The Telegraph
Since 1st March, 1999
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Cambridge in debt trouble

London, Oct. 13: An over-ambitious and piecemeal building programme at Cambridge University has plunged it into record debt with students likely to be charged an extra £4,000 each a year to meet the costs.

A report by accounting watchdogs at the university has said that £550 million is being spent on new buildings which the departments may not have the resources to equip or staff because of “insufficient investment analysis”.

The expansion has resulted in an annual record deficit of £12 million and the report gives a warning that such costs will not be met by philanthropic donations “nor by the extra income created by the activities within these new buildings”.

“Not all elements of the building programme form part of an explicit strategic plan and the consequences of such growth have not been fully thought through,” states the university’s Board of Scrutiny, which examines the institution’s accounts. It says that the consequence of the reckless building plans could be “dilapidated premises, outdated laboratories and under-occupied buildings on the one hand and an empty piggy bank on the other”.

Senior members of the university staff are now expressing concern that the debts created by the £550-million building programme — the largest in the university’s history — will be offset by raising student tuition fees.

“It’s utterly scandalous. Students and staff are being short-changed as a consequence of the waste of money on this empire-building,” said Gillian Evans, a lecturer at Cambridge and former member of its governing council. “It seems wholly unacceptable for a university which, through its own fault, has incurred enormous deficit through mad empire-building to expect students from ordinary homes to bail them out.”

In July, Andrew Reed, the university’s director of finance, said that introducing top-up fees of around £4,000 per annum would be “one way” of tackling Cambridge’s “unsustainable” debts, raising up to £72 million a year. However, it was not revealed at the time why it was in such financial difficulties.

“We have put up these buildings and there’s not enough money to maintain them,” said Stephen Cowley, a member of the Board of Scrutiny. “We decided to build when there was money and we haven’t thought through how we are going to follow through.” There are further problems at Marconi, the loss-making telecoms company, which is now expected to withdraw the £40 million it had pledged for a research centre.

Other building developments underway include a £37.7 million university sports centre in west Cambridge, an £11 million multi-storey car park, a six-phase expansion of the university library and a £1.1 million refurbishment of the ADC Theatre, the university playhouse. A £14 million Faculty of English building project was underway even before it gained approval from the university’s governing body.

A senior university official said: “Each project is approved on a first-come, first-served basis. A lot of this is to do with who shouts loudest as opposed to having an overall strategic plan as to where the university is going.” David Adamson, the director of the university’s estate management and building service, said: “The weight of physical expansion needs to be supported by income stream and the government is not paying.”

Any hike in tuition fees to counter the deficit is likely to meet substantial opposition from students. Paul Lewis, the president of the Cambridge University Students’ Union, said: “It’s not acceptable that our 18,000 students should foot the bill when the university is culpable.”

A spokesman for the university insisted that the building programme was under control. “We do our fund-raising after a feasibility test and there is minimal cost outlay.”

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