Cambridge finances 'a disaster bordering on farce'

Cambridge University must cast off its "old buffer" image immortalised by Tom Sharpe in Porterhouse Blue and embrace the hard-nosed world of modern finance if it is to avoid extinction, a damning report warns today.

The university has long been able to spend what it likes, thanks to its status as the richest university in the country, worth at least £400m more than Oxford.

Its wealth is estimated at £1.5bn for its colleges and £1.2bn for the central university. Members are offered generous subsidies, with low room rents and large travel grants for students while academics enjoy a range of perks including sumptuous feasts at High Table.

However, because of concerns that Cambridge could not account for its expenditure, a £9m accounting system was introduced 15 months ago after almost four years of planning. But an independent report commissioned by the university and published today says that the system has failed utterly.

"It is hard to imagine how Cambridge can steer itself financially though the year," warned Michael Shattock, former registrar of Warwick University and now a visiting professor at London University's Institute of Education, who wrote the report with Professor Anthony Finkelstein of University College London.

The report describes the financial review as an "unmitigated disaster" punctuated by moments of "high farce".

In one episode staff flew to California and back in 48 hours and spent "a morning, lunch and an afternoon" talking to staff at the California Institute of Technology in Pasadena about a computer system that was not yet live.

"Nothing whatever was learnt apart from the debilitating effects of flying to and from California," the report says. The incident is symptomatic of much wider problems at the university, it concludes.

An ingrained culture of "them" and "us" has set academics and administrators at loggerheads and made communication difficult.

Senior administrators are often denied college membership, which excludes them from many privileges enjoyed by academics as well as from the social and intellectual life of the university. Many dons still believe that Cambridge's academic excellence will excuse its poor management, the report says.

The university authorities had been alerted to the problems but had failed to take adequate action. Their lack of response "represents a serious indictment not just of the accounting systems but of the university's ability or willingness to take appropriate action to put matters right.

"There is perhaps a natural tendency in Cambridge to seek to rebuff criticism and to be reluctant to take on board doubts and warnings expressed from outside," it warns.

Dr Gillian Evans, a history lecturer and a former member of the university council, said that Cambridge should be ashamed of its abysmal performance and called on the Vice-chancellor, Sir Alec Broers, to explain why the problem was not addressed earlier.

"The truth is out about Cambridge. Far from being at the top of all league tables, it ought, from an administrative point of view, to be hanging its head in shame today," she said.

"We wasted a number of millions which would have brought a less rich and confident university to its knees. We are now haemorrhaging money to try to patch up the system and provide the extra long-term staffing it continues to demand. And this is only the presenting symptom of our systemic malaise."

Sir Alec, who worked at the international computer company IBM for 20 years, is expected to launch a modernising drive today which could sweep away some of the university's ancient democratic committees. In his annual October speech to the university's senate last month, Sir Alec attacked the management system as "abominable".

He said: "There is in Cambridge a circle of inter-related confusion as frustrating to the critics as it is to those striving to the best of their ability to make a system devised in earlier and easier days fit the pace and exigencies of the present day.

"We must be flexible and willing to change and to accept that there is a need to clarify our decision-making procedures."