STRATEGIC PLANS AND FINANCIAL FORECASTS TO 1996-7 SUBMITTED TO THE HIGHER EDUCATION FUNDING COUNCIL FOR ENGLAND Universities were requested to submit to the HEFCE by 2 July 1993 (a) their mission statements and strategics plans for the period 1992--3 to 1996--7, (b) numerical data, including student and staff numbers and forecasts to 1996--7, financial forecasts to 1996--7, and estates data as at 30 June 1993; and (c) an annual operating statement for 1993--4. In drafting the plans account was taken of the corporate plan and planning statement submitted to the then UFC in 1992 (see Gazette, Vol. 123, pp. 45- -51). The `annual operating statement', which is a new requirement, is expected to identify those developments in the strategic plan which are to be put into effect in the coming year, together with a review of performance against the `measurable targets' of the previous year. Council and the General Board have agreed that the information submitted to the HEFCE should be published in the Gazette. These statements do not include the `numerical data', which was submitted separately. The substance of this data, however, is summarised in para. 4.2 of the strategic plan. Strategic Plans and Financial Forecasts 1993 The following paragraphs set out the response of the University of Oxford to the HEFCE's invitation in circular letter 17/93 to submit information on its strategic plans and financial forecasts up to 1996--7. This information comprises (a) the University's Mission Statement; (b) the University's Strategic Plan; (c) numerical data (submitted separately both in hard copy and in disc form); and (d) the University's Operating Statement. MISSION STATEMENT: UNIVERSITY OF OXFORD 1. The nature of the University and its principal aims 1.1 The University's long-term aims are: (a) To ensure that the University, as a self-governing academic community, maintains and enhances its standing as a world-class university in both teaching and research. (b) To identify new areas of study and research for development and enhancement, responding to contemporary developments in both the intellectual and political environment. (c) To maintain the health of the college system, which allows the University to combine the economies of scale and special facilities of a large university with a close-knit and responsive working environment for teaching and the exchange of ideas in a democratic community of scholars. (d) To provide education and training of excellent quality at undergraduate and postgraduate level. (e) To strengthen the research base of the University and, if necessary, adjust the balance of time accorded by members of academic staff to teaching, research, and administration. (f) To raise the profile of graduate studies in the University progressively over the next decade. (g) To encourage students of the highest calibre from overseas and facilitate appropriate international experience for its own staff and students. (h) To be more widely accessible, both by broadening recruitment to its degrees and by expansion of high-quality post-experience vocational and adult-education courses. (i) To conserve, enhance, and utilise fully its special resources such as its historic collections. (j) To maintain close collaboration with industry and the professions in pursuing research and to ensure that the fruits of that research are made available to outside bodies both for commercial exploitation and more generally for the benefit of society. 1.2 Given these long-term aims, the University's general objectives in the period 1993--7 are: (a) To continue to attract high-quality students and staff, who are essential for the maintenance of the University's academic standing. (b) To provide appropriate facilities for the support of research, and in particular to enhance provision in this regard in the Arts and Social Studies, to reflect developments in methods of research in these fields. (c) To continue to exploit to the full the advantages of the collegiate system and in particular its specific advantages for undergraduate and graduate students. (d) To further strengthen links within the collegiate University as a whole by seeking more rapid and reliable modes of communication and decision-making between its constituent parts. (e) Continuously to review teaching and monitor academic standards. (f) To reappraise and rationalise the allocation of space in the light of present and anticipated needs. (g) To develop further the use of IT for teaching and learning and for research throughout the University. (h) To simplify and co-ordinate the delivery of library services both by the rapid growth of IT and by restructuring the management of libraries. (i) To improve access to information within and between the academic and administrative services of the University by a substantial extension of IT and to promote its value as an essential functional tool university-wide. (j) To develop further both teaching and research links with the European Community and other countries and to facilitate entry, by the provision of studentships, by the highest-quality students on a world-wide basis. (k) To continue to adapt its entry requirements to facilitate access to the University by a wider range of applicants and significantly to expand its contribution to vocational and non-vocational Continuing Education. (l) To continue to develop flexible policies and procedures to encourage the funding of research from a wide variety of outside sources and to further income-generation by the exploitation of intellectual property. (m) To further its ability to provide for the needs of a major international university by securing additional resources through its Development Campaign. STRATEGIC PLAN: UNIVERSITY OF OXFORD 1. Academic aims and objectives 1.1 Subject development 1.1.1 Management Studies. The University continues to make progress in establishing its new School of Management Studies and plans the introduction of a new two-year MBA degree, with an eventual intake of 150. Appointments have been made to the Directorship of the School and to the newly established Peter Moores Professorship of Management Studies (the holder of which will also be the first Academic Director of the School), and arrangements are being made to fill a Readership in Management Studies (the holder of which will also be the first MBA Director). At the undergraduate level, courses in Engineering (or Metallurgy), Economics, and Management are to be expanded, and a new course in Economics and Management will begin in October 1994. The full realisation of these plans, which constitute a major new academic development for the University, are dependent on the raising of significant capital funds through the Development Campaign. 1.1.2 Computing Science. The construction of a major extension to the Computing Laboratory is now well under way. In the light of this, planning for the introduction of the new Honour School of Computation in October 1994 is proceeding, with the provision of the first necessary additional posts and other resources. 1.1.3 Continuing Education. The University has continued to expand its CE activities in the light of its 1990 review of policy in this area. It has agreed a substantial increase in funding and premises for the Department for Continuing Education to facilitate new developments. A new Advisory Council on Continuing Education has been established to provide an improved mechanism for consulting individuals outside the University on the development of CE programmes. The department co-operates with Oxford Brookes University in teaching a new Master's course in Historic Conservation; the course is modular in form, and part of it entitles students to a certificate awarded by the department. Most recently, a new, progressive structure for CE qualifications has been introduced, leading from access-level certificates through undergraduate certificates and diplomas to postgraduate, post-experience diplomas and Master's degrees. It is planned to introduce more credit-bearing CE courses available on a part-time basis, particularly Master's degrees, and Foundation courses at first-year undergraduate level. The numbers returned in the student forecasts show a substantial increase, particularly in the latter part of the planning period, but much will depend on decisions still to be taken by the HEFCE on what constitutes an `accredited' course. Continuing Professional Development (CPD) activities have developed following the creation and filling of the new post of Director of CPD in 1991 and consequent additional appointments in the CPD unit. A network of staff across the University has been established to identify needs and trends in a range of disciplines and related industrial sectors. The University has recently introduced two part-time graduate courses in association with the department; and, in addition to the department's CE activities, the role of Rewley House as a college base for CE students will develop further, since many of these students will be presented for matriculation through it. 1.1.4 Four-year undergraduate courses. The University remains of the view, in common with many other institutions, that with changes in the school curricula on the one hand and the need for better preparation for graduate work (notably in the European context) on the other, it will need to extend some undergraduate courses from three to four years. It has now been agreed to introduce a four-year course in Physics (alongside the three-year course) with effect from October 1993. It is expected that most undergraduates will take this. Discussions are proceeding on the introduction of a four-year course in Mathematics which perhaps one-third of the undergraduates reading the subject would take. The University none the less is carefully reviewing this matter, given the possibility of financial penalties by the HEFCE in respect of recently lengthened courses and the proposals in the White Paper on the funding of science for the establishment of one-year taught graduate courses as the common precursor to the undertaking of the D.Phil. 1.1.5 European Studies. The University has established an Institute for European Studies, which will consist of several centres concerned with teaching and research in particular aspects of this subject. The institute will be the co-ordinating body for the centres and will link with Institutes of European Studies in other European countries in a network known as the Europaeum. Funds will be available for these centres (and in particular for Oxford in the first instance) from the European Studies Fund, a trust established within the University to which generous donations have already been made, including funds for a five-year professorial level appointment as Director of the Institute. This appointment and the appointment of three five-year lecturers have now been made. A fixed-term professorship is being filled. Oxford is the co-ordinating institution for the Europaeum. At present two Oxford centres are planned under the auspices of the institute. One, which is already established, is in European Politics, Economics, and Society under the auspices of the Social Studies Board and concentrates in particular on graduate teaching for an M.Phil. in this area and on research. The other is in European and Comparative Law, under the auspices of the Law Board, and will be related in particular to the degree of M.Juris., a one-year postgraduate degree, and to a new four-year undergraduate degree in Law, one year of which is spent at a European university. Other developments are probable, including further graduate degrees. Through the institute and its centres, and as part of the Europaeum, the University will develop research work in contemporary European fields and will be able to provide a source of expert advice to European governmental agencies and industries. 1.1.6 American Studies. The University is actively seeking funds under the Development Campaign for a proposed Institute for American Studies, designed to link and to reinforce existing interests in American History, Law, Politics, and Literature. Funding has been obtained for lecturerships in American History and American Foreign Policy, and the establishment of further posts is planned. An integral part of the development will be the reorganisation of the University's associated library holdings, and funding has been obtained for the institute's library. 1.1.7 Oxford Institute of Legal Practice. The University attaches importance to collaboration with Oxford Brookes University. This already exists both formally and informally but a new development in this respect is the proposed establishment of the Oxford Institute of Legal Practice (OILP), a joint venture between both universities. The object of this will be to run a Legal Practice Course (LPC), validated by the Law Society, and so to establish in Oxford an institute, based on co-operation between the two universities, to bring together academic and professional aspects of law. Members of the Law Faculties of Oxford and Oxford Brookes Universities have worked together to develop the LPC, and it is intended to establish OILP, subject to formal validation by the Law Society, as a company limited by guarantee and as a charity, under the guidance of a board of trustees appointed jointly by the two universities. It is hoped that validation will be finalised in September 1993 to allow the course to start in 1994. 1.1.8 Taught Master's courses. The University continues to review provision of taught Master's courses, bearing in mind the White Paper on the funding of science, and in particular is considering the introduction of further part-time taught Master's courses as a way of increasing access by students from non-traditional academic backgrounds (see para. 1.1.3 above). 1.1.9 Learning technology. The University is committed to encouraging the use of learning technology in all disciplines. It is an active partner in eight TLTP consortia and hosts an ITTI project, a CIT Centre, and CTISS, the co-ordinating body for the CTI. CTI services are well used by academic staff and the University would wish to see the initiative continue. 1.2 Research The University is determined to continue to strengthen its standing as a world-class university in respect of its research. To achieve this will require further investment of resources in academic staff and the infrastructure to support them, such as library provision, information technology, research support, and additional space, including the acquisition of further sites for development. These needs, and the University's response to them, are discussed at greater length in section 3 of the planning statement on physical resources. As a general policy the University expects all its departments and faculties to be rated highly in terms of their research, and where this is not the case has reviewed, and will continue to review, the position to see how research standing can be improved. It is currently taking steps to develop in detail a long-term strategy for research in the Biosciences (see para. 3.4 below). As indicated in paras 1.1.5 and 6 above, the developments in European Studies and American Studies are expected to consolidate and build on existing research strengths in these fields. 1.3 Student numbers 1.3.1 As indicated in its mission statement, the University is determined to nurture excellence in all subjects. Given the severe limitations of physical plant, the University is planning a slow but steady growth in student numbers (home/EC and overseas) of around 1 per cent per annum across almost all subject areas, with a modest increase in the ratio of Science to Arts students. One major problem affecting growth is that residential accommodation in the City is expensive and in short supply, and the local planning authority expects the University and the colleges to provide accommodation for all additional students. Moreover, within Oxford itself, there is a shortage of space for new buildings for teaching, research, and student accommodation (see para. 3.2 below). Given the constraints on space and the existence of two universities within the City, the University operates an informal zoning agreement with Oxford Brookes University, so that, for example, the University made no bid for a major site which was recognised as being crucial for the development of Oxford Brookes University. 1.3.2 The University's 1990 planning statement envisaged overall growth of 1 per cent a year with an increase in the proportion of graduates to undergraduates. In keeping with that statement growth in undergraduate numbers over the past few years has been less than 1 per cent a year. This in part reflects the view of a majority of colleges that they have now reached the optimum size for operating as a cohesive academic unit and do not envisage any growth of total student numbers (although of these a significant proportion has indicated that they wish to change the `mix' of students, by admitting more graduate students in place of undergraduates). The University expects this trend to continue. A new standing committee has been established jointly between the University and the colleges to improve co-ordination and planning on undergraduate admissions matters. 1.3.3 As planned, graduate numbers are growing at a much faster rate than undergraduate numbers (17 per cent since Michaelmas Term 1989). The University has reviewed with faculty boards and other admitting bodies the number of additional graduate students which on academic grounds they would wish to take (within the limits of their predicted resources) over the next five to ten years. (A similar inquiry was directed to colleges.) As a result of such consultation it is planned that over the period 1989--90 to 1999--2000 there should be an increase in total (FTE) graduate numbers of around 700 (home/EC and overseas), a significant proportion of which has already been achieved; this would allow room for undergraduates to increase by 1,300 and for the overall growth of the University to be contained within the broad policy approved by Congregation of 1 per cent a year to the end of the decade. 1.4 Educational Studies and Westminster College The University agreed with effect from September 1992 to validate, in place of the CNAA, courses at Westminster College leading to the Degrees of Bachelor of Education, Bachelor of Theology, Master of Education, and Master of Theology, as well as the Postgraduate Certificate in Education, the Diploma in Higher Education (in certain restricted circumstances), and the Postgraduate Diploma in Applied Theology. This was an important new step, the immediate advantages of which are involvement in all aspects of teacher training, instead of only in the training of secondary school teachers with which the Department of Educational Studies was previously concerned, and the broadening of the University's own activities in accordance with the general changes now taking place in higher education. The University continues to foster this relationship with its neighbouring college of higher education, while at the same time recognising that the changes proposed most recently in initial teaching training are likely to have a significant impact on its provision in Education. As a result, the University will review not only its relationship with Westminster but the balance of activity within its own Department of Educational Studies. 2. Staffing policies 2.1 Policies, objectives, and patterns of employment. The University wishes to continue to recruit and retain staff of the highest quality. A point of serious concern is the shift in the balance of staff from established to contract-funded posts which appears set to continue primarily as a result of the transfer of research funding from the UFC/HEFCE to the research councils, of substantially increased external research income from all sources, and of constraints upon core funding from the HEFCE. In consequence, concern is mounting in the University over its ability (a) to maintain the core of qualified staff who provide essential services and continuity, especially in the science departments, by way of research support, and (b) to provide an internal career structure which will prevent a wasteful loss of skilled and experienced staff. This concern will continue to be addressed, and the University will also keep under review the terms and conditions of employment of grant-funded staff as compared with established staff. Consideration is also being given to issues associated with the profile of the University's staff by sex, ethnic origin, and grade, and this work is expected to develop further in relation to the University's equal opportunities policy. A major consultative exercise on the nature and role of promotions with regard to academic staff is also under way. 2.2 Staff training and development. The University has committed additional resources to this area, and has increased the range of courses and professional development opportunities for all categories of staff. It is expected that the staff development programmes will be improved and extended still further. 2.3 Appraisal. Appraisal is in operation for academic and related staff. The scheme for academic staff has been thoroughly reviewed, and that for academic-related staff is under review. Both schemes are accepted as playing a valuable role in institutional and personal development. Appraisal has recently been introduced for clerical staff, and appraisal schemes for other categories of non-academic staff are being developed. 2.4 Selective salary payments. A range of such payments has been introduced following the inclusion of an element for this purpose in successive academic and academic-related salary settlements (e.g. more extensive promotion exercises, distinction awards for professors, other payments for readers and lecturers, and super-scale payments for academic-related staff). While there may be some doubt whether such provision will continue in future salary settlements, the University remains firmly of the view that the majority of these arrangements, at least as regards academic staff, are an inadequate substitute for satisfactory levels of general salary increase when applied to a university in which virtually all staff are of the highest quality. It is this University's view that selective payments to a minority are more likely to do damage by their divisiveness than to benefit the University by encouraging those who receive them. Moreover, the administrative cost of the procedure for making awards is high. The University would prefer a truly discretionary system of salary awards, i.e. one which would give the University complete freedom to decide how to disburse the whole of the national settlement. 2.5 Joint college/university appointments. The University is currently undertaking a detailed inquiry into the general relationship between college and university responsibilities in respect of undergraduate teaching and graduate teaching and supervision. This includes the possibility of `trade-off' arrangements between various duties (for which some funds have now been set aside), comparative financial incentives for the different kinds of teaching, and resource allocation questions related to these matters. An important strategic requirement over the next few years will be to make progress with the resolution of these questions which bear crucially on the structure of a collegiate university and raise fundamental questions about the nature of undergraduate teaching at Oxford and its relationship with graduate teaching and supervision. 3. Physical resources 3.1 Medical School---`the Headington Strategy'. As the HEFCE is fully aware, one of the major issues arising for the University within the planning period is the likely effect on the University's Medical School of plans by the Oxfordshire Health Authority to consolidate Oxford hospital activity at Headington. Activity in Oxford city hospitals is at present scattered across a number of main sites (the John Radcliffe and Churchill Hospitals, the Radcliffe Infirmary, and the Nuffield Orthopaedic Centre) as well as several smaller specialised sites (Warneford, Littlemore, Rivermead, etc.). The Health Authority has had it in mind for many years to consolidate the main hospitals on to one or two principal sites and to rationalise the use of the specialised sites. The authority has put forward positive proposals (`the Headington Strategy'), now under consideration by the Regional Health Authority with the intention of submitting the proposals to the Department of Health by December 1993 for `Approval in Principle', for consolidating the main hospitals on to two sites, namely the John Radcliffe and Churchill Hospital sites, with the consequent closure of the Radcliffe Infirmary. As a separate project, which will go ahead irrespective of progress of `the Headington Strategy', the Oxfordshire Health Authority intends to close Littlemore Hospital and to transfer the activities carried out there to a new site or into the community. These proposals will have a major effect upon the University, since several Medical School departments (the relocation of which alone is estimated to cost some 16m), as well as a number of related research groups, are located at the Radcliffe Infirmary, while the Department of Psychiatry has laboratory space at Littlemore Hospital. Under the reorganisation plans both these hospitals would be closed and the sites sold. In addition, one option also envisages the closure of the Nuffield Orthopaedic Centre, where the University's Nuffield Department of Orthopaedic Surgery is located. The University is pursuing separate discussions with the HEFCE on the full financial implications of these proposals, which raise matters of major importance for the future financial position of the University, especially when taken in conjunction with para. 3.2 below. 3.2 Radcliffe Infirmary site. The University has as a major objective for the future the acquisition of the whole of the Radcliffe Infirmary site, if the Headington Strategy goes ahead, for use for university purposes. It is essential for the continued academic development of the University, even though its projected expansion in student numbers terms is relatively modest, that the University should achieve that objective. There remain few available sites for development in Central Oxford, and the Radcliffe Infirmary site is well placed to serve as a logical extension of the University's Science Area. It is clear from current projections that demand for additional space within the University for both Arts and Sciences will considerably exceed the capacity of the University's present buildings and the available development sites on which the University might build. The University's aim of securing the Radcliffe Infirmary site has been recognised and is supported by the Health Authority, subject to appropriate funding being available for the purchase of the site, the value of which is estimated by the Health Authority to lie in current prices at around 20m.* It has also been endorsed by the city planning authority in the context of the Oxford Local Plan Review 1991--2001. The University has in place a funding strategy to enable it to achieve this objective; the funds, however, which it would hope to raise for that purpose would not be available to meet the costs of relocating the medical departments (see para. 3.1 above). There is then the further issue of funding for the university capital developments on the site once it has been acquired. 3.3 Facilities for Arts and Social Studies. The need for improved facilities for Arts and Social Studies, as an aid to the recruitment and retention of academic staff and to assist in the improvement of research activity, has caused the University to launch a review of three sites (namely the area around the St Cross Building, the central site surrounding the Bodleian Library, and the Taylorian/Ashmolean site) to see what scope there is for the rationalisation of existing uses and what changes can be made to make better use of them, with a view to defining a comprehensive and coherent scheme for the development of each site which has most to commend it on academic grounds. In conducting this review the University has taken into account the feasibility of raising the necessary funding from outside sources. The St Cross development is crucial for the development of Management Studies and of European Studies and the rationalisation of provision for Social Studies (including International Relations) and Law. In reviewing the central site, consideration has been given primarily to the needs of History and of English in so far as the needs of the latter cannot be satisfied on the St Cross site. Rationalisation of the Ashmolean/Taylorian site is expected to produce much improved facilities for teaching (especially for graduate teaching) and research in several subjects in the Humanities (namely, Archaeology, Classics, History of Art, Modern Languages, and Oriental Studies), and to enhance the space available to the Ashmolean Museum and improve its ability to fulfil its teaching, research, and public roles. In all three cases a considerable improvement of library provision and management in the relevant areas is expected. Initial reports have now been received and detailed consideration will now continue. The implementation of the proposals, once fully defined (and subject to the raising of the necessary funding), will form a major element of the University's management of its physical resources during the planning period. In the meantime modest additional sums have been set aside for research and other support for the subject areas concerned, and some funds are available for further increased infrastructure support once additional accommodation can be made available. 3.4 Science Area. As indicated in para. 3.2, most sites in the Science Area are now full, but one pocket remains for modest development, probably for the Biosciences. Proposals drawn up in 1990 were unsuccessful but other plans are being prepared. Procedures for planning developments in the Biomedical Sciences have been improved, to ensure that full account is taken of the needs both of subjects based in South Parks Road and of those on the hospital sites. 3.5 Research facilities. Given the pressure on sites within the Science Area the University is actively pursuing the possible provision of research facilities on other sites within the City, in addition to seeking to acquire the Radcliffe Infirmary (see para. 3.2 above). 3.6 Libraries and museums. The University is committed to continuing its support for Oxford's great historical collections (including the Bodleian Library and the Ashmolean, Pitt Rivers, and University Museums), which form a national, and international, resource for scholarship, and to maintaining acquisitions in its central research libraries (Bodleian, Ashmolean, and Taylorian) at a level commensurate with their responsibilities to the international scholarly community. The University has established a Museums Committee to permit more formal discussion of common problems amongst its museums and is about to launch a review of the Ashmolean. As indicated in para. 3.3 the University is reviewing relevant library provision as part of its inquiry into the rationalisation of academic provision on three major university sites. The University is also committing substantial funds to assist with automated cataloguing, in particular for the conversion of recent paper catalogues in the Bodleian, and is pursuing other aspects of library automation, to facilitate access to its collections. By this means, scholars from other universities world-wide will have improved access to the library's collections without leaving their desks. The University through its Libraries Board regularly reviews specific aspects of the organisation of the University's library provision with a view to making the most effective use of available resources. 3.7 IT developments. The University has been pursuing the details of its IT strategy and in 1992--3, following extensive consultation, it has settled on the framework for the technical elements of this, the principle of which is distributed computing using a client--server model. The University and the colleges are jointly funding the installation of a university-wide fibre-optic network, which will provide the necessary infrastructure for this. The plan for the next few years is to implement the strategy by significant additional investment in staff and equipment and the internal networking of buildings. All aspects of IT (i.e. teaching and research, library, and administrative) are being looked at as a whole. The University has accelerated its planning process in order to take account of the ending of the seven-yearly cycle for the replacement of central computing equipment and the provision of interim funding by the HEFCE in 1992--3 and 1993--4. The University has committed substantial additional resources for IT in 1993--4 in order effectively to implement its long-term strategic plans for IT. Administrative computing (for which the University has created and filled the new post of Director of Administrative Information Services) will continue to be developed under the Management and Administrative Computing Initiative. 3.8 Long-term maintenance. The University has completed its own survey (through consultants) of the backlog of repair and maintenance of university buildings, and has reviewed the level of funding which might reasonably be put towards the backlog in addition to its customary allocation for repairs and maintenance. This has involved non-recurrent additions of 2m in 1991--2, and 1.5m in 1992--3 and 1993--4, over and above its recurrent baseline of 3m. The University has noted the intention of the HEFCE to make grants over the next two years towards the costs of the highest-priority work. None the less, it has concluded that if the backlog is to be eliminated there will need to be a similar increase in the recurrent baseline, which represents a substantial commitment of university funding. 3.9 Lecture theatre usage. The University has recently reviewed usage of lecture theatres and seminar rooms, and will be giving further consideration to the question whether more efficient arrangements can be adopted with regard to the scheduling of lectures, including further co-operation with its constituent colleges in the shared use of facilities. 4. Financial requirements 4.1 General policy The University's approach to financial planning (as has been explained on previous occasions) is essentially conservative, in that its systems are aimed at forecasting what funds will be available during the planning period and deciding how best to apply them to the academic priorities already identified. As mentioned above, the development of Management Studies (para. 1.1.1) and (more particularly) physical developments relating to the Radcliffe Infirmary site (para. 3.2) and to the facilities for Arts and Social Sciences (para. 3.3) are dependent upon additional external funding being received. The financial forecasts do not assume that such funds will be available, but reflect the position as it is expected to be on the basis of reasonably firm government funding projections, with Management Studies developing slowly and with no major physical developments other than those funded by outside sources. 4.2 Specific issues and assumptions 4.2.1 The University is budgeting for a deficit in 1992--3 leading to an accumulated deficit at the end of the year of 3.7m, having decided that the general financial outlook was sufficiently encouraging for it not to delay allocating funds towards the backlog of long-term maintenance (see para. 3.8 above); it believes that there will be a small but steady growth in student numbers, and that changes in the HEFCE's method of distributing funds for research will benefit it. It is currently budgeting for a modest deficit on the Income and Expenditure Account for 1993--4, which will result at 31 July 1994 in an overall deficit of 4.2m. The possible effect from 1994--5 onwards of the lifting of the cap on QR income has encouraged the University to prepare plans which, if its assumptions about future funding levels are realised, will allow it to reinforce the physical infrastructure of the University as well as funding academic developments, while bringing the Income and Expenditure Account back into a cumulative surplus by 31 July 1996. Evidence is accumulating that the cap, in combination with the transfer of funds to the Research Councils, has had a serious effect on the intellectual life of the University, and its removal is earnestly awaited. 4.2.2 The financial forecasts assume that the University will in due course succeed in recovering from the research councils the funds which it is expected will be lost from its HEFCE grant under the DR-shift. It is exceptionally difficult to make predictions about the effect of the DR-shift with any accuracy; and it is a matter of concern to the University that even when the shift has been completed it will not be possible to say (either at this University or, probably, at any other university) how much is being recovered as additional direct costs. The figures used in the financial forecasts must therefore be regarded as to some extent hypothetical. 4.2.3 The University is assuming that any growth in its student numbers will be on a fees-only basis, and will include proportionately more graduate and Science students than undergraduates and Arts students. 4.2.4 The financial forecasts include income from benefactions already received as a result of the University's Development Campaign, but make no allowance for future capital or revenue receipts. They do, however, reflect the expectation that expenditure on the Campaign will be significantly reduced with effect from 1994--5. 5. Securing quality 5.1 It will be clear from the foregoing paragraphs that the maintenance of quality in all its aspects is central to the University's aims in every area of activity. The major initiatives to which reference has been made, and the very many more lesser developments which are in train are a direct result of a continual process of review of structures, organisation, academic procedures, and course content. 5.2 The initiative for such quality-related changes arises variously: (a) at departmental and faculty level in the course of routine evaluation and monitoring of staff development, student intake, syllabuses, teaching and examining methods, and support facilities in response to the evidence of annual appraisal, training course reports, examination results, examiners' reports, and student feed-back, as well as to external factors such as school syllabus changes and employers' requirements; (b) from the process of the regular review of departments and faculties by ad hoc review bodies, which always include strong external representation (this formal review procedure has recently been amended to provide for the review of all departments and faculties on, approximately, a ten-year cycle rather than, as previously, simply associating reviews with the impending retirement of a head of department); and (c) through the standing committees of the central university bodies, for example, the Libraries Board and the Committees on Academic Computing Services, the Relationship of the University with Schools, Undergraduate Studies, Graduate Studies, (academic) Appointments, the Training of University Teachers, and Planning and Development. These committees, most of which meet several times each term, are responsible under the Hebdomadal Council and the General Board for keeping under review all aspects of academic activity in their areas in the University as a whole and for scrutinising proposals for new developments and procedures, which must be submitted to them by faculty boards, departments, and other bodies. All but minor changes are subject further to the scrutiny and approval of the General Board, and, where major developments are involved, also to that of Council and Congregation. 5.3 The University will take account of the report of the Academic Auditors (which is expected in August 1993)** and of reports of the HEFCE quality assessors as they review individual subjects. OPERATING STATEMENT 1993--4: UNIVERSITY OF OXFORD 1. In reaching decisions on how to allocate funds beyond the `existing commitments' budget for 1993--4, Council and the General Board have borne in mind the following major points. (a) On the positive side, the University's grant (like those of the other major research universities) was capped this year in order to cushion the effect on institutions with lower QR ratings of the effect of the new formula for calculating R. It is expected that the cap will gradually be removed in the next two years or so, thus producing additional income (on present figures, perhaps some 3m). (b) On the negative side, (i) there is a very considerable possibility of cuts in public expenditure from 1993--4 onwards, (ii) one particular effect of such cuts may be increased financial pressure on colleges caused by a series of extremely unfavourable fee settlements, (iii) the fee compensation element of the grant cannot necessarily be counted on in future years and, (iv) there is considerable uncertainty about recovery of funds transferred to the research councils (see 6 below). 2. Council and the General Board have agreed therefore that it would be imprudent to allocate recurrently a high proportion of any additional money. They have also agreed that it is necessary to bear in mind in making allocations the increasing indications that government policy will require universities to account more precisely for expenditure from the R element of the grant. 3. As a result of the decision in 2, some 30 per cent of the funds available for new allocations in 1993--4 has been allocated recurrently and 70 per cent non-recurrently amongst the five spending sectors (General Board, Buildings Committee, Health and Safety Committee, Central Administration, and direct-grant departments). 4. Within these allocations, the following major objectives are being pursued. (a) The continuation of non-recurrent allocations towards the backlog of repair and maintenance of buildings (especially as the HEFCE is now making some matching funding available). (b) The continuation of a significant programme of major capital expenditure on buildings (refurbishment, conversions, extensions, etc.). (c) The need to allocate additional funds for building alterations required by incoming professors. (d) The need of libraries and IT for both capital and recurrent funds. (e) The importance of maintaining a high rate of refilling academic posts. (f) The desirability of funding a trade-off scheme (i.e. to set off graduate teaching, and research, against undergraduate teaching) to ease burdens on academic staff and allow more time for graduate teaching and research, particularly in the Arts. (g) The need to take account of the effects of the DR-shift so that, while the University continues to make deductions in the recurrent grants of the relevant departments, a significant non-recurrent sum is provided for allocation to departments where recovery from the research councils has been particularly difficult. (h) The need to provide some recurrent funds for new academic developments, particular importance being attached to reinforcement of research in the Arts where the results of the research assessment exercise were in some areas disappointing. (i) Development of the three-site strategy to improve the physical facilities for arts and social science departments. 5. In pursuit of these objectives, the University has agreed the following allocations. This is not a complete list but is intended to illustrate both the range of demands on university funds and the way in which attempts are made to meet them, in the context of the policies in paras 2--4 above. (i) Non-recurrent (a) Rolling Programme for major building expenditure 2,666K Expenditure from this will include a contribution to Zoology associated with the needs of the new Linacre Professor, conversion of space for Physics, Clarendon Laboratory heating, the remainder of the cost of converting the Clarendon Press Institute for Chinese and Linguistics (part funded in 1992--3) and some topping-up of special HEFCE funds provided for work to meet requirements of new regulations for animal houses. (b) Major expenditure on building repairs in addition to the baseline of 3m 1,500K (It is agreed policy to try to add such a sum to the normal repairs baseline each year in order to make inroads on the arrears.) (c) Capital funding associated with professorial appointments (Applied Social Studies, Clinical Medicine, Clinical Biochemistry, Psychology) 400K (d) Contribution to repairs of John Radcliffe Hospital 303K (e) Health and Safety (i) Fume cupboards (sixth tranche of programme) 200K (ii) Fire precautions programme 333K (iii) Upgrading of laboratories in Biological Sciences to meet Health and Safety Executive requirements 100K (f) Fibre-optic link from John Radcliffe Hospital to Science Area 100K (g) Bodleian: grant towards cost of conversion of the 1920--85 catalogue 450K (In 1992--3 400K was provided for the conversion of the interim card catalogue and 32K for the conversion of the union list of scientific periodicals.) (h) Assistance to departments affected by DR-shift 500K (The General Board has noted that at least as much as this, and probably more, will be needed to provide further similar assistance to departments at the end of 1993--4.) (i) Preliminary developments arising from three-site strategy 100K (ii) Recurrent (a) Sufficient funds to enable 37 academic posts (compared with the original pessimistic estimate of 18) to be released from 1 October 1994 with a further review in Michaelmas Term 1993 to see if the release of a small additional number may be possible ? (b) Trade-off scheme (to allow CUF lecturers to set off graduate supervision and teaching against undergraduate tutorial teaching) 650K (c) General academic bids (with priority to needs of non-departmentally organised subjects in the context of the three-site strategy) 400K (d) Research and Equipment Committee Additional funding for the Bridging Support and Special Research Grant Schemes 50K Funding for research grants to departments to provide for new and recently appointed lecturers, with priority being given to the Sciences 75K (e) IT posts 100K round (f) Further IT support, as IT strategy develops 200K (g) Honour School of Computation 167K by 1995 (Recurrent and non-recurrent allocations were also made in 1992--3.) (h) Honour School of Economics and Management 35K 6. The University is particularly concerned about the effect of the transfer of funds to the research councils. It is unclear whether it will be possible to recover recurrently all that has been transferred; even if this can be done, there are almost certain to be non-recurrent losses. The recent changes in the thresholds for extra direct costs are welcomed but the effects will take time to be seen. The allocation of non-recurrent funds for help early in 1993--4 to the departments most seriously affected and the likelihood of a similar (or even larger) allocation 12 months hence are major elements in the University's immediate policy for the allocation of funds. It seems probable that these and other methods of coping with the dislocation caused by this major change in funding will play a significant role in the University's financial and therefore its operating policy for the next three years or so. Footnotes *The University does not accept that this is necessarily the appropriate valuation for the site, which will need to be determined at the time of sale. **See Gazette, p. 81, for this report.