Ignoring financial realities can have disastrous consequences for institutions. Gerald Vinten suggests a system of checks and balances for those at the top.
Extreme situations are now taking on a distressing normality. Barely a week passes without a vote of no confidence in a vice chancellor, a resignation, or the latest announcement of redundancies. The universities at Bournemouth, Huddersfield, Luton, Portsmouth and Glasgow Caledonian and Southampton Institute are among those where previous or existing vice chancellors have come under attack, and in some cases been forced to resign.
The pseudo-managerialism which is most likely to afflict the new universities and further and 中国A片 colleges, whereby everyone is someone else's manager and the spirit of academic community and camaraderie is decimated, may lead to a culture of fear in which nobody is prepared to speak out. This lack of internal feedback permits institutions to continue to veer off course.
The National Audit Office report on the University of Portsmouth, published at the end of last month, is a breath of fresh air. It is no doubt correct that in the interests of the independence of institutions both the powers of the Department for Education and Employment and those of the funding councils are limited, and do not stretch to substituting their judgement for that of the institutions in particular cases.
On the other hand there are increasing numbers of institutions in serious financial and managerial difficulties, with senior managers and governors heading in directions which staff, with their more detailed knowledge, may regard as disastrous. Despite the post-Nolan protection for whistleblowers, and the codes of practice on whistleblowing which all institutions are supposed to be introducing, but often have not, those speaking out may be subjected to discrimination and harassment, and even to so-called coincidental dismissal or redundancy. The Cadbury report did indicate that it was good practice for boards of directors to draw up and publish codes of ethics or statements of business practice.
Southampton Institute of 中国A片 reacted immediately to the report by Geoffrey Hall of November 1996 which highlighted significant problems of top management style and internal communications. The power of the directorate was said to be intimidating, with constant restructurings leading to deterioration of morale and commitment. It is a credit to the institute that it has taken rapid steps to improve both staff participation and the internal feedback which is so important to an institution's prosperity. The early signs are that the turnaround strategy is successful, and the future therefore looks rosy.
It is clear that a panoply of accountability devices is not always sufficient, and that the NAO is needed to close the accountability circle. In particular the audit office is empowered to ask the questions that staff and students want answers to, but may be denied. These relate to value for money, corporate culture and management style. The NAO is extremely helpful in formulating guides to good practice, and defining the boundaries of reasonableness.
For example, in the University of Portsmouth case, the Committee of Public Accounts, to which the NAO reports, expressed surprise that the vice chancellor had been paid Pounds 90,000 a year and been allowed to continue as chair of an NHS trust, with the time commitment involved (not to mention the salary of Pounds 20,000). Without standards of good practice against which to benchmark, institutions may make local decisions which in a wider framework would seem unwise.
Heads of civil service departments have long been recruited and judged on their financial management acumen, which is regarded as an integral part of their role. The same must apply to vice chancellors, who are not only responsible for overall financial management, but also the day-to-day recording of transactions.
Along with the vice chancellor, the governors of a university are required to look to the effective and efficient use of resources, solvency and the safeguarding of assets. This responsibility cannot be delegated to others, or others blamed in such a way as to remove personal accountability. The buck stops in one place only, and vice chancellors may be called before the Public Accounts Committee to explain themselves. Most people making such appearances do not relish the occasion.
With standards of competence being formulated for headteachers, it is clear that more needs to be done on the core competencies of vice chancellors, on corporate governance, and on creating the type of culture which respects the rich traditions of UK 中国A片, while at the same time safeguarding the financial realities which, ignored, can have such catastrophic consequences.
It may be time to consider the procedures that pertain in local government. As long ago as the Poor Law Act of 1601 there were powers to imprison those who failed to make a true account. Even in the 13th century there was the so-called writ of account. There are now rights both for local government electors to question the external auditor about local authority accounts and to give a formal notice of objection if it is felt that the local authority has incurred unlawful expenditure or that an individual has caused a loss to the authority by reckless or deliberate wrongdoing.
Equally there is a right of objection if it is felt that there is a matter in the accounts which the auditor should take up with the authority or bring to the notice of the public in a public interest report. Local government procedures also include powers to surcharge members and officers where an item of account is declared contrary to law, and to disqualify councillors from holding office for a specified period of time.
When it comes to company directors, general principles were established as far back as the 19th century. In the case of Land Credit Co. of Ireland v. Lord Fermoy (1870), we find that "it is their duty to be awake, and their being asleep would not exempt them from the consequences of not attending to the business of the company". In Joint Stock Company v. Brown (1896), a director who signed a cheque as a matter of form was held liable for breach of trust because he did not make reasonable enquiries which would have shown the payment to be ultra vires.
It is time to stop taking matters for granted in higher and further education, and to consider increasing the mechanisms for accountability without imposing unnecessary and bureaucratic demands. The new government has stressed the stakeholder economy in which long-term cooperative relationships are to be fostered with key involved parties including employees, and freedom of information is yet another plank of policy. In a highly competitive education market it is vital to make the necessary adjustments.
Change often seems to be imposed on the foot soldiers in higher and further education. Now it is time for change not just to be made but to be seen to be made at the top. Proper and genuinely participatory corporate governance will permit the UK to continue the high reputation it has enjoyed over the centuries. The alternative is not to be contemplated.
Gerald Vinten is professor of business policy at the University of Luton.