This message is about decisions made by the University Council yesterday, and relates to the academic University only. The measures described in this message do not apply to the Colleges, Cambridge Assessment, Cambridge University Press and those employed by them.
In my regular update to the University last Thursday, I said that the University Council would this week be considering, once again, the financial impact of the Coronavirus pandemic. I have written before about some of the potential consequences of the crisis. Alongside its tragic human cost – the large number of people made ill by the disease, and those who have sadly died – COVID-19 has interrupted our core activities and, in doing so, severely affected the University’s financial outlook.
We are not unique in this. There is not a single university in the world that remains unscathed by the effects of the crisis. For some higher education institutions, it poses an existential risk. The University of Cambridge is in sufficiently good financial health that we can avoid some of the more desperate measures. We are still, however, faced with the prospect of some very challenging decisions.
I have said before that even a relatively swift resumption of activities would still expose the University to a significant financial detriment. An extended downturn, with inevitably longer-lasting economic effects, would require even deeper changes across the University.
I have also said before that, in implementing any of those changes, we would be guided by some core principles:
- To uphold at all times the University’s mission, and build upon our unique intellectual resources to produce the new thinking and the discoveries that will enable change on a global scale.
- To focus on protecting our staff, ensuring that we maintain the capacity that allows us to rebound – and to thrive – once the immediate crisis is over.
- To maintain and strengthen our widening participation agenda, ensuring that the current crisis does not accentuate inequality of educational opportunity.
- To seek the opportunities to improve our administrative processes, making them more efficient and making jobs more rewarding, while identifying savings wherever possible.
We can only uphold the academic University’s mission, protect the people who will deliver it, maintain the widening participation agenda and improve our processes if we act now to tackle the serious financial losses we are faced with. The decisions Council discussed and approved yesterday, and which concern University-employed staff only, are essential to help us avoid even tougher decisions in the future.
The key decisions approved by Council yesterday are the following:
1. Limited reward and progression schemes for the year 2020/2021
The University will limit the use of its reward and progression schemes for the academic year 2020/20201. The following schemes will now not run: Professorial Pay Review 2020; Grade 12 Contribution Reward Scheme 2021; USL Contribution Reward Scheme 2021; and Researcher Increment Scheme 2020/21.
The University’s HR Committee has been asked to consider at its extraordinary meeting in July whether, as an alternative to cancelling Academic Careers Pathways 2021, it would be possible to run a "titular" promotion exercise through which a staff member’s title is upgraded, even if not their remuneration.
A more limited version of Grade 1-11 Contribution Reward Scheme 2021 will run, with applications only open to assistant staff in Grades 1 to 5 – they will only be able to apply for one-off single contribution payments. It has been agreed that the costs of these payments will be met by the central Administered Fund for the 2020/21 exercise.
Current reward and progression schemes – those already launched – will continue to their conclusion, including Professorial Pay Review 2018 and the Researcher Increment Scheme.
2. Further recruitment restraint beyond 31 July
The HR Committee will consider how the University might continue to exercise restraint on recruitment. The review of the current recruitment pause is underway, and a paper setting out the findings of the review will be considered by HR Committee at its meeting in July. Feedback is currently being sought on the application of the Temporary Recruitment Protocol via the Exceptions Approvals Group to feed into the review process. The use of market pay mechanisms will also be looked at in that context.
3. Voluntary pay reduction scheme for staff earning over £100k involving a pay cut of 10 per cent of total remuneration for a period of six months.
The HR Committee will implement a voluntary temporary pay reduction scheme, over six months, for senior University staff whose total remuneration exceeds £100k annually (pro rata), asking them to consider a reduction of 10% in total remuneration. A detailed proposal for how the scheme could operate will be considered by the HR Committee at its meeting in July.
I will be taking part in this voluntary scheme and have offered to undergo a larger pay reduction of 15% over the scheme’s six months. As with any decision related to my own pay, this offer has been considered and approved by the Chair of the Council’s Remuneration Committee.
4. Contract Extension Scheme
To ensure that staff and institutions had sufficient notice to plan beyond 31 July, the review of the Contract Extension Scheme was brought forward. The decision of Council was that the scheme should not continue beyond the end of July. Any further extensions to contractual arrangements will now need to be considered in line with the recruitment restraint measures that follow from the review of the current recruitment pause.
The decisions relating to pay restraint affect the academic University only, and do not apply to the Colleges, Cambridge Assessment, Cambridge University Press and those employed by them.
I acknowledge the huge efforts already being made by people across the academic University to help us stand up to the challenge of the COVID-19 crisis. I realise that, coming on top of that collective effort, some of the measures agreed by Council yesterday will be a cause for further concern.
I must reiterate that these extraordinary and temporary measures have been taken in the current context to prevent us from having to make some even harder choices further down the line. They are also part of a much wider set of actions that the University is undertaking to mitigate the financial damage caused by the pandemic. Other measures include:
- Exercising significant restraint in our capital expenditure. Before the outbreak, a review of capital expenditure had led to a pause of planned capital projects of approximately £250 million. Additional constraints have now been imposed, including pausing all pre-construction projects with no new projects being started.
- Immediately launching the Strategic Procurement Review to make significant savings on University-wide procurement.
- Drawing on our central unrestricted reserves to deal with the initial financial shock posed by the pandemic.
- Working closely with the government, and with peer institutions across the wider education sector, to advocate for further government support measures.
- Developing a collegiate University plan – details of which are being considered by the Recovery Taskforce – that will consider how Cambridge might emerge from the current situation in a position of strength, seizing opportunities to enhance revenues.
- Heads of Institution were informed yesterday of Council’s decisions, and will have an opportunity to discuss them with members of our senior team at tomorrow’s weekly briefing for Institutions.
Decisions such as these are never taken lightly. In approving this course of action, the University Council has considered the best way to ensure that our University has the resources and the resilience to uphold its mission and safeguard its people both now and in the future.
Professor Stephen J Toope