Vice-Chancellor's Oration 2002

Supplement (2) to Gazette No. 4634

Wednesday, 16 October 2002

VICE-CHANCELLOR'S ORATION

8 October 2002

The end of this academic year marks another milestone in the evolving history of this University, though one perhaps not so immediately obvious in our daily work as have been recent changes in our institutional structure. I refer to the reform of the University's statutes and regulations. For the parts that require it, the new texts have received the Royal Assent and, while a few regulations still need to pass in front of Congregation over the next months, essentially the new formulation now comes into effect. This is the fruit of a working party consisting of Mr Derek Wood (the outgoing Principal of St Hugh's), the Master of St Cross, and Professor Mark Freedland. I do not think that the others would demur if I say that the principal burden of revision has fallen upon Mr Wood, ably assisted by Mr David Hall from the University Offices. The University owes them a considerable debt of gratitude, for indeed it has been a major and heavy task.

We may measure that task if we remember that never before in its history has the University replaced the whole of its existing legislation by a new code in one step. Throughout its existence, the University's rules have tended to be composed of an accretion of decisions and amendments, into which periodic bouts of reform have intervened---thus, the Laudian Code in the 1630s, Acts of Parliament in 1854, 1877, and 1923, and the Franks Commission in the 1960s. Of course, our statutes had by no means reached the condition in which Archbishop Laud found them on his election as Chancellor in 1630, when, as Mr Wood puts it, they had `fallen into an unco-ordinated if not chaotic state'. It is true nonetheless that they were complex and in places contradictory, written at some points in opaque language, often not easy to use, curiously organised, and strangely heterogeneous in subject matter.

Only on a limited (though significant) number of matters have Mr Wood and his colleagues been brought to ask Council to place before Congregation legislation that is new in principle and practice. For the most part, their work has involved enormous clarification and reorganisation. This has been necessary, first, to express clearly the new organisational structure of the University rather than simply inserting these innovations into existing text as yet another accretion. Second, they have recognised the need to limit the matter that is properly contained in statute to those elements that express and protect our core function and independence, as well as to those parts of our structure and institutions to whose modification we ought ourselves to proceed only collectively with great formal care. Other matters are now contained in regulations---whether Council Regulations or Divisional Regulations---and in this way become more amenable to expeditious adjustment as need requires. So, the former Statutes, Decrees and Regulations becomes Statutes and Regulations. Most especially, however, we must welcome the conciseness and logical construction of the new texts, which will make life easier for everyone, particularly in the transparency of their language. During the coming year, we shall proceed in a second stage to revise the `Grey Book' in order to make its contents more readily accessible--- possibly, with appropriate safeguards, by disaggregating much of it into subject-specific publications that junior and senior members alike would probably find more useful. This will complete Mr Wood's work and I am grateful to him for agreeing to take on this last step in his retirement.

There is, I think, only one matter on which the new statutes and regulations effect a major change in substance. That concerns the disciplinary powers of the Proctors. The Proctors hold an ancient office, dating from the early thirteenth century, and their powers of discipline stretch well back into our history. The Vice-Chancellor is a relative newcomer, since his position was not firmly in place before the mid-sixteenth century---indeed, a hundred years later than the office of Registrar. However, it has become increasingly apparent that Proctors' discipline is quite vulnerable from current points of view of legislation and legal practice, especially the Human Rights Act. All the legal advice we have received from within and without the University agrees that it is vulnerable because it is a system where the prosecutor is also the judge. Such systems of discipline or judgement about student conduct or other areas of dispute in Higher Education are, indeed, generally matters of current public concern. Congregation has accepted a new structure proposed by Mr Wood, in which, other than for low-level matters and with the agreement of the junior member concerned, the functions of prosecutor and judge have been separated. We will have a Court of Summary Jurisdiction, a Disciplinary Court, and a University Appeal Court.

There is no doubt that many of us among the senior members of the University regret the passing of the Proctors' Court and its summary justice. It is not so much that it is ancient and has served us quite well over the years; it is more perhaps that, in a period of change and invasive external scrutiny, it seems emblematic of an easier time when we saw the bonds of the self-governing academic community strengthened by mutual acquiescence in a rather rough-and-ready but quick judgement by fair-minded representatives of the academy. It is not clear, however, whether all those who experienced it quite saw it that way; it is debatable whether the premises on which such a vision was grounded are adequate for contemporary society in a university; and our advice makes clear that there are serious risks if the procedure comes to be challenged.

It is important to stress two things here, however. First, the Proctors are not removed entirely from the regulation of behaviour---they simply lose the power to judge on the matters into which they enquire. Second, the Proctors retain wholly unimpaired their important power to scrutinise the conduct of the business of the University by their presence at whatever committees they choose to join. I do not think that their function has been significantly diminished.

This is not the only area in which we have had to look at ourselves in the light of legislation this year. In the inelegant language of legislation and ministerial documents, we are now required to `mainstream' in matters of racial and other discrimination: that is to say, we are required to embed awareness of---and procedures to address---discrimination within the institution's core activities and strategic thinking. It is important that we should not view this as simply another administrative burden with additional transaction costs at a time of financial shortage (though it is certainly that) nor wearily comply because of the penalties. The principles upon which a university rests should lead us to resist and remedy explicit or implicit discrimination. Our business is to seek to understand that which is not understood, to recognise and study the great diversity of humankind, to identify what is universal in our world and in ourselves whilst enquiring without prejudice into what is local and specific, and to celebrate the extraordinary creativity of the human mind in all its different cultural expressions. Academics fail their profession if they anathematise whole categories of people for the misdeeds of some individuals or of their government, or else thoughtlessly speak with contempt about persons or groups on the basis of their race, religion, or sex. At the same time, the business of a university is also to provide opportunity to those with the talent and the preparation to take advantage of the learning facilities. We do need to provide a context as unfettered as we can reasonably make it for those coping with particular disabilities.

I say this to give context to the implementation, first, of the Race Relations (Amendment) Act 2000. It is now in force for public authorities (including the collegiate University) which must now, in carrying out their functions, have due regard for the need to eliminate unlawful discrimination, to promote equality of opportunity, and to promote good relations between people of different racial groups. We have prepared a Race Equality Policy and an Action Plan for implementation, as required. These are available on the University's Web site and soon also in the Gazette. Furthermore, to meet the requirement for `mainstreaming', Council has established a Race Equality Project Group, under the chairmanship of the Pro-Vice-Chancellor (Academic).

In the second place, you will also be hearing more about SENDA---the Special Educational Needs and Disability Act (2001). This makes it unlawful for educational institutions to discriminate against disabled students, both in the institution's admission, exclusion or suspension arrangements and in the services the institution provides to students. The Assessor has produced a helpful guide for lecturers and tutors on the legislation and there will be support from the Equal Opportunities Unit.

As I review the past year, I see plenty of evidence of the University's continued vitality. We have had our usual formal openings of new buildings in the University and the colleges. In the case of the University, the new Economics building at the St Cross site was formally opened, as was the Peter Medawar Building for Pathogen Research in South Parks Road. The new Portugese Studies Centre opened its doors in Littlegate House, where also the History of Art Department celebrated its relocation in much improved (and creatively decorated) offices. The Saïd Business School building was also finally formally opened (several times, it seemed to me). Sir Edward George at the Economics building courted controversy only to the small extent of pointing out how many Oxford economists were working in the Bank of England. However, Mr Romano Prodi (President of the European Commission) managed to situate the Saïd Business School at the centre of the controversy over Britain and Europe. Since both views were expressed on that day in Oxford, we have every chance of remaining the home of lost causes. We should also express our great gratitude to Mr Nelson Mandela, who came a few days earlier from South Africa specifically in order to open the large lecture theatre named after him in that building, and who gave an inspiring speech on globalisation and the developing world. Indeed, in this context I should perhaps salute the establishment of the Rhodes--Mandela Trust, since the Rhodes Trust has for a century now been so central to the student life and academic health of the collegiate University. We can hope that this initiative, brought to fruition by the single-minded efforts of the Warden of Rhodes House, may contribute to the University's relations with South Africa. Moreover, the University certainly looks forward to joining the celebration of the Rhodes Trust Centenary in Oxford in the coming year.

It is also gratifying to report on the personal and research successes of colleagues, a good number of whom were elected to Fellowships of the British Academy, Royal Society and other prestigious academies and societies, as well as others who gained national and international prizes or were publicly recognised in other ways. More particularly, I would emphasise first this year the range of research success in the Humanities and Social Sciences. I mention a few in particular, though I do not thereby mean to diminish the success of those to whom I do not refer. Several initiatives have received generous funding from the Mellon Foundation, which is testimony to the quality of these programmes. Among them are the Centre for the Study of Ancient Documents and the Voltaire Foundation, whose grants are for the creation of electronic databases and Web sites and reflect the richness of the collections and the ambition of the enterprises. Similarly, the Arts and Humanities Research Board has given a large grant to colleagues in the Faculty of English for the study of the language and literature of Old English in the ninth century. The first Sawyer Seminar ever to have been funded outside the United States has been awarded to a multidisciplinary group in the Social Sciences for a programme on the theory and politics of civil society. The Leverhulme Trust has given a considerable sum to support major new interdisciplinary developments in the study of China. The Refugee Studies Centre has received further sizeable grants and the Economic and Social Research Council has funded a new Centre for Migration, Policy and Society in the School of Anthropology.

I may extend this list, I hope, by referring to other activities in the same general area. I welcome the opening of the new centre for the conservation of books and manuscripts by the seven colleges in the Oxford Conservation Consortium. It is gratifying also to note the purchase by the Bodleian Library, after fund-raising, of the original score of Mendelssohn's Hebrides Overture and an astonishingly early Arab map of parts of the Mediterranean. These constitute a birthday present, so to speak, for the 400th anniversary of the founding of the Library, of which I shall doubtless speak at greater length next year. Similarly, the Oxford University Press created the largest on-line dictionary and reference collection and one of its long-distance projects, the Oxford Dictionary of National Biography, has been completed though not yet published (and I shall reserve that for another occasion also). Finally, among the new teaching initiatives, I mention only the courses for Chinese regional administrators which are being developed by the Department for Continuing Education.

I have chosen this year to put some emphasis on the Humanities and the Social Sciences because these parts of the University have had either no or relatively little access to the kind of funding opportunities which have been created nationally for the sciences. It is important to recognise here that, although the direction and rhetoric of public policy has in recent years concentrated on the importance of science and technology, these other disciplines remain a substantial and central element in the success of this University. I shall revert to this theme later.

However, these considerations should not lead me to ignore the sciences. Here again we have seen this year continued evidence of new projects and of new spin-out initiatives through Isis Innovation. Again, I choose only a few examples. Oxford was selected as the site of one of six Genetics Knowledge Parks with funding from the Department of Health and the DTI. The MRC has established here a protein production facility, which is an essential step in the next stages of benefiting from the Human Genome success. In the same area, a group has announced the discovery of a gene for speech and language and another has revealed new genetic approaches to malaria. Other groups have made published progress or received large grants in TB diagnostics, in clinical trials concerning cholesterol and heart disease, myeloma cancers, leukaemia, bioinformatics, the production of a new vaccine for Meningitis C, the foreign language syndrome in stroke victims, ion channels, the integrative physiology of common metabolic disease, and so on. A new Centre for Computational Research was established. The new e-Science Centre has been rapidly successful in establishing projects on the e-grid, particularly with the e-Diamond project for data groups in breast cancer and the Dynamic Brain Atlas. The worldwide screen-saver initiative launched from the Chemistry Department concluded this year with 3.5 billion molecules reviewed against two protein targets for cancer research. Pleased with this success, the Department immediately launched another programme on anthrax and delivered results on 300,000 molecules in four weeks. Elsewhere, we should welcome the partnership between the Medical Sciences Division and the US National Institutes of Health which enables some young American graduates to further their graduate education in Oxford. Finally, among the new spin-outs, I note particularly the arrival of the aptly-named Spinox, for the development of high performance fibres based on the analysis of spiders' webs.

Across the board, therefore, the University's research effort continues to be energetic and creative. Indeed, the University remains the largest earner of research income among universities in the United Kingdom.

I do not always make sufficient mention in the Oration of the activities of students in the University and I should repair that omission this year. The first overseas students supported by the Clarendon Fund have been with us this year and it is evident that that initiative contributes significantly to bringing students of exceptional quality to Oxford. The growing awareness of this Fund may be one reason why the number of overseas applicants for graduate places has increased markedly this year; another reason may be the impact of 11 September on recruitment to US universities. The range of achievements of our students is considerable. I note, for example, that for the second year running one of our students has won the Science Graduate of the Year Award. Another won the BBC's Test the Nation. Our students have participated this year in seven scientific expeditions under the auspices of the Royal Geographical Society and another student has been among the six-person crew, chosen worldwide, to work in an Arctic research station to study conditions for astronauts on Mars. I should also mention here Hugh Wright, who received this year the Royal Humane Society's silver medal for his efforts at the time of the rowing tragedy in Spain eighteen months ago.

In a more collective vein, I hope that I may be allowed to salute in passing Somerville College's victory in the light-heartedly serious iconic television that is University Challenge---after all, it does suggest at least that there are more quick wits in a small Oxford college than in some much larger institutions. Equally, I should congratulate the victorious teams in our traditional Varsity matches and, first among them this year, the rowers with their famous victory in the Boat Race, exemplary of the sort of qualities that lie beneath high-level achievement in sport and academic work alike. Indeed, Oxford gained a record clean sweep on all eight rowing races this year. The future of University rowing has been much enhanced by the covenanted use in perpetuity of the national training facility being developed in South Oxfordshire. I note also a record winning time in the Cross-Channel swimming relay and a bronze medal in the European basketball championship. Finally, I must not forget to mention the opening of the Marston Sports Centre for Women. This is an important step in the provision of equality for women's sport in the University.

The climate within which the University operates continued to be difficult this year and it seems likely to remain so, for the short term at least. These difficulties are fundamentally two-fold: first, the uncertainties of government policy (in matters outside the support of science research) and, second, the issues of funding. I have spoken at length in previous Orations about both of these elements. There is little to be gained by repeating much of what I have said before, except to regret that it remains as pertinent today as it was then. Government policy and funding issues are of course intimately connected for us in the sense that the block grant accounts for slightly more than 30 per cent of this University's annual income and is therefore still a significant element in our annual operating budget. I have to say that it is quite extraordinary that in the month of October English universities still do not know what their allocations will be for the year 2003--4, let alone beyond that. Within six months, universities will be well into establishing budgets for that year, budgets that are set within longer strategies.

During the summer vacation, it was announced that the Department for Education and Skills would publish in the autumn a document laying out its vision for the future of Higher Education. The status of this document has been somewhat unstable---spoken of sometimes as a White Paper, sometimes as a Green Paper, sometimes as a strategy document. We have very little idea of what it will contain and we would be unwise to accord more credit to rumours---even detailed ones---than they merit. We do not know what processes of consultation or elaboration are implied. Presumably, whether it is to be a White Paper or not will depend upon whether primary legislation will be required. We had been expecting this publication in late October or in November, but some newspaper reports are now suggesting that it will be delayed into December. Indeed, this document comes as part of a general series of reviews of the directions, instruments, and agencies developed in post-Dearing Higher Education. It does appear that this may well be a significant moment in Higher Education in England. We look forward to it with the greatest interest.

In this situation, I think it important to discuss here a number of matters, which either have gained emphasis during this year or need to be recalled as essential context. The University remains very aware of the issue of access. The commitment to recruiting the most able and properly equipped students without reference to their background is, as I have said before, central to the success of our mission as we see it, irrespective of whatever external policies may be. We have continued to improve the capacity to make Oxford understandable and accessible to potential applicants. In this context, I draw attention to the opening this year of our Admissions shop-front in St Giles'. The coming academic year sees the first holders of Oxford Bursaries come into residence. Moreover, the Admissions Executive begins this new year by circulating proposals improving yet further the effective transparency and fairness of our admissions procedures. I hope that colleagues will see merit in these proposals which do, it seems to me, reinforce a reality of fair access. At the same time, I do reiterate that academics must remain the judge of the academic potential of applicants. It is academic potential, supported by a sufficient educational preparation, which is the only proper basis for rigorous undergraduate study. The events in this summer's national examinations demonstrate again how important it is for such decisions to be made by us on the basis of a range of appropriate evidence.

At the same time, we must realise the importance that Government accords to its larger objective of including in Higher Education 50 per cent of the age cohort of 18--30-year-olds by the year 2010. The current level is somewhat over 40 per cent. We must understand that, whatever else is in the document that the DfES publishes later this year, there will be no retreat from this commitment. What are the implications for this University? I do not think that there is any expectation that we should increase our undergraduate numbers. Without question, the size of the University is ours to decide. However, I do believe that we should participate in raising aspirations and opportunity in our region and in the nation more broadly, as part of our commitment to the value of education. For the region, this is what I am doing as chairman of the committee which brings together the higher education institutions, further education colleges, and schools in Oxfordshire, Buckinghamshire and Milton Keynes under the Partnership for Progression initiative launched by HEFCE this year. However, it does seem to me that there is also an important role to be played in bringing to schoolchildren a sense of the pleasures of learning and hence an aspiration to participate in it. Colleagues, graduates, and undergraduates do engage in a range of activities with and in schools. I am sure that this is important for the University as a whole. I also note with pleasure the variety of outreach schemes that have taken place this year---for instance, the science writing competition, the `bug hunt', `wild art', the Oxford Language Race, and other activities in the European Day of Languages, the Tower Poetry Prize, and the Science Engineering Ambassadors Scheme in collaboration with the Oxford Trust. In particular, I should commend our museums for all that they have been doing for outreach---the University Museum of Natural History has doubled the number of its visitors since 1994, for example.

The 50 per cent target does, however, highlight with added emphasis three issues or trends in the current Higher Education landscape. The first of these is the growing reality of diversity and differentiation within the sector and the tension between this reality and some of the ways in which the sector sees itself. There can be no doubt that the attainment of 50 per cent participation involves both expansion and a pattern of different institutions concentrating primarily on different activities. This year HEFCE has presented its outline thinking about the sector. It foresees that all universities will engage in a defined level of research, teaching, knowledge transfer, and social inclusion, but that each will then choose its profile through added emphasis in one or more of those activities and be funded accordingly. This is a bold, clean plan for orderly institutional diversity; but it depends crucially upon adequate funding, if it is to have any serious reality. Without that, individual universities will have to take their own difficult but necessary decisions about the ways in which they can support and enhance their distinctive purposes.

It does seem to me that the pursuit of the 50 per cent target will further emphasise a second already discernable trend: the regionalisation of Higher Education. Almost by definition, previously non-studying social groups will study locally either by choice or by necessity. This is likely to accentuate the regional identity that has appeared in some parts of England, with signs of a reluctance among numbers of potential students to travel far for university study. Regional policies in other domains have doubtless contributed towards this phenomenon. Indeed, one policy option open to Government is to route more money for educational purposes through the Regional Assemblies and Development Agencies, though how far this could go is very unclear. All of this is a potential challenge to our vocation to be a national university (as well as international). I have no doubt that a useful by-product of the access initiatives started by many colleges in different parts of the country has been to begin to address the issue of the national distribution of our student body.

Third, it does appear to me that the substantial diffusion of a first degree among the population must lead to its devaluation as a differentiator of quality and qualification in the public mind. I do not think that differences between various kinds of diploma (foundation degrees, etc.) will alter that perception much. Of course, much will continue to depend upon what businesses call `brand' and one can expect employers to look to that more than anything. This emphasises for us the absolute importance of protecting the quality of our degree. Nonetheless, we can expect increasing and perhaps debilitating debate about the general fitness of one university's degree as compared with the particular appropriateness of another university's course. There is already evidence in this country that the growth in the numbers of university graduates with first degrees is leading to a need to seek a further degree as a form of differentiation. Certainly, this is the case in the United States, while some of those thinking about the consequences of the Bologna process in continental Europe speak in these terms. Furthermore, it does seem to me that the regions of the world from which we expect to recruit appropriately educated overseas students do now by and large possess universities capable of providing good undergraduate education at a reasonable cost. Such students are likely to come more and more to seek further degrees and special skills---in other words, to differentiate themselves. I hope that in the context of the general academic strategy, which must be completed this year, we shall be able to consider carefully how we could conceive our teaching provision as an integrated whole, including both undergraduates and taught postgraduates, the Master's courses as well as the Bachelor's. I think that the increasing pressure from research councils for larger taught elements in postgraduate research degrees leads in the same direction.

Above all, however, the questions raised by the 50 per cent target are financial. HEFCE has made clear that there are huge additional financial burdens in this policy, whether in pay and personnel or in facilities and infrastructure---whatever the model used to deliver the outcome. What effect that will have upon funding for the Higher Education sector as it currently stands and how it will be distributed within it are matters not just of interest but of concern. More particularly, we here must be concerned at how the 50 per cent inclusion target is to be reconciled financially with the Government's equally firmly held objective of supporting world-class universities. I put this question in my Oration last year and I do not yet know the answer in full.

Of course, we do know the answer in part. What we do not know is how much of the 2002 Spending Review's additional increase of 6 per cent for the DfES in real terms for each of the next three years will go to Higher Education. We do know, however, that the science allocation will increase by ?1.25 billion over the next three years, an average of 10 per cent in real terms year-on-year through the Office of Science and Technology budget. For those funded through the OST, therefore, there is the prospect of welcome increased investment, though on a competitive basis. Nonetheless, it is important to bear in mind that this additional funding is significantly weighted towards the end of the three-year period and the year 2003--4 will remain rather sparse. More generally, we do not expect that the RAE rewards for other than 5* will return fully to the financial weightings of the previous situation until 2004-5. There will be a further SRIF scheme but we shall still have to find a contribution, though this time a lesser but not negligible sum of 10 per cent. Finally, there are significant initiatives attached to the Roberts Report and our science divisions will have to determine speedily how they respond to them.

It would be churlish not to welcome and recognise the investment made in science again by this new Spending Review. There is no doubt that the Government has recognised and acted upon the need to support the costs of good quality university science research in the way that numbers of governments elsewhere in the world have not. Our science divisions and departments have an opportunity to seize during these three years. Indeed, inasmuch as the ESRC is within the OST, the social sciences ought to see benefit also. Nonetheless, all the language used about these sums in the Spending Review has resolutely referred to `Science'. This expenditure forms part of the Government's policy to support excellent science above all. This derives from its perception that the knowledge economy is essentially the product of science, and that prosperity and success in global competition now depend upon having innovative science.

The humanities are not of course totally without research support. The AHRB, originally established by HEFCE, exists and the proposal this year to transform it into a UK-wide research council has received broad support. If this support can be converted into legislation, the new council is likely to be lodged with the OST. We may hope that it would in that case benefit in the next Spending Review. Current circumstances, however, do not favour humanities research. I believe that the current exclusiveness of policy emphasis on science research is wrong-headed. I believe that the present studied neglect of funding for the humanities is damaging to the general health of universities and ultimately detrimental to the attainment of the Government's objective to put universities at the heart of a stable and prosperous society. It is damaging to universities because they are not composed like an archipelago of subjects, in which each is `an island unto himself'. It is the common purpose across disciplines (and a great university is distinguished by covering almost the whole disciplinary waterfront) that binds the enterprise together in the shared and mutually sustaining urge towards creativity and innovation. Moreover, the prosperity of the knowledge society is not to be acquired simply by whipping on science and technology. It will depend upon bringing through our universities young people who learn there independence of judgement, confidence in their own intellectual ability to make informed decisions, the capacity to scrutinise evidence for meaning, the ability to distinguish the true from the merely apparently true, and the habits of creative thought and action. The specific skills of university science education cannot be dissociated in value from these general skills acquired throughout the university, as the Far East demonstrates. Indeed, a general culture of creativity and willingness to innovate is at least as important to a successful society as the accelerated flow of innovation in commodities. Finally, societies are diminished---on occasion to the point of perishing---when they do not recognise the inheritance of knowledge and understanding built up over centuries. What impoverishment of culture, what weakness of purpose, what shallowness of principle, what capriciousness of action attend a society that holds cheap the understanding of human complexity and disregards the hard-wrought bases of civilisation. Have we not learned even this from the last century?

Financially, this has been a hard year. Divisions and departments have been asked to make significant economies. Difficult decisions have had to be made. There is no doubt that these have hurt, more particularly so in some areas where structural imbalance is more readily visible. No doubt, too, it is hard to move to a structure of devolved academic decision-making and management of resource only to find that these tools need to be used to make economies. There is not much comfort to be gained from the knowledge that some other research-intensive universities are having just as difficult a passage, or more so. Nonetheless, we should take some comfort from the fact that spending units have performed well and the year's out-turn is by and large on budget. This is not a minor achievement by all concerned. Moreover, it is clear that prudence has produced an increase in divisional and departmental balances in aggregate, though not in every individual case. I see clear evidence also that a number of departments are beginning to use the possibilities that the new structure affords them and to look more carefully at how to act upon the non-formula part of the resource allocation method.

Nonetheless, Council has been very conscious of the need to help divisions and services to undertake significant reorganisation or new initiatives, which would reduce recurrent costs or increase recurrent income in such a way as to enable greater financial equilibrium without loss of major activity. Council has been conscious that such moves could require investment which would be beyond the financial capacity of the units concerned. It has also seen the need to take a decisive step. It has therefore established a Restructuring and Investment Fund which will make available up to approximately ?40 million from the Capital Fund for this purpose. Despite the seriousness of depleting the capital reserve (though this sum is manageable), Council believes that this is necessary in order to sustain a firm policy of returning to balance. It follows, therefore, that Council will not make an investment for which a clear financial return as well as a sound academic case cannot be demonstrated over a tight timetable ending in July 2007. It is essential that the appraisal of proposals be extremely rigorous. The fund will be administered by a small central body chaired by the Vice-Chancellor. There is no commitment to spend the whole fund, if appropriate and compelling proposals are not forthcoming. At the same time, after consultation with all parties, Council has authorised a new round of OMIS which will be more focused and flexible than the previous one. Finally, it is very necessary that the University continue to improve its information systems. We must have as clear a view as possible of the condition, structure, and activity of our finances, necessarily complex in a large and diverse institution like this one. This is essential because, apart from helping to focus activity more clearly, the proper management of resources does reduce costs and does save money in ways that do not impinge on academic activity. We have delayed the implementation of the new financial management system, OSIRIS, by another six months in order to give everyone involved (from the centre to the departments) the best possible opportunity to understand and adapt to it. I do urge everyone to understand how important it is for the continued health of the whole body of the University that we convert to this system without reservation, even if from time to time there is the loss (I hope only temporary) of some favourite local functionality.

All these elements of a proactive policy are necessary because we can see a continuing though manageable short-fall in the operating budget for the financial year now under way. I must stress at once that the budgeted out-turn is not comparable to that mentioned in some other parts of the sector. However, it does need to be addressed by the actions which Council has decided and which I have laid out. Certainly, this financial year has to bear some new external pressures---the increase in National Insurance contributions from the last Budget, the effect of the downturn in the financial markets, and increased salaries over budget due to the hidden costs of a settlement designed to simplify the grade structure, for example. However, I do believe that the root cause of difficulty is plain enough. The percentage of the age cohort being educated in the university sector has moved from about 15 per cent in the mid-1980s to a little more than 40 per cent now. During the same period, the unit of resource has fallen by about 38 per cent (and that is the last phase of a much longer and deeper downward curve). In the United States, spending per student has doubled since the 1970s, in the United Kingdom it has dropped by over half. Currently, the total expenditure on tertiary education in the United States as a percentage of GDP is double that in the United Kingdom; private expenditure there is about five times greater than here in these terms; and even public expenditure is higher. In all three, the United Kingdom under-performs the OECD average. In crude terms, productivity has grown in the United Kingdom, but in real terms this has been bought by declining staff-student ratios and declining relative salaries. The general structural deficit in the sector has been described by the Transparency Review and again by the Universities-UK submission to the Spending Review.

In all the current statistics about Higher Education, the most interesting ones for us are the international comparisons. We should not be shy of saying that we are a great university with a formidable reputation. Our benchmarks are international and it is to those that we should pay attention. In previous Orations, I have laid out the broad outline of what I perceive to be the requirement for this University to match its international comparisons in the future. That future is quite close and the figures that I have quoted today do not make the weight. So, it will be with particular interest that we shall read the vision for the next ten years when the White Paper or strategy document appears. We are likely to face difficult decisions.

Finally, I must now turn to the changes which this season always brings. I begin by recording the gratitude which I myself in particular and the University in general owe to Dr Glenn Black, who steps down as Pro-Vice-Chancellor (Academic). Dr Black has served the University with considerable distinction over quite a number of years---first as Proctor, then in an unusually long tenure as Chairman of the General Board, and finally as Pro-Vice-Chancellor. I have worked with him during most of my time as Vice-Chancellor-elect and Vice-Chancellor. So, it will be understandable if I say that, while I wish him all possible pleasure in his desired return to full teaching and research, I am only comforted in his departure by the knowledge that in Dr Bill Macmillan we have an eminently competent successor.

It is, of course, always a pleasure to welcome new Heads of House: Professor Roger Cashmore will be arriving in Oxford in the new year to succeed Lord Windlesham as Principal of Brasenose; Dr Frances Lannon follows Sir Brian Fall as Principal of Lady Margaret Hall; Dr Diana Walford succeeds Professor David Marquand as Principal of Mansfield; Professor Roger Ainsworth replaces Sir Peter Williams as Master of St Catherine's; and Mr Andrew Dilnot follows Mr Derek Wood as Principal of St Hugh's.

Many eminent colleagues have retired this year, having served the University with distinction: Professor M.R. Ayers, Professor of Philosophy; Professor J. Campbell, Professor of Medieval History; Professor A. Cowey, Professor of Physiological Psychology; Dr G.J. Draper, Director of the Childhood Cancer Research Group; Professor P.J. Fo‰x, Nuffield Professor of Anaesthetics; Professor Sir John Grimley Evans, Professor of Clinical Geratology; Professor D.W. Howe, Rhodes Professor of American History; Professor J.D. Hunt, Professor of Materials Science; Professor K.A. McLauchlan, Professor of Chemistry; Professor F.G.B. Millar, Camden Professor of Ancient History; Professor C.M. Perrins, Head of the Edward Grey Institute for Field Ornithology; Dr B.J. Shepstone, Reader in Radiology and Head of Department of Radiology; Professor R.G. Swinburne, Nolloth Professor of the Philosophy of the Christian Religion; Professor C.F.H. Tapper, Professor of Law; and Professor C.E. Webb, Professor of Laser Physics.

This past year has also seen the retirement of colleagues who have retired from academic posts after long service to the University: Dr S.J.H. Ashcroft; Dr B. Buck; Dr E. Christiansen; Dr B.A. Coles; Mr J.L. Fuller; Dr M.T. Griffin; Mr R.F.S. Hamer; Dr J.D. Kenyon; Dr C.E. King; Dr D. N.E. Magee; Dr J.S. Meisami; Dr G. Smith; Dr W.A. Sutherland; and Mr N.G. Wilson.

Still others have retired who have held important research or administrative posts in the University: Mr G.R. Bellamy; Mr J.D. Brown; Miss S.M. Burdell; Mr R.I.H. Charlton; Mr C. Curran; Mr A.J. Flavell; Mrs M.V. Forrest; Dr M.A. Johnson; Mr A. Knight; Mrs E. Krishna; Miss C.L. Lee; Mr R.E. Mabro; Mr D.A. Miles; Dr P.R.S. Moorey; Mr C.D. Payne; Mr P. Rockett; Miss M. Sheldon-Williams; Mr W.J. Siertsema; Mr J.E. Stoy; Mr M.L. Turner; Mr M.R. Wells; and Mr M.J. Wilkinson.

This year, I record with sadness the names of those colleagues who died while still serving the University: Professor M.O.L. Bacharach, Professor of Economics; Dr G.P. Baker, CUF Lecturer in Philosophy; Mr L. Fong, Secretary to the Curators of the Oriental Institute; Dr R.W. Hiorns, University Lecturer in Statistics; and Dr D.R. Wing, Research Assistant in the Department of Biochemistry.

I wish also to record our gratitude for the lives and service of former colleagues who have died in retirement during the past year: Dr M.G. Adam; Dr J.M. Argyle; Dr A.E. Armstrong; Mr W.S. Barrett; Dr S. Bradbury; Dr C.J. Danby; Dr A.C. Day; Mr A. Fox; Mr G.P. Gladstone; Mr R. Goodwin; Dr G. Gordon; Professor R.M. Hare; Mr W. Hyde; Professor Sir Ewart Jones; Dr J.D. Lambert; Dr D.J. MacLeod; Dr G.B. Masefield; Mr D.E. Mosely; Mr B. Nicholas; Sir Dimitri Obolensky; Mr E.J.S. Parsons; Mrs M.E. Paul; Mrs J.M.C. Rhoades; Mr A.R. Robbins; Dr F. Seton; Miss M. Shearer; Mr R. Sprent; Dr A.M. Stewart; Dr D.A. Stokes; Mr S.C. Truelove; Dr N.A.C. Waugh; Dr T.C. Whitmore; Dr C.A. Wilkinson; and Mr J.F. Wright.