Report of Discussion

Tuesday, 5 November 2019

A Discussion was held in the Senate-House. Deputy Vice-Chancellor Professor Simon Franklin was presiding, with the Registrary’s deputy, the Senior Proctor, the Junior Proctor and eight other persons present.

The following item was discussed:

Twenty-fourth Report of the Board of Scrutiny

(Reporter, 6563, 2019–20, p. 42).

Mr D. J. Goode, Faculty of Divinity, Wolfson College, and Chair of the Board of Scrutiny for 2018–19:

Deputy Vice-Chancellor, the Board of Scrutiny is central to the governance of the University. It is the University’s chief internal mechanism for ensuring transparency and accountability in all aspects of University operations. The primary role of the Board is to examine the way in which the University is run and to comment on this to the University’s governing body, the Regent House.

Each year the Board is required to scrutinise the following on behalf of the Regent House: (i) the accounts of the University; (ii) the Annual Report of the Council (including the Annual Report of the General Board to the Council); and (iii) any Report of the Council proposing allocations from the Chest.

The Board may investigate any matters that arise from these documents and in so doing is empowered to consult any official document, to make inquiries of any officer, to examine the policies of the University, and the arrangements made for the implementation of those policies, and to report thereon to the Regent House.

It is the last of these activities that has brought us here today, to discuss the Board of Scrutiny’s Twenty-fourth Report.

Even though Reports of the Board of Scrutiny for a given academic year are often put down for Discussion at the beginning of the following academic year – after a change of Chair – it is customary for the Chair of the academic year being reported upon to introduce the Discussion, which is why it is I, and not the present Chair, making these remarks.

You will be relieved to hear that I am not going to talk you through the Report paragraph by paragraph, but I am going to recommend that any members of the University who have not yet read it should do so.

I am also going to touch briefly on the six recommendations scattered through the Report, and summarised for convenience at the end of it. With the exception, possibly, of the fifth recommendation, they are all about information. Or, rather, the lack of it.

Recommendation 1: 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.

Paragraph 12 of the Report notes that research income was, last year, both the largest single, and the fastest-growing, source of income for the University. If that trend continues, improved cost recovery becomes even more important, otherwise the more we do, the more we lose, and that is not sustainable.

Recommendation 2: 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.

Paragraph 28 of the Report contains a table showing the allocations from the Chest for this year, and the following three, and is the way in which Chest allocations are currently reported to the University. There is a huge difference in granularity, as pointed out in paragraph 32, with some very broad categories of allocation, such as ‘Schools’, or ‘Estates’. These large categories need to be broken down to allow more accurate tracking of the changes in allocations over time.

Recommendation 3: 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.

During the year, the Board looked at Cambridge University Development and Alumni Relations (CUDAR). We asked for what we thought was going to be pretty basic financial information about CUDAR’s performance in its day-to-day activities, but it soon became clear that the Finance Division was struggling to reconcile its system and CUDAR’s system, and it took a surprisingly long time – months, not days – to get that information. The Board is concerned that this problem is not peculiar to CUDAR or the Finance Division.

Recommendation 4: 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.

The most recent Annual Report of the Council, which was one of the things scrutinised by the Board in the present Report, made passing reference to some compliance issues in the University’s estate. Upon scrutiny, these turned out to be major failings in compliance that are a significant concern to the University, and the Council needs to respond as a matter of urgency.

Recommendation 5: The Board recommends that the Council publish a timetable for the Governance Review Working Group to conclude its work.

Even by Cambridge standards, progress has been slow, and the Governance Review – set up by the University Council two and a half years ago, in May 2017 – appears to have ground to a halt. The Council should ensure that sufficient resource is put into the Review, and a timetable defined for its completion.

Recommendation 6: 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.

The Board is concerned that more and more is being expected of UAS staff, many of whom are already overloaded. The ourcambridge initiative will, we hope, help to deliver improvements over time, but the Council needs to be sure that the UAS is working effectively and efficiently now.

In conclusion, it is the Board’s hope that all six recommendations will be addressed by the University Council, as they are, we believe, essential for equipping the University to face the challenges of the next few years.

For those hardy readers who have made it to the eighty-eighth, and penultimate, paragraph of this Report, it will come as no surprise to see the areas on which the Board will be focusing its attention this academic year. In the meantime I commend this – the Twenty-fourth Report of the Board of Scrutiny – to the University.

Ms J. Marchant, Fitzwilliam Museum and President of Cambridge University and College Union (UCU), read by Ms C. Benton:

Deputy Vice-Chancellor, the work of the Board of Scrutiny to provide oversight is greatly appreciated and this year’s report is no exception. Speaking in my capacity as President of the Cambridge branch of UCU, I will pick out some of the areas within this Report that impact upon staff financial and psychological wellbeing.

Inevitably, the financial position of the University and the continued multi-million pound net surplus is of interest. As noted in previous Board of Scrutiny Reports, this has been the case for several years,1 whilst at the same time staff remuneration has suffered multiple rounds of below-inflation pay awards. The 6% increase in staff costs in 2017–18 (para. 15) needs to be viewed within this context, and it must be understood that this increase has not been applied across all staff and does not do anything to halt or reverse the real-term financial losses seen by University staff across a ten-year period.

It is of note that many areas of recent increased expenditure on staff costs are associated with promotional or reward schemes, such as the Academic Career Pathway. Whilst these improvements are to be welcomed, it should not be necessary to achieve a promotion to keep up with rises in living costs. We are repeatedly told that staff are central to the University’s mission, but tangible action on pay is required to make this more than just warm words of concern.2

This brings me to another significant issue raised by this Report, that of staff and student wellbeing. Like the Board of Scrutiny, I welcome such increases in resources to the Disability Resource Centre (DRC) and University Counselling Services as have been made available, but it is of significant concern that demand still outstrips supply in the area of mental health support. This impacts on the quality of the University experience for students and also pushes additional strain onto teaching and support staff –on top of the enormous workloads that University staff are already struggling under.3 It is therefore of no surprise to me that the Staff Counselling Service is also seeing significantly higher use and that work-related concerns are by far the greatest cause.

It is in the context of these areas of hardship and concern that Cambridge UCU (along with many Union branches across the country) last week won two ballots for industrial action – in their simplest terms one on pay and the other on pensions. Notably, the ballots also called for commitments and action to deal with untenable workloads, the race and gender pay gaps, and the ever-increasing casualisation of University staff. It is hoped that the University of Cambridge will use its not inconsiderable influence to shift the positions of UUK and UCEA,4 and that they will acknowledge that staff have suffered from continued cuts to the quality of their pensions and their overall pay for too long.

Professor G. R. Evans (Emeritus Professor of Medieval Theology and Intellectual History), read by the Junior Proctor:

Deputy Vice-Chancellor,

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,

says the Report at para. 25.

The Board comments that ‘delivering useful reform in these areas, whilst a very worthwhile objective, may prove to be more complex and challenging than expected’. Indeed it may. I remember a previous Registrary new to office ambitious to map the University’s committees in hopes of achieving a comprehensive overview of how it all works. A series of unsuccessful attempts could subsequently be seen on his wall.

The truth is that the University is an organism too complex to understand itself fully, in which, as in a human body, a great deal of the machinery operates without conscious control until it is realised that it is going wrong. In its now nearly a quarter of a century of existence, the Board of Scrutiny has become highly successful at spotting both signs and symptoms of sickness developing. But it is somewhat impeded by the incompleteness of the information available. This year’s Report makes an exceptionally significant case for doing something about that. In the present Report (at para. 13) there is mention of ‘improved levels of cost recovery on certain categories of externally-funded research’ but that ‘limited further quantified detail is provided’.

The story this Report tells is of a lack of sufficient information to make it possible to spot organisational inadequacies early or at all:

[C]oncerns 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 (para. 29).

And there has been ‘a significant number of departures’ from Estates’ ‘senior management team’ (para. 57).

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 (para. 58).

Is it necessarily enough to throw money at such problems or even to ‘develop’ a more satisfactory ‘structure’ without setting baseline requirements of transparency, and accountability to the Regent House?

A noticeable trend of recent years has been to foster ‘University-wide initiatives’ supported, the Board notes, by mounting Chest allocations. ‘[T]he ‘People Strategy’ initiative (such as Senior Academic Pathways and Professorial Pay Review)’ is ‘expected to grow from a recurring cost of £575k in 2019–20 to £4.15m in 2022–23’(para. 30). This expectation seems rather open-ended:

There are also significant additions to the categories of ‘Human Resources’ and ‘Operational’ which reflect some projected increases of certain pay and reward schemes (para. 31).

The Board points to another flaw noticeable in the Financial Statements, that ‘some of the categorisation seems slightly strange – ranging from tiny allocations’ to very broad ones. Its recommendation is the provision of ‘budgeting information’ at ‘a more meaningful and, in budgetary terms, logical level of granularity’. That could certainly provide useful warnings about the reliability of the calculations behind a grand initiative and its speculative future costs, and make it easier to work out later what happened, and why, when projected costs overran.

While the successes of Cambridge University Development and Alumni Relations (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 (para. 34).

That enlarged investment ‘started shortly before the arrival of a new Executive Director of Development and Alumni Relations in 2013’ and some ‘major planned expansion’ of fundraising (para. 35). The Report includes ‘some interesting long-term data’ (para. 36) on this. But ‘it took a surprisingly long time to obtain relatively basic historical financial information from the University’s financial systems’. CUDAR proved to be using its ‘own systems’ and ‘when the Finance Division was asked to produce figures, it was found that there were difficulties reconciling the Finance 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 (para. 48).

If things are so uncertain when it comes to balancing the University’s investment against the improved ‘takings’ from fundraising, how much more worrying should be the risks attached to the spending of the bond issue’s £600m? The Board ‘understands’ that the Council ‘is developing plans for the University to establish its own property company’ to ‘oversee’ the ‘income-generating projects approved for the development of the non-operational estate using the proceeds of the bond, and other sources of finance’ (para. 50). It points to immediate concerns about the ‘scope and remit of such an organisation and to its governance’ (para. 51). What is meant by adding to the promise that income will be generated with talk of ‘significant indirect benefits’? The Board wants that ‘clarified’ (para. 52). And how is the governance to work?

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 (para. 54).

The Regent House does not approve an overall Strategic Plan for the University which means that major initiatives may be agreed piecemeal and at a lower level than a decision of the Regent House. The plan ‘to increase postgraduate student numbers by 13.1% over 2017–22’ (para. 60) was framed at the General Board’s Away Day in Easter Term 2017, and the Board of Scrutiny is able to refer readers of its own current Report only to the Annual Report of the General Board for 2016–17. That simply states that:

A Memorandum of Understanding between the University and the Colleges on postgraduate student numbers has been approved, which sets out the aim for a 13.1% growth in postgraduate student numbers over the next four years.1

The Board expresses its concern about ‘the impact on the resourcing of Departments and central support services’ and in particular the potential increase such an expansion of student numbers would impose on the already alarmingly heavy load now being carried by Student Counselling and other Student Support Services (para. 60). Again it has looked at the ‘management’ of this area giving figures for the mounting level of student demand (and the related increase in staff needing support) (paras. 61–67).

Another ‘strategy’ led by the General Board, formerly the Teaching and Learning Strategy, then an Education Strategy, is now a five-year Education Framework (para. 74). This takes the form of ‘an internal working document’. ‘Noticeably lacking in the Framework’ says the Board of Scrutiny:

is significant consideration of how the University proposes to support this increasing number of international students, particularly those on postgraduate taught programmes.

It is of the first importance that the Board can invite University officers to its meetings (and that they are not members of the Board, merely its guests) (para. 4). Such ‘conversations with University Officers’, says the Board of Scrutiny:

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 (para. 88).

It points a finger especially at ‘the University’s disparate financial management systems and the lack of an effective asset information management system for Estates’.

It may be that the University of Cambridge is ultimately too complex to understand itself fully. But surely it could try harder to rectify the elementary failures of management which are undermining its governance and putting it at financial and reputational risk? It should certainly be better at doing its sums.

Mr D. J. Goode, Faculty of Divinity and Wolfson College:

Deputy Vice-Chancellor, having spoken earlier as the former Chair of the Board of Scrutiny, I now wish to make some remarks in a personal capacity.

In paragraph 81 of the Twenty-fourth Report, the Board of Scrutiny says this about pensions:

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.

In his address to the University on 1 October 2019, the Vice-Chancellor said:

It troubles me to note that we begin this academic year with the prospect of industrial action over pay and over pensions at a critical juncture for the country and for the University. On pay, we will keep exploring options to enhance our staff’s total compensation package through the targeted improvement of benefits, including childcare support and housing assistance. On pensions, we will strive to find creative solutions to reach an agreement.

On 31 October 2019, participating Cambridge UCU members delivered their verdict in two ballots: one on pay and equality matters, and one on pensions. In the ballot on pay and equality matters, almost nine out of ten voted to take industrial action consisting of action short of a strike up to and including a marking and assessment boycott, and three quarters to take strike action.

In the ballot on pensions, more than nine out of ten voted to take industrial action consisting of action short of a strike up to and including a marking and assessment boycott, and more than four out of five to take strike action.

The message is clear, and the Vice-Chancellor and the Council are left in no doubt that academic, academic-related, and research staff in Cambridge do not want ‘targeted improvements’ that will benefit some staff and not others, such that within the same grade – for work of equal value, or even for two people on exactly the same spine point, in exactly the same grade, doing exactly the same job – one will find themself rewarded while the other gets nothing, something which in any other context would rightly be condemned as divisive and discriminatory.

Neither do we want ‘creative solutions’ for pensions. No, these are just smokescreens: empty phrases and fake benefits. What we want is simple: an end to pay cuts, an end to pension cuts, fair pay now while we work, and a fair pension when we retire.