The property business is an odd world. One minute something’s worthless. The next it’s priceless. For example, we know that Imperial hopes it can raise £300m by flogging off protected countryside for commercial development and housing, and spawn a project worth £1billion (or £1.5billion depending on the day of the week). But how much did Imperial actually pay to ‘merge’ — i.e. take over — Wye College, all its many properties, and its 840-acre estate back in 2000?
Pick your answer from the choices below, then read on to find out what appears to be the truth.
1) £11.3m. 2) £5.1m 3) £2.5m 4) £830,000 5) A nominal £1 fee
Sorry, it was a trick question. The answer is: none of them. As some new Freedom of Information papers from Imperial itself released to us reveal, the costs of merging Wye and Imperial were actually £2.5m. But the colleges didn’t get the bill. Instead that was paid by the Higher Education Funding Council for England (HEFCE), and dumped straight into Imperial’s bank account in the form of a grant listed below.
So Imperial got Wye, which now appears to be worth a minimum of £300 million for part of its land portfolio alone, for free — thanks to the British tax payer.
Can it really be as simple as that? Wasn’t the college bleeding to death financially? Haven’t Imperial been forced to dig deep into their substantial coffers to keep everything going since? Well, no. Not really. Of late the finances may be more sticky, but the college of today, with its trickle of students and staff echoing inside an empty shell of an academic institution is nothing like the one Imperial took over. If you run down an institution it will cost you more in its dying years. And Wye College is dying on its feet.
Things were difficult before, but not near-terminal, as Imperial’s own records make clear. There is a general assumption that the old, independent Wye was on the verge of utter ruin when Imperial came along on some white charger. In truth, no-one should believe this old canard. If it were accurate, the gap between the start of ‘merger’ discussions, in 1998, and the actual conclusion in 2000 would never have been so long.
Listen to what Imperial’s own report had to say in April 1998. The key financial issue facing Wye was one of ‘recurrent deficit’, and it was ‘well recognised by the governors, principal and staff of the college’. ‘There is strong evidence,’ says a confidential admin services report produced by Imperial, ‘that this matter is being taken very seriously and a recovery plan is being developed… The target is not just to break even but to produce a surplus’.
The deficit in 1998, net of cash, was expected to be around £1.5m, with the possibility of raising £250k in land sell-offs. The college accounts were prepared on a ‘suitably conservative basis… with bad debt provisions and closely monitored research accounts’. In summary, says Imperial’s executive report, ‘apparently a nice clean set of accounts’. Nor were there any trading areas showing concern.
In a report to council on October 9, the then rector revealed that the college expected to return a small surplus for the year, after capital and property transactions, and finish with a budgeted operating deficit on forecast of £484k. Student recruitment, salary and non-staff costs were all on target. All in all, while no-one doubted Wye had to do something, things didn’t look bleak, not least because the college was sitting on a very valuable property portfolio.
In 1995, this was estimated as having a value of around £13.75 million, plus a milk quota valuation of £410k. In short, said the then director of estates, Ian Caldwell, ‘there do not appear to be any show-stoppers in terms of merger’. The only issues he recorded were some ‘tensions with the local community’. ‘One of the key roles of the senior academic member of staff on site must be to maintain the Principal’s close liaison with the local community. Estates also need to maintain a close personal contact with the local planning authority etc.’ Well Mr Caldwell’s successor, Mr David Brooks Wilson, certainly did the latter…
So unconcerned was this generation of Imperial’s administrators about the financial aspects of the deal that it scarcely merited much of a mention in a key report to the governing body on June 26 1998 at which the merger was effectively agreed. According to the report to that meeting, ‘Financially, Wye had an underlying recurrent deficit in 1997-97 of £500k (on a turnover of £12.5m). At 31 July 1997 they held £2.7m in their general reserve and carried a £1.8m debt. They showed £16m tangible assets on their balance sheet. Their intention is to produce a recurrent surplus by the time of the merger and they have a credible rationalisation plan to achieve this.’
The merger duly went ahead, and was finally concluded, after much legalese, including a reference to the Privy Council, in August 2000. Those looking for a conspiracy to rip Wye apart for its property from the start will be very disappointed by the documents below. They indicate a firm sense of direction in Imperial about building up Wye as a healthy and vibrant part of Imperial College. Indeed a report in April 1998 notes, ‘The Director of Estates understands that there is some concern at Wye over whether a merger with a large institution such as IC or the University of Kent would result in asset-stripping and re-location of activities… Part of our response might be that we are considering merger because we wish to utilise the assets at Wye, not sell them.’
But the leadership of Imperial has changed completely since then, and so has Wye, with the gradual — and some would say deliberate — rundown of undergraduate teaching. The current regime has made it plain that it will not countenance agriculture or undergraduates in any form in the village — effectively spelling the death of the college itself. It’s all a far cry from Sir Ron Oxburgh’s optimistic and seemingly heartfelt introduction to a paper on the college merger produced on June 26 1998.
‘From the point of view of this College the reasons are solely academic. From the point of view of Wye the reasons are both academic and financial; they have recently received a sharp and unwelcome reminder of the financial vulnerability of small monotechnic institutions in today’s unforgiving funding regime.
‘Agriculture looks two ways, in one direction towards the environment and matters of sustainable development and in the other towards diet and health… Over time there will be a demand to develop strains that are not only pest-resistant and high-yielding but that have quite specific nutritional and even pharmaceutical properties. Merger with Wye offers Imperial what is probably the only realistic way of filling this gap in the foreseeable future.’
Four years later, Sir Ron retired from the rectorship, and Richard Sykes entered in his place. From that point on, it seems, Wye has been doomed, except as an extraordinarily lucrative building site for an organisation that appears to have acquired it for nothing in the first place.