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Board of Scrutiny

Helen Thompson
Stephen John Cowley
Social & Political Sciences


Board of Scrutiny


Noon, Thursday 20
May 2004


Robinson College




Present: Stephen Cowley (Acting Secretary), Christopher Forsyth
(Chairman), Nicholas Holmes, Elisabeth Leedham-Green, Timothy Milner, Saskia
Murk-Jansen, David Phillipson, Jennifer Rigby, Roger Salmon, John Spencer.


Apologies. Helen Thompson (on leave).


Minutes of the meeting of 6 May
These were approved.


Matters Arising.


Administrative support: Appointment
of the Board of Scrutiny Support Officer.
It was reported that the three candidates had been interviewed.
The appointment has been offered and accepted. A letter of appointment is in
draft. Jennifer Rigby and the Chairman were thanked for their efforts.


Assistant Staff Pension Scheme
The last
two actuarial valuations of the ASPS (2000 and 2003) were reported. A surplus
of £68m in 2000 had turned into a shortfall of £17.6m in 2003 (although the
stock market has recovered somewhat since that date). The fund stood at £204m
in 2003. The University was to make an extra contribution of £9.5m in 2003/4,
as was UCLES. The Board discussed whether the University should have
anticipated the shortfall. In its 9th Report the Board agreed to
note the failure to spot the problems with the ASPS at the time of the Finance
Working Party Report, and to comment on personnel’s handling of the associated
staff relations issues.


Acting Secretary. The Registrary has been informed
that Dr Cowley is Acting Secretary.


Legal Advice. Copies of the legal advice received
by the University concerning the distribution of trust capital as income had
been received. It was noted that the Amalgamated Fund can declare a dividend
that is not related to income received. Up to 2000 income had been under
distributed, but that position had been reversed in 2001. The income surplus
accumulated prior to 2000/011 will have been fully distributed by the end of
2003/04.  Once this has happened,
University trust funds with permanent capital will need a change of University
Statute in order to continue to spend a dividend in excess of income (e.g. in
order to adopt a total return policy). There is the separate issue of whether
the University would be wise, even if it is legal, to continue dividends at the
current level.


Draft risk Register. The Secretary apologised for not
having acted on the request for the draft risk register.


RAM and the Financial Model. The Secretary apologised for not
having acted on the request for a statement of the relationship between the RAM
and the financial model. In a discussion of the RAM it was reported Schools
will be expected to submit plans detailing expenditure reductions during
Michaelmas 2004. These will be scrutinised by the Planning and Resources
Committee to confirm that they are consistent with the best interests of the
University as a whole (e.g. as regards student numbers and HEFCE QR income). It
was reported that the Allocations Report should be published on Wednesday 26


The University’s finances were discussed. The University
clearly needs more income or to spend less. The Finance Working Party
identified possible extra sources of income and reductions in expenditure.
However, there had been somewhat of a hiatus in implementing the more difficult
proposals while the RAM was developed. In addition the problems with the ASPS
had made matters worse. At some point the University was going to have to grasp
the nettle in order to reduce its deficit. It was noted that, inter alia,
the equipment budget had been reduced as an incentive for institutions and
departments to use reserves. As an example it was noted that the UCS reserves
would last one for year; the question then arose as to whether an increase in
its equipment budget had been allowed for in forward planning.


Audit Committee: HEFCE Documents. The
requested documents were tabled. It was decided to discuss them at the next
meeting. The Chairman noted that he had yet to receive any documents on the
consolidation of accounts.


3.8.   Investment policy. Discussion of this item was deferred to item


HERA. The Director of Personnel had
informed the Chairman that the Council and the General Board were considering a
draft Report on the introduction of a single salary spine based on HERA. No
papers had been forwarded. The Board noted that the introduction of HERA and a
single salary spine had been an ongoing project for 2-3 years. Such a long
development time might be appropriate for such an important and far-reaching
measure; however, there must also be adequate time for consultation with the
Regent House. Depending on developments the Board agreed that it might be
appropriate to make this point in the 9th Report.


Visit to Management Information
Services Division (MISD).
A delegation from the Board had had a productive meeting with the
Director of the MISD, John Milner, on 14 May 2004. Topics discussed included:
CUFS, CamSIS, the Shattock proposals for a merger with the UCS, and the
purchase of computer equipment. The Board was told that, although it had been
necessary to modify initial plans, CamSIS was expected to come in both on
budget and on time; the Director was happy with the procedures followed in the
procurement process. Plans for the introduction of a new human resources system
had been extended over an extra year because of budget limitations, however
despite an antiquated system matters were in hand.  There was good liaison with the UCS, but there was no perceived
need to merge the MISD and the UCS. The Director of MISD was confident that
good value for money was being obtained in the purchase of computer equipment.


Preparation of the Annual Report.


Executive summary. It was
agreed to include an executive summary at the start of the Report.


5.2.   Introduction. It was agreed to shorten the introduction (and not
to use the word “watchdog”), to include a reference to what the Wass Report
envisaged the Board’s role would be, and to move the section on the remit of
the Board to the end of the Report. It was also agreed to include footnotes in
sections referring to the relevant paragraphs in the Annual Reports of the Council
and General Board and/or the Abstract of Accounts.  It was agreed to refer the interested reader to the WWW for
details of when and whom we met.


5.3.   Financial matters. It was agreed that the start of this section
would include an overview of the accounts. It was agreed to note that, in the
light of probable cuts, the University should concentrate on the excellent, and
should cut the non-excellent. The Board was aware that some in the central
bodies are aware that the current annual deficit cannot continue, and that
something has to be done. However, because of the hiatus resulting from the
introduction of the RAM, while the issues may have been identified (e.g. in the
FWP Report), many of the issues do not seem to have been directly addressed.


5.4.   Statutory Posts. There was a discussion of which
administrative posts should appear in the Statutes. It was agreed that, if not
in Statutes, senior posts should appear in Ordinances. The need for a role of
Treasurer was discussed. The question arose as to whether the Director of
Finance should report to the Registrary, or directly to the VC.


5.5.   Investments. There was a discussion of the draft section on
investments. It was agreed that detailed quotes should be placed in Annexes. A
need to clarify the definition of trust and restricted funds was identified. It
was agreed to determine what view the Finance Committee had come to as regards
a policy of maximising total return (the Chairman will ask for the relevant
papers). A question arose as to the approximately £100 m of University funds
that is not in the Amalgamated Fund; this was thought to be principally cash


Maintenance. The draft
was welcomed. A question arose as to why the estates plan was not on the WWW.
The Board has discovered that behind the scenes there is strategic thinking and
planning going on; however, this is not necessarily evident to the casual
observer (or member of the RH). It was agreed that the Board should highlight
issues rather than suggest courses of action. However, it was suggested that
the recommendations at the end of this section need to be more positive


Strategy. The point
was again made that while there may well be strategic thinking going on in the
University, the average member of the RH was unlikely to be aware of this and,
unlike at some Universities, the views of the University at large are not being
solicited. It was thought that it was unrealistic to expect Chairmen of Schools
to be responsible for soliciting the views of RH members in their School or for
informing them of strategic thinking.


RAM. It was again observed (a) that the
RAM does not distribute income as earned, and (b) that the top slicing of the
College fee in the RAM could lead to distorted incentives. There was a
discussion of whether the College fee should be subject to a reduction similar
to that sought from the Schools and other Institutions in the University. It
was noted that the top slicing of the College fee highlights the role of
Colleges. The view was expressed that the cost drivers in the RAM must also be
the same cost drivers felt by Colleges, otherwise this might be a recipe for
disaster. There was a discussion of student numbers in this context. It was
also noted that many Colleges are in deficit, and that undergraduates can often
cost Colleges twice what the undergraduates pay in fees, rents, etc. It was
suggested that after the new-form statutory accounts of the Colleges have been
published for the first time in Michaelmas 2004, it might be appropriate for
the Board to publish an interim Report.  


Governance. It was
agreed to refer to the re-organisation of the Finance Committee and the PRC. It
was agreed to prune the Board’s draft comments on the working of Council. There
was a discussion of the need for a General Counsel, or similar. The recent
advertisement for a Director of Public Affairs was noted. It was agreed to note
the poor information flow between Council and the Regent House, and to welcome
greater consultation and open debate (see also 5.7 above). It was noted that
renegotiation of the College fee, including the capping of student numbers, was
a sensible decision; however it was not clear that the negotiations were
handled optimally. It is clear that the University and Colleges should be
thinking about their relationship. There was a discussion as to whether the
existing formal routes of communication via the Colleges’ Committee and the 3+3
Committee were adequate.


Any other business. There was
no other business.


Date of next meeting. It was
agree to hold an extra meeting at noon on
27 May 2004 in Robinson College.