News report by John Clare, education correspondent, The Times, 21/2/87
A novel solution to Oxford University's financial crisis has been proposed by a group of dons headed by Dr Graham Richards, senior tutor of Brasenose.
Their plan is to sell off not the colleges' silver but the next best thing, the Oxford University Press - founded 509 years ago, in the reign of Edward IV, and wholly owned by the university since. The idea was quietly floated in a letter [which follows] this week to the editor of the Oxford Magazine, a small-circulation house journal published, ironically, by the OUP. It is distributed free to the 2,000 members of congregation who alone have the power to sanction the proposal.
Under the headline, "A simple solution", Dr Richards points out that the university is facing an annual deficit of £10 million. The response so far has been to cut costs, he says, "even to the extent of seriously weakening the system". He therefore proposes turning the OUP into a public company and selling off 49 per cent. His "educated guess" is that that would raise between £100 million and £150 million, sufficient to produce an endowment equivalent to the cuts imposed by the University Grants Committee. "This is not exactly selling the family silver", he says. "With 51 per cent, the university would still control the Press and could ensure that its scholarly activities continued."
The scholarly activities include publishing the Oxford English Dictionary and a regular flow of obscure academic monographs. However, the OUP also has a turnover of around £80 million a year and makes an undisclosed profit which it prefers to call a surplus. Dr Richards concedes that the plan is controversial, but he emphasizes that it is serious and has a lot of support among dons.
However, it was certainly not welcomed by Professor Roger Elliott, chairman of the OUP finance committee. He said that it would "destroy a unique institution" and talked of "asset strippers" whose only interest would be in maximizing profits. Other dons, who asked not to be named, speculated yesterday that the plan could become an issue in the forthcomiong election of a chancellor to succeed the late Earl of Stockton. Lord Blake, the provost of Queen's College and one of the candidates, said that selling off the Press was a "totally novel" idea and would require a lot of thought. He said that he would not dismiss it out of hand.
Sir - The University is in financial trouble with an annual deficit of perhaps £10 million looming. The response so far has been to cut costs, even to the extent of seriously weakening the system. There is an alternative simple, one-step solution which could obviate the need for cuts and bring other benefits to Oxford. The University should sell 49 per cent of Oxford University Press.
This is not exactly selling the family silver since with 51 per cent the University would still control the Press and could ensure that the scholarly activities of the Clarendon Press continued. The immediate financial return would be in the region of £100 - £150 million; enough to provide an endowment sufficient to replace losses from the UGC. In addition the University would receive 51 per cent of the subsequent dividends paid out by the public company; a much neater way of arranging financial relations between the Press and the University than the present system.
The Press too might gain from having a board of directors on which the University nominated a majority rather than having delegates who are very much part-time and normally very active in fields other than publishing. Such a change might even be welcome to some of the livelier spirits within the Press.
The suggestion is not novel. It has been mooted several times in the past, including on one occasion by the present writer. On that occasion he became more involved in the Press as a consultant; questions were not asked in Congregation, and he was convinced by the argument that the special advantage to the OUP of being part of the University and thus enjoying tax advantages associated with a charitable body made a sell-off unwise.
The situation has now changed. Not only is the money needed more, and the Press more efficient and more saleable, but there does not seem to be the same tax disincentive. Recently the trustees of the Wellcome Foundation sold off, by means of a share flotation, a part of Wellcome Pharmaceuticals. This seems to have been a great success for all concerned: the trustees have more money to spend on medical research; the company has capital for investment; the employees have benefited from owning shares in their business, and the investing public has had a good return on money being put to use in the public good.
In this simple way the financial position of the University could be transformed with no perceptible loss.
Yours sincerely,
W. G. RICHARDS,
Senior Tutor of Brasenose and Chairman of the University and Industry Committee.
Click for OUP's response to this proposal (27/2/87).