Congregation Meeting, 2 June 2015

The following question was read by Professor Julia Bray, on behalf of the nine signatories to the question:

'Oxford University Strategic Plan for 2013–2018 stresses as part of our commitment to maintaining excellence of Oxford research that the collegiate University "will enhance the infrastructure which supports research at the highest level, including libraries". At the same time, funding for university libraries, on top of a 10% reduction in 2010–2013, was further reduced in 2013/4 and 2014/5 financial years, while additional savings, characterised in Michaelmas 2014 update from the Bodleian Libraries as "significant", will need to be found in 2015/6. Amalgamation of important research libraries in the Humanities is now being implemented or proposed (notably Taylorian Slavonic and Modern Greek library, Oriental Institute library and Sackler library), with considerable potential effect on the university's ability to conduct world-class research in these disciplines and on undergraduate and graduate teaching provision.

What consideration has been given by the Council to the potential detrimental effects of further cuts to the Bodleian Libraries budgetary settlement and to the possibilities of finding additional funding to libraries' operational costs?'

• Georgy Kantor, St John's
• David Seifert, St John's
• Barry Murnane, St John's
• Julia Bray, St John's
• Christopher Minkowski, Balliol
• Alison Salvesen, Mansfield
• David Taylor, Wolfson
• James Benson, Wolfson
• John Ma, Corpus Christi

The following reply was read by the Registrar, on behalf of Council:

'Council shares the view that the Bodleian Libraries are essential in order to conduct world-class research and teaching in Oxford and that the reputation and success of the University in these academic endeavours have been influenced by the collections and services provided by the libraries over the past 400 years. It remains committed to ensuring that the Bodleian Libraries can continue to provide their services to Oxford and recognises that the nature of the provision made by the Bodleian affects the academic disciplines in different ways.

Over the last five years Council has approved significant capital investments of just under £110m on library projects (funded from both University and philanthropic sources) to allow the development of the Book Storage Facility, refurbishment of the Radcliffe Camera and the Gladstone Link, the Weston Library, the Philosophy and Theology Faculties Library, and the creation of the Bodleian KB Chen China Centre Library, all of which contribute to the sustainability of the services and have enhanced the infrastructure to support research.

One of the reasons that the Bodleian Libraries are now making arrangements for accommodating required reduction through a combination of efficiencies in their existing service provision, raising additional funds, and reducing some areas of expenditure is the need for the University as a whole to maintain a sustainable financial plan. An additional reason for such change is the need to provide new services to support researchers in the University, including digital provision, open access support and research data curation and publication.

Council is accountable for the financial health of the University, for ensuring that the University has a strategic plan and an annual operating plan and budget; and that the Strategic Plan is supported by a financial and investment strategy. Council has, appropriately, addressed its considerations to the broad issue of a sustainable budget for the University as a whole, to ensure that facilities, collections and University infrastructure can be sustained responsibly into the future.

The University's Strategic Plan 2013–2018, proposed by Council and approved by Congregation, notes that to support the University's academic communities with appropriate libraries and museums, seminar rooms, laboratories, IT systems and research equipment will require significant capital investment; and to ensure that facilities, collections and University infrastructure can be sustained responsibly into the future will require a sufficient recurrent surplus. The Strategic Plan therefore aims for the University to achieve an operational surplus (calculated as earnings before interest, tax, depreciation and amortisation: EBITDA) of at least 5%, taking into account the increasing cost of replacing assets through inflation or rising expectations of functional suitability.

In setting the University's budget for 2014/15, Council, informed by the Planning and Resource Allocation Committee and the Finance Committee, noted that there was an anticipated shortfall against the University's EBITDA target in 2013/14 and future years. At that time EBITDA was forecast to be 4.7% in 2013/14 and about 4.5% in 2014/15 and 2015/16 without action being taken. To address this, Council required the University's budget to be set for 2015/16 with the aim of achieving the EBITDA target of at least 5% in that year. That required savings in that year across the University as a whole of the order of £9.5m.

Since growth in expenditure was the primary cause of the failure to meet the EBITDA target the necessary savings were allocated across the divisions and services pro rata to the growth in budgeted departmental expenditure between 2013/14 and 2014/15. This resulted in divisions and services being required to find savings on their submitted plans totalling £9.5m, with all service areas (Finance, Development, UAS and ASUC) required to make savings totalling £3.1m to accommodate the necessary reduction in funding.

A key element of the future strategy for providing sustainable funding, which would mitigate the negative effects of the reduction in other funding streams, is the continued development of an endowment fund. In the last five years the Bodleian Libraries' endowment value has increased from £27m to £45.5m, enabling the protection of key specialist staff positions, as well as providing funding for preservation, exhibitions, and acquisition of collections. As part of the Oxford Thinking campaign the Bodleian Libraries have been a strategic area for fundraising that has resulted in donations of £32.3m over the last five years with £4.7m cash received this year (to date). Efforts will continue to maximise income from philanthropic giving and so grow the endowment fund in support of the Bodleian Libraries. A plan to leverage external endowment for libraries and museums is under development and expected to come for discussion to PRAC this term.'

The following supplementary questions were asked:

Professor James Lewis, Wolfson and Oriental Studies:

'Given that the University is carrying extraordinarily low levels of debt compared to the sector generally and that the sector-average operational surplus lies at 3.7% or less, and that reportedly 90% of donations to the Oxford Thinking campaign come from Humanities and Social Science graduates, why is an operational surplus of 5% or more given absolute priority in the University strategic plan, when this policy results in small savings but irreparable damage to research infrastructure, to the University’s reputation and would cripple efforts to obtain endowments?'

The following reply to the above question has been approved by Council:

‘HEFCE requires higher education institutions to adopt a financial strategy appropriate to their strategic plan.  This must encompass how resources will be used and how activities and infrastructure will be financed.  On the recommendation of its Finance Committee, which assessed the appropriate figure to provide long term financial sustainability for the University in meeting its strategic objectives, Council adopted a 5% EBITDA target. This target is intended to enable a sufficient surplus to be generated, after covering operational costs, to enable the University’s estate to be replaced on a rolling basis and to contribute to the cost of new capital projects, thereby supporting and sustaining the University’s teaching and research activities. The University’s estate includes buildings, IT infrastructure and research equipment.

Strong financial management and evidence of fiscal responsibility are also key to securing debt finance and attracting funding from donors and funding bodies, who seek assurance that the University is able to manage and spend its income effectively.  This is especially important given our efforts to increase funding to the libraries from external sources, such as industry, grants and philanthropy.  These efforts are part of a wider attempt by the University to diversify its funding streams, in order to mitigate the impact of anticipated reductions in public funding.

On the Oxford Thinking campaign, of the £1.065bn given to the University to date, 15% has come from individual alumni.  The remainder of the funds contributed have come from non-alumni (25%), trusts and foundations (50%), and corporations and other organisations (10%).  As previously stated, efforts will continue to maximise philanthropic giving and so grow the Bodleian Libraries’ endowment fund further.  The value of that fund has increased from £27m to £45.5m over the last five years.

The sustainability of the Bodleian Libraries and their delivery of effective service provision are a key priority.  As universities across the UK consider how to respond in the face of reductions in public funding, Council seeks to safeguard the reputation and success of the University in its academic endeavours, not least through its library provision.  As Council stated in its initial reply, Council is clear about the importance of the Bodleian Libraries to the University, its students and its staff.’

Professor John Ma, Corpus Christi and Faculty of Classics:

'Given that, for Humanities and Social Sciences, libraries are the equivalent of laboratories and other equipment, could Council explain why capital investment in new projects is prioritised over the running costs of existing world-class research library infrastructure?'

The following reply to the above question has been approved by Council:

‘In adopting a financial strategy appropriate to the strategic plan, Council seeks to achieve a balance between competing priorities, including between capital investment in new projects and the maintenance of existing infrastructure.  An example of the former is the redevelopment of the Weston Library.  The New Bodleian was in urgent need of upgrading to modern standards required for one of the largest and most important repositories of historical and legal deposit materials in the world.  A recent example of the latter is the replacement of IT infrastructure to provide resilient support for library services.

In order to understand the potential impacts of proposed changes to library provision on teaching and research, the views and experiences of library users are vitally important.  Consultation processes provide a mechanism by which views on specific proposals can be canvassed, such as the recent consultation on the Sackler Library, following which the proposals were rejected. Alongside specific consultation processes, the Bodleian Libraries are committed to creating regular opportunities for dialogue with library users.’