Report of Discussion

Tuesday, 17 June 2025

A Discussion was scheduled by videoconference with Deputy Vice-Chancellor Ms Sonita Alleyne, JE, presiding, and the Registrary’s deputy, the Senior Proctor and the Junior Proctor as the attending officers.

Remarks were received as follows:
 

No remarks on the Second Joint Report of the Council and the General Board, dated 4 June 2025, on the review of examination regulations following the marking and assessment boycott

(Reporter, 6787, 2024–25, p. 606).

No remarks were made on this Report.
 

Remarks on the Report of the Council, dated 4 June 2025, recommending the budget and allocations from the Chest for 2025–26

(Reporter, 6787, 2024–25, p. 610).

Mr G. P. Allen (Wolfson College):

Deputy Vice-Chancellor, I should declare an interest as Chair of the Board of Scrutiny in 2021. In its 26th Report1 the Board, commenting on five annual Allocations Reports proposing a deficit budget, recommended as follows:

The Board recommends that Council insists on recommending a balanced Allocations budget from now on, i.e., one that returns the University to a sustainable financial framework. Only in exceptional circumstances should the Council recommend an Allocations budget that is materially out of balance and, in such circumstances, the Council should explain to the Regent House what those exceptional circumstances are and how it will ensure that the Chest will be brought back into balance within a reasonable timeframe.

The Council’s Notice2 avoided making a direct response to the recommendation and instead gave a jargon-laden explanation about the deficiencies of the Chest budgeting system, and how Enhanced Financial Transparency (EFT) would improve matters, together with scope for initiatives such as Strategic Procurement and Purchasing, Re‑imagining Professional Services, and Re‑shaping the Estate, to produce cost efficiencies. There was to be much ‘collective optimisation’, ‘collective decision-making’, ‘impact-maximising’, and ‘surplus enhancing’ as well as ‘significant communication and stakeholder engagement effort’.

Over three years later, the current Report tells us that the Finance Committee has agreed a ‘roadmap’ for a Finance Transformation Programme (FTP) that will require a new finance system before the goal of EFT might finally be achieved. Meanwhile the Report forecasts a deficit for the Academic University of ~£40m for 2025–26 as well as deficits for the Academic University of £20m–£40m ‘for the foreseeable future’.

The Council offers little to sweeten this grim reading other than references to the possibilities of various transformation programmes to achieve unquantified efficiencies over unspecified timescales. There is no mention of the scope for Re‑imagining Professional Services to reduce costs, savings by slimming down the estate may only accrue over twenty years and, as has previously been commented, EFT when rolled out will not of itself produce savings or new income. A 4% reduction in Chest allocations will be imposed next year following a 1% reduction this year to mitigate the growth of deficits. Apart from these arbitrary cuts which cannot continue indefinitely without adversely affecting academic activities, the Council appears to have neither a plan nor timetable for achieving its laudable goal of returning the University to achieving an ‘annual cashflow surplus to provide headroom for long-term renewal and academic investment’. Based on a surplus of 5% of Chest (£35m) and eliminating what appears to be a structural deficit would imply recurrent savings of £50m–£70m. Surely it is time for the Council to revisit the Board’s 26th Report and present the Regent House with such a plan and timetable.

Professor G. R. Evans (Emeritus Professor of Medieval Theology and Intellectual History):

Deputy Vice-Chancellor, do this year’s proposals for allocations from the Chest hint at its abolition? This Report explains the intention to ‘align bottom-up and top-down planning’ while most institutions continue to ‘rely on planning that is focused on the Chest’ until the ‘new finance system is brought in’. In preparation, this Grace will move across various of the Chest’s powers to disburse funding to the General Board and the Finance Committee of the Council (acting in consultation with the General Board).

The Office for Students does not peer deeply into a university’s financial affairs. It is concerned only with sustainability1 and Cambridge’s finances are relatively comfortable in that respect. But the OfS does require the University to make an Annual Financial Return, helpfully providing a Workbook.2 On 6 March this year it wrote to ask for an interim return by 10 April which ‘accurately represented’ the University’s financial position though that did not ‘need to be verified before submission’ or require ‘approval’ from the Regent House as its governing body.3 That Regent House approval is now being sought by Grace for the year to come.

The Council recommends in this Report that allocations made from ‘any supplementary grants from the Office for Students and UK Research & Innovation (through Research England), which may be received for special purposes during 2025–26, be allocated by the Council’, but in compliance with ‘any specification made by the OfS or UKRI’. The income from grants considerably supplements the University’s income from tuition fees, so maintaining the goodwill of the OfS and UKRI is important.

Funding may be put into the Chest in various ways. ‘Save as is otherwise provided in Statutes or Ordinances, all income accruing to the University shall be credited to the account of the Chest.’ The non-operational estate ‘remits income to the Chest’. Under Statute J 4 ‘in any year in which the audited accounts show a sufficient balance the Press and Assessment Syndicate shall pay over to the University Chest such a proportion of the balance as shall be agreed upon between the Syndicate and the Council’. Income comes to the Chest when applicants for degrees pay their fees. For the degree of Bachelor of Divinity there is ‘a fee of £360 for the Chest’. For a Ph.D. the fee is £462. For higher doctorates there is a fee of £582 for the Chest, but if the applicant is not found to deserve the award the Chest hands back £510. The Honorary Higher Doctorates to be granted to the honorands on 25 June do not involve their paying any fee to the Chest.

Payments from the Chest include ‘sums set aside by the Chest from endowments for funding various named Scholarships, Prizes and Professorships and Chancellors’ medals’. For this purpose sums ‘are paid into the Chest for the purpose by the relevant Trusts’. A new fund may be created to maintain a Professorship, such as the Pitt Professorship Fund and the Prince Philip Professorship of Ecology and Evolutionary Biology. Trinity College supports the Whewell Trust Fund on which ‘a first charge’ is ‘the sum of £300 to be paid in each year to the Chest to help it pay the stipend of the Whewell Professor of International Law’. In the case of the examiners for the English Poem, remuneration is to receive an ‘amount’ to be ‘determined by the Faculty Board of English within a range approved from time to time by the Council’.

Funding taken out of the Chest is principally allocated to the General Board so that it may pass it on by approving grants ‘for recurrent and for non-recurrent expenditure from the University Education Fund to the funds of Faculties, Departments, and other institutions’ under its supervision. In consultation with the Finance Committee of the Council, the General Board may adjust the allocations when there are ‘differences between actual and estimated expenditure’ on ‘pensionable stipends, wages, pensions, national insurance contributions, family allowances, and other personal emoluments’. This may be for reasons including ‘General Board purposes’, though those are not further detailed.

The present Report makes its own recommendations for allocations from the Chest which need to be approved by Grace. £464.7m is to go to the General Board for the University Education Fund and £215.2m to the Council for all purposes other than the University Education Fund. The Council does not seek to Grace, merely to ‘propose’, that existing policy for the spending of the money should continue, requiring Schools and institutions to achieve 5% reductions in overall operating expenditure (Chest and non-Chest). This is to be ‘achieved in part by a further reduction of Chest allocations to Schools and institutions in 2025–26’.

Where does this transfer of responsibilities leave the role of the Chest in the University’s financial arrangements? The Statutes and Ordinances see it as an actual box. Statute A II 13(b) requires that the University’s Great Common Seal shall be ‘kept’ in it. It must be ‘a chest fastened with three locks, the keys of which shall be severally kept by the Vice-Chancellor and the Proctors’. Taken out of the Chest for the purpose the Great Commons Seal may be ‘affixed to’ a document by pressing it into a patch of wax. This physical Chest will no doubt continue to be needed in order that the Great Common Seal may remain safe but accessible by the holders of those three keys. The Chest was kept in Great St Mary’s Church until it was moved across to the Old Schools where it came to reside in the Registrary’s Office. It was transferred to the University Library as a loan in 2016. Has it been returned to the Registrary’s keeping?4

However the University has two Seals. The second, the Common Seal, is protected by only two keys and need not be kept in the Chest. As in the case of the Great Common Seal ‘the Vice-Chancellor or a duly appointed deputy and the Proctors or their deputies’ must be present when it is applied. A Register is kept recording all sealings by both Seals.

A Special Ordinance under Statute F requires the Council both to supervise the ‘reserves and investments and the income and expenditure of the Chest’ under its general financial responsibilities and to make the annual Report we are now discussing, but for the purposes of this supervision the members of the Council do not have to surround the Chest in person and watch if the Great Commons Seal is taken out and used. Nevertheless the Chest remains a considerable presence in the Statutes and Ordinances.

Oxford’s fifteenth-century Chest had five keys held by the Vice-Chancellor and five Masters of Arts chosen by election. It was replaced in the seventeenth century by the Painted Chest decorated with coats of arms and in due course the need for a supervisory body prompted the creation of the Curators of the University Chest. The Curzon reforms of 1909 proposed a Finance Board, leaving the Curators only providing ‘an accounts office, an estates committee and office of works’. Miscellaneous accounting practice meant that the Franks Commission was faced with a formidable task in making sense of the arrangements. Their solution continued to be followed until with the North Reforms the work of the Curators passed to the Finance Division. The Finance Division is now Oxford’s Chest.

The current arrangements about Cambridge’s Chest have also taken shape piecemeal in the evolution of the University’s governance, with its Chest too becoming the responsibility of the Finance Division, but remaining in need of Graces to make changes. Given its hint about its future, perhaps the Council will explain more fully what it has in mind in its Notice in reply. The Board of Scrutiny has already given a lead in its Twenty-Ninth Report.5

Dr D. R. H. Jones (Christ’s College):

Deputy Vice-Chancellor, when I saw this Report, my eye was immediately drawn to the tables and graphs in the Annexes. I am grateful to those who thought it would be helpful to add this visual material.

The point that I wish to raise concerns the number of full-time equivalent (FTE) staff. Data are given for FTE in a number of formats, for both Cambridge and the other Russell Group institutions.

Page references that follow are page numbers in the Reporter. On p. 624, the right-hand table gives data for individual institutions. For the 2023–24 academic year, the mix of FTE staff at Bristol is 43% academic plus 57% non‑academic. Cambridge is 46:54. Further down the page, Oxford is 48:52. The data set is bracketed by Warwick/LSE (40:60) and UCL (54:46).

The left-hand table on p. 624 makes a different comparison. FTE data for academic and non-academic staff at Cambridge and Oxford are plotted against time between the academic years 2018–19 and 2023–24. Also plotted are the mean data for the Russell Group. In all three cases, there is an increase in non-academic staff over the period. The percentage increases for Cambridge, Oxford, and the Russell Group are 20%, 19% and 20%.

The percentage increase in academic staff in the Russell Group is 12%. This lags behind the increase in non-academic staff (20%). At Oxford, the situation is worse: 5% compared to 19%. At Cambridge, academic staff numbers have actually decreased by 4%.

Turning to the non-academic staff numbers at Cambridge, on p. 623 these are plotted against time from 2015–16 to 2023–24. Reading down from the top, lines are given for the Unified Administrative Service (UAS), Clinical Medicine, Biological Sciences, Technology, Physical Sciences, and so on. From 2018–19 to 2023–24, the increases are respectively 37%, 19%, 19%, 25%, 18%. The rate of growth of UAS posts far exceeds that of posts in the Schools.

Within the UAS, data are available from other sources for the number of FTEs allocated to different functions. For 2023–24, the major headings are: Academic 464, Development/Alumni 137, Estate Management 357, Finance 252, Health and Safety 224, Human Resources 217, Registry 63. The grand total is around 1,800.

It is reasonable to assume that non-academic posts in the Schools contribute directly to the delivery of the core mission of the University, specifically teaching and research. Examples are laboratory, workshop and computer staff, departmental administrators, staff at libraries and museums, and many more. One might think that as one gets further away from the Schools, into the reach of the UAS, the connection to the ‘sharp end of the business’ would become more tenuous; but the UAS is responsible for major functions, without which the University could not function in its current form. This does not mean that these divisions should be sheltered from scrutiny. In an environment removed from the ‘sharp end of the business’, managerialism and empire-building will tend to lead to an expansion in staff count well beyond that necessary to perform the essential functions. This may differ from one division to another. For example, Development/Alumni (137 staff) has a critical income-generating and reputational role, whereas Human Resources (217 staff) – a straightforward overhead – ought to be a standard process-oriented operation. Maybe they have been kept busy by the recent UAS hiring spree – an example of positive feedback.

To summarise, in the last five years, the Council has presided over a massive expansion in UAS posts (487, with 362 in the last two years alone) alongside a decrease in academic posts of about 250. I do not understand why Council has allowed this. They may be too close to the centre, or they may have given the centre too much autonomy. Whatever the reason, this has to stop. The Council must exert direct control over the UAS: freeze staff numbers; ruthlessly weed out non-essential activities; rationalise and optimise performance; and in the medium term, work to reduce staff numbers. The savings from this exercise should be used to restore the staff ratio to 50:50. If Exeter, Glasgow, Imperial, King’s College, Queen Mary and UCL can do it, then so must we.

Dr W. J. Astle (MRC Biostatistics Unit):

Deputy Vice-Chancellor, I am a member of the University Council and the Membership Secretary of the Cambridge Branch of the University and College Union, but these remarks are made on my own behalf.

I would like to thank the Chief Financial Officer for arranging at short notice for the inclusion of the figures summarising the recent trends in the size and composition of the University staff in Annex 4 of this Report. Similar figures appeared in last year’s Allocations Report,1 in the Discussion of which2 it was pointed out by Dr Cowley that such figures provide less information than the stratified tables of staff numbers that used to appear as appendices to the Report (e.g., Reporter, 6552, 2018–19, pp. 710–711). More detail is available in the ‘databook’ on the University’s Tableau server (https://tableau.blue.cam.ac.uk), but it seems unlikely that this digital format will be retained as an historical record. Perhaps it is worth considering an annual ‘University Statistics Number’ of the Reporter in which the various tables in the databook are reproduced. It should be simple enough to automate the reformatting of data from Tableau for the Reporter.

Dr S. J. Cowley (Faculty of Mathematics):

Deputy Vice-Chancellor, I am a member of the Board of Scrutiny, but I speak in a personal capacity.

Is it acceptable, as noted in this Report, that ‘the deficit for the Academic University will remain within a range of £20m to £40m for the foreseeable future’? When I was one of the University’s Charity Trustees my answer to that would undoubtedly have been no.

When the Financial Statements for the year ended 31 July 2023 were Discussed on 19 March 2024,1 only Professor Evans and I contributed; in the equivalent Discussion this year, only Professor Evans spoke.2 One might assume from this collective indifference that the Group’s finances are in a healthy state. However, in both years the figure viewed as the best measure of the underlying recurrent operating performance by the University, i.e. the adjusted operating surplus/(deficit) for the year as given in Appendix 1, was in deficit: £15.7m in 2023–24 and £9.5m in 2022–23. This compares with surpluses of £24.4m, £19.8m and £50.8m in 2021–22, 2020–21 and 2018–19 respectively (there was a deficit of £42.3m in 2019–20, but that might have had something to do with the pandemic).

While it is somewhat worrying that the Group is running a smallish deficit, it is even more worrying that the adjusted operating deficit of the Academic University in 2023–24 was £105m, up from £73m in 2022–23 and £47m in 2021–22 (see Table 1 of the Financial Statements for the years ended 31 July 2024 and 31 July 2023).3 Last year The Chief Financial Officer (CFO) commented that

Our ambition remains to achieve a modest, sustainable surplus for the Academic University cash flow in the long run, in order to maximise the funds available for reinvestment into the University’s mission and provide greater resilience across funding sources.

and

Within the Academic University, we are targeting a sustainable annual surplus over time, through raising revenues and utilising collective resources more efficiently, while enhancing the academic strengths of the University and investing in our people.

I can find no such ambition in the Concluding remarks this year, just a comment that

Nonetheless, we cannot be complacent. Cambridge has suffered from cost increases exceeding revenue growth within the Academic University increasing its operating deficit and this has necessitated a diversion of resources to meet this deficit that would otherwise have been available for investment.

I agree that the University cannot be complacent, e.g. in accepting that the deficit for the Academic University will remain within a range of £20m to £40m for the foreseeable future; indeed, the University should retain the ambition to achieve a modest, sustainable surplus.

Running a long-term deficit has consequences. At the Council Meeting at the beginning of June the question was posed as to whether the University might be able to use the current once-in-a‑generation turmoil to recruit from the USA. The answer was negative since the University is constrained by available resources, i.e. because of the continuing in‑built structural deficit (that has been recognised since at least the Allocations Report of 2020).

The University has faced financial headwinds before, e.g. at the turn of the millennium there was a succession of years when the University ran a Chest deficit. However, in the worst year, 2003–04, the RPI adjusted outturn deficit was about half of that of 2022–23 and 2023–24. In March 2003, the report of the ad hoc Finance Working Party (FWP), established because of these increasingly large Chest deficits, was far from complacent noting that the ‘financial problem is chronic, and cannot be allowed to continue’.4 The Chest deficit was eliminated within four years (there was next to no non-Chest deficit in those years).

The University has now budgeted for a Chest deficit every year since 2016–17. On the plus side, for 2019–20, 2020–21 and 2021–22 there was an outturn surplus, but with hindsight that was probably one of the few benefits of the pandemic. There has been an underlying structural deficit for the best part of a decade, and surely the time has now come to tackle it head-on (as was done by the FWP in 2003).

The ‘5% reduction in overall operating expenditure (Chest and non‑Chest)’ referred to in paragraph 10 is insufficient. Further, it is frustrating that even this statement is imprecise. The reduction in non-Chest expenditure is not across the board (since it would be ludicrous not to spend grant income), but is effectively, as noted in paragraph 12, a 5% tax to be levied on external trading and Gift Aid income (applied to departments with external trading income exceeding £500k p.a.), and a similar tax on the departmental share of research overheads (to be applied to the departmental share after the usual income allocation policy has been applied to each research grant). The Report does not make clear the destination of this tax (I presume reserves), and there are rumours that several institutions have secured an exemption.

In the Financial Statements for the year ended 31 July 2024, the CFO wrote:

We are therefore embarking on a multi-year programme to modernise our systems and processes to achieve efficiencies and provide more accurate and timely information allowing better decision making within our highly devolved organisation.

   We are also close to completing a long-term integrated investment plan that will ensure that as we generate funds for investment, they are used to maximum effect in pursuit of our academic mission.

However, it is not clear how deficit reduction will follow just because the Enhanced Financial Transparency (EFT) programme provides ‘reliable and transparent financial information that empowers institutions to make better informed decisions and to plan and budget in generally accepted, straightforward, and efficient ways’; tough decisions will still need to be made. The hoped-for savings from the wider Finance Transformation Programme (FTP) and the more specific Transforming Research Support implementation are nebulous, and the 10% savings from the Reshaping our Estate programme are up to 20 years away.

The Allocations Report for 2021–225 noted that the ‘potential cost savings of Reimagining Professional Services had initially been identified at c. £11m (5% savings on costs of administration ~£220m)’. The current Report is silent on such savings. Have any savings been made from this or similar initiatives such as the predecessor ourcambridge, for which the budget in 2019–20, 2020–21 and 2021–22 was £1m (according to RMC E.434)? I find it difficult to believe that there have been savings given that the current Report notes that while the number of academics has marginally decreased from 2019–20 to 2023–24 (5,733 compared with 5,650), the number of staff ‘not on an academic contract’ has increased by 18.5% from 5,735 to 6,800 over the same period.

The current Report is also silent on the results of the Structural Improvement Fund. I believe that there are some positive outcomes of that initiative but, as I noted in my November 2020 remarks on the Allocations Report for 2020–21,6

My judgment, which I accept may be incorrect, is that the structural deficit is not going to be eliminated by increased revenue (in support I note the slow take-off of the Structural Improvement Fund); I wish that it was.

My current judgement is that the structural deficit is neither going to be eliminated by the change programmes, nor by a 5% across the board cut, nor by increased revenue. I wish that it was. I fear that the bottom line, again as I noted in November 2020, is that ‘staff numbers which have gone up, are going to have to come down’. Other universities have realised this, and have implemented differential, rather than uniform, reductions (in the case of Durham by voluntary severance and unfilled vacancies).7

There is no doubt a multitude of reasons why the University has failed to get a handle on the deficit. One of the biggest problems may well be the castration of the Resource Management Committee (RMC). For the 8 years when I was a member, that was where the key budget decisions were made (within the envelope set by the Finance Committee), and where the PVC for Planning and Resources, the Heads of School and the Head of the UAS the took responsibility for balancing the books. I gather that next week’s RMC, whose membership should now probably be bolstered by the Head of the UIS, has been cancelled for lack of business. Really?

There also seems to be a belief8 that once the University has EFT/FTP it will be left to the Schools, the UAS and UIS to balance their budgets. However, is such full devolution satisfactory? When an institution did less well than expected in the REF, or in a Teaching Review, the General Board did not wash its hands of the problem, but often instigated a review. The financial deficit is arguably as serious, so why this hands-off attitude? The University needs spendable reserves, so that when opportunity knocks, e.g. courtesy of Trumpian economics, the University can act. Is there not an urgent need for an overarching review of administration given its growth?

•Will a siloed approach correctly identify what is most efficiently and effectively done by the Central Bodies, Schools or Institutions? In the early 2010s there was administrative devolution from the Central Bodies to the Schools and Institutions, but without adequate resource (which probably explains some of the growth of administrative support in the Schools, etc.). Might some of this be reversed?

•Is it true that there are no ‘like-to-haves’ that the University can no longer afford?

•Are there administrative processes that have been introduced that can be eliminated at marginal risk to the functioning of the University? As a very minor example, as Convenor of the Directors of Studies of Mathematics I have now been asked to provide Minutes of the Director of Studies Committee meetings for the Senior Tutor’s Education Committee to ‘note’. Does ‘note’ include being read and acted upon? I have my doubts. In its response to the Teaching Review, the Faculty of Mathematics stated that the ‘Directors of Studies were strongly against removing Saturday lectures on pedagogical grounds’. Yet when, at the April Meeting of the Council, a Council member asked specifically whether the Faculty of Mathematics was happy with the proposal to abolish Saturday lectures, he was told that it was. Why collate responses, Minutes, etc. unless they are going to have some effect? Are not such actions needless bureaucracy?

The 5% reduction in Chest Allocations is a first step, but it cannot be the last. The University may have decided in favour of Waitrose jam instead of Bonne Maman preserve, but at some point, gruel may be the order of the day.