Letter to the Visitor to Goldsmiths – The Right Honourable Jacob Rees-Mogg, MP

The Clerk of the Council, Privy Council Office, London                     

16 March 2022

Petition to the Visitor of Goldsmiths, University of London

To the Clerk of the Council,

We are writing to petition you in your role as Visitor to Goldsmiths, University of London pursuant to section 46 of the Higher Education Act 2004 and The Charter of Goldsmiths College (the “Charter”). We are concerned members of staff and members of various governing bodies and it has come to our attention that a number of issues directly affecting the governance of Goldsmiths may negatively affect the proper governance of the university.

We have raised our concerns internally with the Council by all means available, up to and including a public letter to the Chair of Council which was signed by 281 members of staff (“Staff Letter”). We have been informed by letter dated 17 December 2021 from the Secretary to the Council that, as a matter of final decision, the Chair of Council considered there was no case to answer (“Council Letter”).

The role of the Visitor overseeing the work of the Council is a crucial part of ensuring propriety and accountability in the governance of Goldsmiths. We would greatly appreciate it if you could take note of the points outlined below and address the following issues raised:

1. Conflicts of Interest

A. Contracts Awarded to KPMG LLP

1.1  As set out in the Staff Letter, the Council engaged KPMG LLP to perform: (i) an Independent Business Review (“IBR”) in the summer of 2020 at the request of Goldsmiths’ lenders Lloyds Bank PLC and NatWest (together, the “Lenders”); and (ii) additional consultancy work in connection with Goldsmiths’ Senior Management’s Restructuring Plan (see section 2 below).

1.2  In addition to the legal duties of Council members to avoid conflicts of interest, Goldsmiths’ conflict of interest policy states that a conflict of interest arises where outside relationships “interfere or may be perceived to interfere with their performance of … duties”.

1.3  The Staff Letter raised that, as Council member Lynn Pearcy was a partner with KPMG LLP for 34 years, there is the possibility of an actual or perceived conflict of interest. 

1.4  The Council Letter states that Ms Pearcy was not on the panel assessing the Invitations to Tender for the Independent Business Review, thus conceding the point that there is a potential conflict of interest. However, Ms Pearcy was involved in the approval of the additional consultancy contracts. The Council Letter justifies this on the basis of Ms Pearcy’s retirement from KPMG, which in the view of Council indicates that “there is no basis upon which to assert that Ms Pearcy might continue to have any personal or professional relationship with the company.” Given Ms Pearcy’s long term affiliation with, and status as partner in KPMG LLP, Council’s assertion is entirely unreasonable and without factual basis.

1.5 Furthermore, the Council Letter declines the request to share further information outlining any additional steps taken by the Council and Ms Pearcy to comply with Goldsmiths’ conflict of interest policy and the legal duty to avoid conflicts of interest.

1.6  In the interest of transparency, as set out in the regulatory framework, sufficient information should be made available to confirm what steps were taken to avoid Ms Pearcy’s conflict of interest with respect to contracts awarded to KPMG LLP. This would include, but not be limited to, the minutes of the Recovery Programme Board and any risk assessments carried out in relation to the potential conflict of interest.

B. Contracts awarded to ADVANCE HE and IDP Connect

1.7 Neither is Lynn Pearcy an isolated case of potential conflict of interest on Goldsmiths’ Council. Aaron Porter, also on Council, lists under his directorships/board memberships on LinkedIn his role as Associate Director of IDP Connect and ADVANCE HE. Both companies have been awarded consultancies and tender contracts respectively under the current Senior Management Team. A payment of £44000 to IDP and a £31000 payment to ADVANCE HE are listed in recent accounts, but the process by which these consultancies were awarded has not been made public. The Council Letter states that awarding a contract to IDP connect is seen as an “effective use of budget” and that Aaron Porter had no involvement in the process, but again, no information has been provided as to whether any risk assessment has been carried out in relation to a potential conflict of interest whilst Porter was all the while a member of Council and in regular contact with members of the Senior Management Team. 

2. Restructuring Plan

A. Procedural Issues

2.1 In addition to conflicts of interest, we wish to draw your attention to concerning deviations from due process in several recent Council decisions relating to the restructuring of Goldsmiths University, including but not limited to: (i) restructuring Goldsmiths’ facilities agreements with the Lenders and the granting of security over Goldsmiths’ real property to these Lenders, and (ii) a wide ranging restructuring of the academic curriculum, administrative organisation and of academic departments of Goldsmiths as part of the so-called ‘Recovery Plan’, parts of which were earlier referred to as ‘Evolving Goldsmiths’. We will refer to the entirety of these processes as the “Restructuring Plan”.

2.2 Pursuant to Statute 4 of the Goldsmiths Statutes, Council holds the power to borrow and to grant security, and to engage in academic restructuring, provided that “before determining any question or taking any decision on the allocation of resources which the Council considers to affect the academic policy of the College, the Council shall seek the advice of the Academic Board”. Council is also required to provide reasons for rejection of any recommendations made by the Academic Board.

2.3 Council approved ‘Evolving Goldsmiths’ in Spring 2020, prior to its presentation to the Academic Board. This is in clear breach of Goldsmiths’ Statutes, as set out above, and renders any such decision of the Council ultra vires. This failure to observe due process also places Council members in breach of their legal duty to act within their powers.

2.4 In addition, loans supporting the objectives of the Restructuring Plan were signed with each of the Lenders. The statutes stipulate that Council should be the signatory for such loan arrangements. However these loans were signed by members of the Senior Management Team.

B.  Wider Governance Issues

2.5 In addition to the serious procedural issues laid out above, Goldsmiths staff raised serious concerns about the content of the Restructuring Plan on multiple occasions. We summarise three key concerns and their implications below.

2.6 The Restructuring Plan focuses solely on reduction of costs, without regard to the purpose of Goldsmiths as a University as set out in the Charter. Whilst maintaining the solvency of Goldsmiths is important to achieving the objectives, and a regulatory requirement, in approving the Restructuring Plan the members of Council have gone above and beyond this, effectively mandating financial surpluses. There appears to have been no risk assessment of this approach in the context of Goldsmiths’ own purpose, or the wider regulatory framework. This raises questions of whether members of Council have acted in accordance with their legal duties to safeguard the functioning of Goldsmiths, and with regard to the interests of its members and/ or creditors, as appropriate.

2.7 The Restructuring Plan prioritises the requirements of a single group of creditors – the Lenders – who were unsecured creditors prior to the implementation of the Restructuring Plan. This conflicts with Council members’ legal duties owed to Goldsmiths’ staff and students as members and/or potential creditors. Council has consistently emphasised that the Restructuring Plan is required by the Lenders. This raises similar concerns to paragraph 2.6 above, but also as to whether Council members have complied with their legal duties to act independently.

2.8 Thirdly, Council does not appear to have fully explored the financial options available to Goldsmiths. These include: (i) the recommendations made by KPMG LLP in the initial IBR which Council did not follow, (ii) alternative sources of fundraising, and (iii) challenging the punitive and off-market terms of the financial restructuring and associated legal and professional costs currently estimated at £3.6 million, and expected to increase considerably due to ongoing involvement of KPMG LLP and other consultants. This raises the question of whether Council members have acted with reasonable skill, care and due diligence in approving the Restructuring Plan.

3. Senior Management Team

3.1 Members of staff have raised concerns about the lack of independence between the college Senior Management Team (“SMT”) and the college Council. SMT members sit on the Council,  the body that should oversee the work of SMT. Council members sit alongside members of SMT on subcommittees (for example Council member Monica Barnes sits on the Human Resources and Equalities Committee). This includes committees that take operational decisions including those related to the Recovery Plan. The lack of separation of powers runs contrary to the stated role of Council and good governance.

3.2 This lack of separation of powers is reflected in the apparent disinterest of Council in questioning the appropriateness of SMT decisions, including those related to the choice of and collaboration with the Lenders and conditions of the financial facilities provided.

3.3 Further, the majority of members of SMT are by now appointed on short-term contracts and the makeup of the SMT membership is continuously subject to change because members only stay for short periods of time, often under six months. In the past three months the Director of Communications, the Head of HR and the Deputy Head of HR, as well as the COO have all left. The current Head of HR, the head of communications and one Head of School are only employed on fixed term interim contracts. Lack of internal resources has been stated as a reason for incurring high consultancy costs, as stated in the Council Letter. As far as we are aware, Council has taken no steps to address these issues. This again raises the question of whether members of Council are acting in compliance with their duty to exercise reasonable skill and care.

3.4 Pursuant to the Statutes, members of the Council also have a duty to ensure that members of the SMT are acting in accordance with their roles. In December 2020, as a response to the repeated failure of SMT to address concerns regarding the ultra vires approval of the “Evolving Goldsmiths” program, a Vote of No Confidence in the Senior Management Team was held. The ballot was sent to 1204 eligible staff in academic departments.  Of these, 698 people (58%) took part and 605 voters (87%) voted no confidence in SMT.  Thus an absolute majority of 50.2% of all votes were in favour of the Vote of No Confidence, whilst a  mere 7.7% of all votes were expressing confidence in the SMT. Council acknowledged that the Vote of No Confidence was held and the results but did not engage with the questions over management raised in the Vote of No Confidence or try to mediate between staff and SMT despite their duty in statute to hold both the Warden and SMT accountable for the way the University is managed.

We would be extremely grateful if you could address the issues mentioned in this letter one by one at your earliest convenience.

Yours sincerely,

200 Goldsmiths Staff Members

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