Over the years it has been the practice of many Universities to subsidise Halls of Residence catering centrally although this was not really allowable under the U.G.C. unless for the spending of University income. However, the U.G.C. has now decided to allow the practice and Durham University would therefore be able to subsidise the colleges to the extent of £66,000 next year. The maintenance fee, if it fell to the full extent allowed would then probably be less than elsewhere since the fee in those Universities where a subsidy has been made for some years will not fall. However, it would be desirable for Durham to move down the league table and this could be achieved if the subsidy was implemented, but this was in part offset by the withdrawal of money paid for maintenance of college roads etc.
It is obvious that the Maintenance Fee must be set to enable all colleges to break even (the fee being the same for all), but obviously those with better facilities could make more profit and then put more money into reserves. For this reason, the University decided to build the Sutton Site to make University and Hatfield more economic to run, (Hatfield could take over Bailey Court) and as their income will be higher through having more students, the Maintenance Fee can be kept down. However, one proposal is that students in the University should through the Maintenance Fee pay the outstanding amount on the Sutton Site. This would not be right since we would then be paying for the rectification of the University's inadequate resource provision.
Our proposals are set out below:
(1) The University should implement the catering subsidy on a per resident place basis for term time catering costs but this should not initially be at the rate of £23 per place. This is because the distribution of useful physical resources between colleges is now more equal, there is still some disparity between the amounts transferred to reserves, and an even greater one between the reserves held by each college.
On the economies of scale principle that costs do not increase in direct proportion to the number of places anyway, it would seem better to distribute the money according to an index-linked sliding scale, thus providing more benefit to the smaller colleges. The whole of the subsidy would therefore be implemented but not at an equal rate per place.
Since the maintenance fee must be set so as to enable the poorest college to survive this would have the beneficial effect of keeping down the maintenance fee overall.
(2) The provision of money for college minor works should be critically re-examined with the aim of partly offsetting the £56,000 additional expenditure resulting from (1).
(3) The relief in respect of catering management costs should be split between Dunelm and St. Cuth's both of which lack accommodation facilities from which to subsidise their catering.
(4) The accumulated deficit on University College should be met by the University since this results from a period when distribution of resources was less equal and it cannot be regarded as the responsibility of the student membership to subsidise this lack of provision from their grants.
(5) The special contribution to welfare services should be reduced if economies can be shown to render the full amount unnecessary but the remainder must continue unless the expenditure can be transferred to the Supervision Fee. If this does not happen, the cost of very necessary health facilities will fall on the Maintenance Fee.
(6) We do not feel that the loan charges on the Sutton Site should be distributred to the colleges for the following reasons.
(a) We agree that there is no ground for implementing the entire subsidy without some offsetting saving, but if this saving is to the extent of £6 per resident place for the Sutton Site plus the savings and minor works and college ancillary services, the effect could only be to put Durham further up the Maintenance Fee league table than at present with all the detrimental effects that this would have.
(b) If the charges are met by the colleges, the University will in 2002 own an asset for which it has not paid the economic cost.
(c) College buildings have in the past been part funded by the University without the necessity of interest charges falling on the membership and it would be arbitrary to decide to apportion the Sutton Site charge at this stage.
(d) This project ought to be seen as a part of that to equalise resources between operating units (University assets) yet by apportioning charges amongst the colleges, students are being asked to bear the cost of unequal resource provision, since before the Sutton Site was built the cost fell on them through the balancing scheme and would now do so through loan charges.
(e) The cut in University grant revenue has not been as great as expected.
(7) Since the Maintenance Fee must be set so as to enable the poorest college to both break even and establish reasonable reserve provision, this review must where necessary continue the University's policy of equalisation of assets so that the Maintenance Fee may be kept as low as is practicable.
Minor works programmes and the Sutton Site have ensured that the revenue earning potential of the colleges is now more equalised, but in the period whilst this was being achieved some colleges have been able to build up large reserves from a Maintenance Fee which simply allows others to break even. It is essential that this be rectified and the way to achieve this would be to use the 1976/77 catering subsidy to build up reserves at University and Hatfield Colleges. The cost of postponing the loan repayment on the Sutton Site would be small and this action would mean that the Maintenance Fee need not be set at the level which would be required to build up reserves in these colleges. University and Hatfield Colleges reserves could therefore be increased by the greater part of £56,000 (less the additional interest on the Sutton Site loan which would have to be defrayed around the Estate as a whole).
(8) DSU views with concern the present disparity in the level of college reserves, not only because of the effect on the maintenance fee, but since colleges with an excessive holding may with to indulge in projects of a purely sectional interest which will involve the University as a whole in unwarranted expense. With this in mind we ask the Committee to consider (in the light of a decision on the necessary level of reserves for each college) to consider whether any excess should be either frozen to ensure retention in the form of current assets, r distributed around the Estate through a capital account balancing scheme.
Conclusion:
Durham students have always accepted that they should bear part of the higher unit cost of a collegiate system of which they are proud to be part. However the Maintenance Fee (excepting this element) must compare with that elsewhere for the good of the individual student members and in the long term for the University as a whole. These proposals are a constructive attempt to achieve this without prejudicing University Finances.