.7m per annum plus a single large gift of £85m in 2018 which equates to an overall fundraising average of £88.8m per annum.

40. The cost base of CUDAR over the period 2012–18 reflects significant growth in both CUDAR and CAm. The average budget for the period was £7.8m for CUDAR and £2.7m for CAm. If we add an estimated £0.7m of other University costs associated with the fundraising operation, we get to an estimated total (budget) cost of the Development operation of £11.1m per annum. Average costs as a percentage of average fundraising spend was therefore an estimated 12.5% over this period.

41. In conclusion, we can see on average a doubling in the annual spend on Development (equivalent to an extra £5.4m per annum) over the last seven years compared to the seven years before that. This doubling in spend has been associated with a material increase in funds raised of £25.8m per annum (on average) which is equivalent to a 41% uplift.

42. However, this analysis understates CUDAR’s more recent record. A detailed review of Table 2 indicates that the cost base of CUDAR increased rapidly over the period 2012–15 as the office recruited a new team of fundraisers. There was then a time lag before this led to a notable increase in funds raised over the period 2015–18. This is consistent with anecdotal evidence that it takes a new fundraiser two or three years to start to become fully effective in a new organisation.

43. Finally, the Board understands that 2018–19 will be another strong year in fundraising terms – similar to 2017–18. It has also been announced by CUDAR that the overall Dear World campaign has recently passed a total fundraising target of £1.5 billion. There are three years to go before the end of the originally envisaged campaign period, and, if the current rate of fundraising is sustained, it is looking likely that the original £2 billion target will be met.

44. Despite the financial evidence presented in the tables above, the Board has received comments indicating scepticism among some members of the Regent House as to the true underlying record of CUDAR.

45. Some of this scepticism seems to arise from individuals and institutions who have not identified any tangible benefits to themselves from CUDAR’s work. It is undoubtedly true that donations in recent years have not benefited all parts of the University equally. It is also true that the bulk of the fundraising in recent years has been accounted for by a handful of very large gifts – in 2017–18, for instance, 70% of total funds raised by the University were accounted for by four gifts of £9.25m or more. This has further exacerbated an existing tendency for Development effort to deliver benefits that end up concentrated amongst a relatively small group of beneficiary institutions within the collegiate University.

46. Discussions of CUDAR almost inevitably raise the potential for tension between CUDAR and College fundraising activities. It is not within the Board’s remit to comment on College matters, but it notes that the memorandum of understanding between CUDAR and the Colleges indicates that CUDAR focuses on soliciting gifts of over £1m while, in practice, most giving to Colleges involves gifts of less than that figure. It is therefore difficult directly to compare fundraising success between CUDAR and the Colleges.

47. The financial evidence that the Board has been able to obtain suggests fairly clearly that the decision to invest in and expand the Development Office from 2013 onwards, whilst requiring some difficult allocation decisions at the time, appears in hindsight to have been justified in terms of bringing more funds into the collegiate University.

48. The Board does, however, note that it took a surprisingly long time to obtain relatively basic historical financial information from the University’s financial systems to complete the above analysis. It seems that performance reporting on CUDAR’s activities has been carried out in the past by CUDAR itself using its own systems. When the Finance Division was asked to produce figures, it was found that there were difficulties reconciling the Finance systems to CUDAR’s own systems. The Board is left with a sense that the University does not always have the capacity and systems in place to assess the performance and activities of individual institutions, even one such as the Development Office, a non-academic institution where performance data should be comparatively easy to obtain and targets comparatively easy to set.

49. The Board recommends that the University’s capacity to measure and assess quantifiable performance data on individual Institutions (particularly non-academic Institutions) is reviewed, and further it is considered whether sufficient formal objectives are being set and systematically reported on.

Estates

Financial management of future developments

50. The Annual Report of the Council for 2017–18 (Reporter, 6530, 2018–19, p. 181) noted that in May 2018 it agreed to proceed with a bond issue of £600m for income-generating projects and to provide the University with options for capital projects outside those directly enabling academic teaching and research activities. Such projects are envisioned as bringing indirect benefits, including addressing the housing challenge and providing alternative income streams during a time of financial volatility. Following the execution of this bond, the Board understands that the Council is developing plans for the University to establish its own property company, to oversee relevant income-generating projects approved for the development of the non-operational estate using the proceeds of the bond, and other sources of finance.

51. Whilst acknowledging these plans are at an early stage, and recognising that this may well be a sensible management structure for such projects, the Board has concerns relating to the scope and remit of such an organisation and to its governance.

52. The first arises because the company’s scope and remit are as yet unspecified: it is not clear if projects may be undertaken by such a company that are solely income-generating or if they must also address the University’s broader mission; the phrase ‘significant indirect benefits’ needs to be clarified. For example, would the development of housing for market sale be considered an acceptable income-generating activity if commercially profitable, and would this undermine plans for the development of affordable housing for University staff?

53. The second arises because governance of such a company seems likely to cause tension between the University’s internal requirements and external commercial pressures. To be commercially effective such a company must be able to respond quickly to income-generating opportunities, but this must be balanced with the requirement for University oversight, which involves both more complex stakeholders and a more deliberative style of decision-making than most commercial organisations.

54. Should the Council decide to proceed, the Board would expect to see further details of the plans and ambitions for the property company, as well as clarification on the above points when the Council reports to the University.
 

Health and Safety compliance

55. The same Annual Report also notes that the Council was made aware of improvements made to ‘the management, governance, and assurance of building compliance’ across the University’s estate. We are informed that the Directors of Health, Safety and Regulated Facilities, and of Estates were developing a methodology to address the shortcomings in current practice, which was due to be finalised in Michaelmas Term 2018. At the same time, the University is updating its means of recording ‘built assets’ and demonstrating compliance with Health and Safety legislation, the better to comply with legal requirements.

56. This apparently reassuring paragraph omits to mention that two external reports were commissioned to look into these shortcomings. Subsequently a group of senior officers was convened to take forward the process of developing the new methodology and systems. Such failings of compliance are a matter of significant concern to the University, to which the Council urgently needs to respond.
 

Senior leadership

57. Unfortunately, since announcing these plans to develop a new methodology to address concerns in Health and Safety compliance, Estates has experienced a significant number of departures from its senior management team, which will have consequences for the Division’s ability to effect change. Rectifying these important compliance problems will entail a substantial programme of work extending over a number of years, involving stakeholders across the University and changes to existing systems, procedures and protocols.

58. The Board is concerned that such an interruption in the senior leadership of Estates staff at a time of significant and urgent change creates a serious risk to the University in ensuring that it is Health and Safety compliant across the estate. It is not clear that we have the capacity to deliver such a programme, or how it will be implemented and managed, or what the governance of such a process will be, or who will be responsible for auditing its progress and success.

59. The Board recommends that the Council publishes a Notice setting out the new Health and Safety compliance methodology, including both the governance structure for monitoring it and the timetable for its full implementation.

Education

60. In the Board’s 23rd Report a key focus was on the University’s recruitment strategy, agreed with the Colleges, to increase postgraduate student numbers by 13.1% over 2017–22.3 In passing, the Board noted the significance of increasing numbers of international students and postgraduates in the University’s financial strategy; the commentary focused, however, on the concomitant issues resulting from such an increase – in particular, the impact on the resourcing of Departments and central support services, on the student experience, and on the Colleges.

61. The Board’s initial focus this year was to further explore the management of this area, in particular regarding the impact on the central support services.

Impact of increased student numbers on central support services

62. The Board welcomes the fact that there have been investments in staffing in both the University Counselling Service (UCS) and the Disability Resource Centre (DRC), as well as re-housing to a new central service building on the New Museums site. Both services are, however, reporting notable growth in students accessing their services, which these staffing increases have not matched, either in terms of advisory or administrative resources.

63. At the DRC, for instance, there exists an adviser-to-student ratio significantly above the level recommended by national governing bodies. HEFCE guidelines indicate an adviser-to-student ratio of 1:200.4 The DRC is currently reporting a ratio of 1:560, which would equate to 1.5 minutes of available support per student per week (if each was supported equally). Compared with 35 students who had disclosed a mental health difficulty in 2008, the DRC was supporting 1,100 in 2019 (a 3,000% increase in 11 years), with 3,250 students being supported overall. Total numbers have risen by an average (mean) of 15% per annum over the past ten years, from 600 in 2008 to 3,250 in 2019 (a 440% increase in 11 years).5 It is also worth noting that the DRC is reporting declining levels of student satisfaction over a sustained period in both internal DRC Surveys and external quality assurance measures (Student Barometer).6

64. At the UCS, in 2016–17, 1,575 students accessed individual sessions, equating to 6,505 sessions overall, with an additional 1,228 group sessions attended. In 2017–18, this latter figure rose to 1,936, which represents 10% of the student body and an increase of 23% on the previous year. The clinical service as a whole (that includes counselling at the UCS and College-based Counselling, Sexual Assault and Harassment Advisers and Mental Health Advisors) saw 2,152 students in total, which represents 11% of the student body. In the past four years, the service has experienced a 74% increase in the number of students applying to access the service from 1,565 in 2013–14 to 2,717 in 2017–18.7 The percentage split undergraduate to postgraduate accessing the DRC has been 57%–43%, with the UCS reporting a similar demographic of 48% to 46%, with 6% not disclosing.7

65. Such increases in demand are mirrored across the sector and some may reflect a reduction in the stigma around accessing support. Nevertheless, both services also report an increase in the complexity of presentations requiring greater in-depth support. Additionally, the intensity of Cambridge teaching terms does not allow students to take time out. It is therefore crucial that services are resourced so that they can meet demand in a timely manner. It should not be overlooked that a key focus of the Office for Students (OfS) is on reducing retention and achievement gaps. The largest cohort of disabled students that the DRC now supports (both numerically and in terms of adviser time) is students with mental health difficulties. This is the cohort where the University has the largest shortfall from the sector average in both achievement and retention.

66. Both services have introduced a range of initiatives and programmes to raise the profile of the support on offer as well as to create effective means to deliver it. Yet there is only so much that can be done with finite resources and these will become ever more stretched if student numbers increase. Since the responsibility for welfare resides in the Colleges, funding arrangements exist whereby the Colleges finance the direct costs of central provision, whilst the Chest covers administration and facilities. The Board notes that one area worth exploration could be greater integration of provision between the University and the Colleges, both to ensure that students do not ‘fall between the cracks’ but also to profit from greater collaboration and pooling of resources.

67. The Board further notes that this situation is mirrored in the Staff Counselling Service, which is also reporting higher access, with the key concern (accounting for 80% of cases) being work-related matters; notably serious infrastructure issues such as housing, transport and childcare provision; the fact that the duties and responsibilities of roles are expanding without additional resources (a key stress point being information overload, primarily through email); and anxiety surrounding Brexit.

68. With expansion in student numbers, such concerns are only likely to worsen if sufficient resources are not invested in support for students and staff.

Education: Internal initiatives

69. This year has seen three new initiatives – the Transition Year, the Adjustment Process, and the five-year Education Framework.

70. Whilst exemplary in their intentions, the manner in which they have been announced has sometimes lacked perspicuity, potentially exposing the University to greater internal and external criticism than it warrants.

71. The Transition Year, for example, which is an integral part of the University’s response to the Office for Students’ requirement for greater ‘ambition’ with respect to attracting students from certain polar quintiles,8 was announced publicly at the start of the academic year 2018–19 as an initiative that would be ‘free’ for the students selected to join the programme. However, the resource requirements remain unclear and an outline of the programme has yet to be devised, with the result that raising the necessary philanthropic funding for its delivery has not started and the trial launch, originally proposed for 2021, has been pushed back to 2022. Since the intention not only to run but fully finance this programme has, however, already been announced, the University has arguably unnecessarily created the possibility that there will be difficulty in meeting delivery goals.

72. The Board also notes that whilst the University has pledged to fully fund the Transition Year as part of its widening participation agenda for undergraduate entry, an International Pre-Master’s programme has already been devised and is being actively recruited. Whilst completion of the programme will not guarantee progression onto a Cambridge postgraduate course, like the Transition Year it is envisaged that it will be a further conduit for selecting the best students. Unlike the Transition Year, however, it will not be free, costing ca. £20k9 and further underlining the role of international students in the University’s financial strategy.

73. The Adjustment Process, on the other hand, which is also related to widening participation objectives, has received relatively little attention, either internally or externally, despite this being the first year of the University’s participation. This is the process whereby students who have performed better than expected in examinations and who had applied to the University but had been rejected, now have the possibility of acceptance. As well as supporting widening participation, it could also prove beneficial for certain disciplines. The success of the initiative will, however, not be quantitatively seen until the 2019 cohort of 67 students has been through the system.

74. This year has also seen the development of a five-year Education Framework, which had earlier incarnations as a Teaching and Learning Strategy and then an Education Strategy. Endorsed by the General Board as a working draft, the Framework is an internal working document designed to inform and guide thinking on educational strategy whilst other work is ongoing to give a clearer sense of strategic direction on related issues. The usefulness of a longer-term strategic planning document goes without saying, although in a bottom-up institution such as Cambridge it is hoped that the Framework devised is realised on the ground. Whilst highlighting such apparent future-proofing initiatives as digital education, what is noticeably lacking in the Framework is significant consideration of how the University proposes to support this increasing number of international students, particularly those on postgraduate taught programmes. The Board notes that given discussions to increase international student numbers at both undergraduate and postgraduate level, explicit consideration of inclusive teaching and research practices within such an international community ought to be paramount.

Office for Students

75. No commentary on Education would be valid without mention of the new University regulator, the Office for Students (OfS). As will be widely already known, their key interest in Cambridge is Access and Participation – with respect to which the University has been expected to set ‘ambitious’ targets. Whilst the University’s Access and Participation Plan (APP) has initially been approved for one year, it will remain under ‘enhanced monitoring’ and reporting.10

76. It seems clear that the regulator’s intention is to place the responsibility for addressing ‘access’ solely at the door of the University, even though the issue is not solely of the University’s making, but is also to do with issues upstream in the UK educational system. The collegiate University invests significant resources, of both time and money, in global outreach events in order to encourage applications from the best students, and yet the focus of the regulator, and by extension, the wider public and the media, tends to be on what the University apparently is not doing.

Research

77. Following its recommendation in the 23rd Report, the Board welcomes the University’s Brexit Analysis and FAQs webpage, which the Board expects will remain an important resource. The Board notes the series of active committees and working groups keeping a close eye on Brexit and related international developments that impinge upon maintaining our research strength.

78. In relation to strategic planning, some thought could usefully be given to the balance between responsive and pro-active support. While bottom-up initiatives will remain vital, some central overview of the global ranking of our partners around the world may be advantageous. The formation of a Strategic Partnerships Office (SPO) is worthy of note. The SPO’s remit and level of resourcing needs to fully align with the absolute need for Cambridge’s research excellence to be recognised globally. That need could feature more clearly in the University Risk Register.

79. The Board welcomes enhanced staffing of the Research Operations Office and investment in pre-award activity and forward planning alongside active grant support. The Board sees much evidence that the global strength of Cambridge research is undiminished, but is concerned about the University’s response to the increasing importance of ‘impact’ within the REF and the significant risk of it underperforming in the impact case study element of the forthcoming assessment. The Board welcomes the expansion of the Impact team within the Research Strategy Office to its current establishment of eight, while noting with concern the loss of all staff with experience of the last REF. In relation to monitoring our impact case study portfolio, the Board is concerned that several of the University’s competitors may already be well ahead of the University’s own schedule. Mock REF feedback meetings provide a key opportunity to address this discrepancy through clarity about where problems lie within the University’s impact case study portfolio, and what are the resourcing and strategic recruitment options available to address these problems.

80. Forthcoming feedback meetings will provide the principal opportunity for a frank appraisal of the University’s impact case study portfolio and the agreement of prompt actions The University will need to exploit this opportunity to the full, putting in place a resourcing strategy for immediate, well-monitored, mitigation.

Human Resources

81. The Council’s Annual Report offers a summary of the extended dispute between HE institutions and the University and College Union about the future benefit structure of the Universities Superannuation Scheme (USS). While registering concern at this state of affairs, the Report provides little reassurance about the Council’s long-term commitment to maintaining an adequate pension provision. The Board look forward to more concrete information in due course.

82. The Annual Reports of the Council and the General Board also note the launch of numerous initiatives around the gender pay gap, equality and diversity, and the Office of Postdoctoral Affairs. The Council also published its first Annual Remuneration Report (Reporter, 6532, 2018–19, p. 284) and a Report on revised arrangements for the remuneration of the Vice-Chancellor and senior post-holders (Reporter, 6532, 2018–19, p. 297), and the General Board reported on the implementation of the Academic Pathways Scheme (Reporter, 6547, 2018–19 p. 562). The Board expects to give particular attention to these major developments and their associated financial implications in its work for 2019–20.

Governance

83. The Board’s 23rd Report devoted considerable attention to the University’s governance processes and related matters, and offered a number of suggestions for consideration. The Board is encouraged by the publication on 25 July 2018 (Reporter, 6516, 2017–18, p. 842) of a Consultation on the format of Discussions, inviting responses by 31 October 2018. However, since then nothing further has been published in response either to our suggestions or the Consultation. While it recognises that the University’s constitutional wheels sometimes turn slowly, it is concerned that a working group set up in May 2017 by the Council with a remit to consider three items, viz Regent House membership, Council membership and Discussions, appears to be making such slow progress. This suggests that insufficient priority in staff resourcing is attached to it. Without some sense of momentum, it is difficult, and contrary to the ethos of self-government, to maintain the engagement of the Regent House.

84. The Board recommends that the Council publish a timetable for the Governance Review Working Group to conclude its work.

Unified Administrative Service

85. In the course of discussions with senior officers and others, the Board has learned of many new pan-UAS initiatives and more strategic thinking, which is welcome. It has, however, also become concerned about the amount of senior staff resource available to progress business, develop policy options, and provide information for members of the University in a timely manner. The concerns already referred to, relating to estates compliance, the governance review, and the lack of regular data collection to measure the performance of CUDAR, are three examples. There are obvious consequences if the existing staff, whose commitment is not in doubt, are overloaded, affecting both morale and levels of stress. The Board welcomes the ourcambridge initiative, which in time may deliver some process improvements and simplifications.

86. In the face of challenging times for Higher Education, however, a University of this scale and complexity needs a central administration that is equipped not only to support routine operations and governance processes, but can also provide sufficient experienced and forward-looking thinking to sustain its academic leadership and central bodies in evaluating, challenging and promoting strategies and positions to maintain our international standing.

87. The Board recommends that the Council, the supervisory body for the UAS, takes steps to satisfy itself that the UAS is appropriately structured and staffed to provide the necessary skills and expertise.

Systems and processes

88. Conversations with University Officers have led us to believe that many of the administrative systems and processes are viewed as suboptimal and in some cases the cause of deep structural problems for service delivery. A number of University Officers appear to believe that we often operate in a ‘penny-wise, pound-foolish’ fashion, with an administration that lacks resilience. Current systems that appear to create such challenges to effective operations include the University’s disparate financial management systems and the lack of an effective asset information management system for Estates. The Board believes that these matters are of strategic importance to the University, and will therefore focus on them next year.

89. Summary of Recommendations

The Board recommends:

1.That the University develop and publish internally a more detailed financial model to illustrate the trends and issues associated with cost recovery on externally-funded research, a long-term strategic issue for the University.

2.That the presentation of the Allocations Report and other budgeting information is improved so as to provide analysis at a more meaningful and, in budgetary terms, logical level of granularity. This might mean developing a standard reporting format at the level of a School or Non-School Institution.

3.That the University’s capacity to measure and assess quantifiable performance data on individual Institutions (particularly non-academic Institutions) is reviewed, and further it is considered whether sufficient formal objectives are being set and systematically reported on.

4.That the Council publishes a Notice setting out the new Health and Safety compliance methodology, including both the governance structure for monitoring it and the timetable for its full implementation.

5.That the Council publish a timetable for the Governance Review Working Group to conclude its work.

6.That the Council, the supervisory body for the UAS, takes steps to satisfy itself that the UAS is appropriately structured and staffed to provide the necessary skills and expertise.

Glossary

APP	Access and Participation Plan
CAm	Cambridge in America
CUDAR	Cambridge University Development and Alumni Relations
CUDO	Cambridge University Development Office
CUEF	Cambridge University Endowment Fund
DRC	Disability Resource Centre
HEFCE	Higher Education Funding Council for England
HR	Human Resources
NSI	Non-School Institution
OfS	Office for Students
PRC	Planning and Resources Committee
REF	Research Excellence Framework
SPO	Strategic Partnership Office
UAS	Unified Administrative Service
UCS	University Counselling Service
USS	Universities Superannuation Scheme

25 September 2019	D. J. Goode (Chair)	Martin Jones	Edna Murphy
	Graham Allen	Francis Knights	Karen Ottewell
	Gemma Burgess	Carmel McEniery	Ian Wright
	Timothy K. Dickens	Richard Mortier