Information about Spin Out companies

Dear Sir or Madam,

Can you please pass the following request to the person responsible
for handling such enquiries?

I would like information on the following points:

1. How many spin-out companies has the University formed in the
past five years and how much did it cost the University to create
each company?

2. Could you provide me with a breakdown of costs incurred by the
University for each spin-out company formed within the past five
years? This breakdown should include:
- legal costs involved in the formation of each company;
- salary costs for any University employees responsible for the
formation of each spin-out; and
- any other overheads involved, i.e. bonuses for said staff,
consultancy costs, accommodation and travel costs.

3. Could you also provide amounts of all income earned from
University spin-out companies within the same five-year period,
excluding equity/shares held by the University in those companies?

4. If you can neither provide the costs nor the quantifiable
amounts of actual income can you provide me with the justification
for such expenditure from the public purse?

5. How many spin-out companies have registered actual sales and how
many of these companies are trading at a profit? Could you please
provide details of profit and loss accounts for these companies? If
none of these spin-out companies have made a profit, can you
provide me with justification for continuing to spend public funds
in this area?

6. What is the ratio of costs incurred by the University to income
earned by each spin-out company formed? Does this represent good
use of public funds?

7. Have the University's Vice Chancellor, Pro Vice Chancellor
responsible for financial matters, Secretary of Court, Director of
Finance or any of the University's governing bodies ever called for
an investigation/review regarding the cost to the University of
creating spin-out companies? If so, could you please provide me
with the relevant details/reports?

8. What level of legal/business qualifications do the people
responsible for creating spin-out companies possess? If they do not
possess such qualifications, is the University going to take any
action against the Director of Human Resources for appointing these
people, bearing in mind that it is public funds being used here?

9. Are the University's managers with financial control for
spin-out companies required to keep a record of all expenditure? If
they are, are they required to report this to the Secretary of
Court or Director of Finance? If so, could you please provide me
with the relevant details/reports?

Yours faithfully,

Paul Philips

Dear FOI Office,

Further to your request of 8 June 2009 for clarification, my
replies to your queries are below:

Point 1.
Please provide clarification of ‘costs’ to the University to create
each
company.

- 'costs' should include anything that can be identified with the
creation of each spin-out company including, but not limited to,
costs for all legal and accountancy advice, costs for external
consultants' advice, costs for any dedicated University staff
having responsibility for company formation, recruitment costs for
spin-out employees, etc.

Point 8.
Please provide clarification of “people responsible for creating
spin-out
companies”.

- This refers to anyone employed by the University whose dedicated
function/role includes the creation of spin-out companies.

I trust the above clarifies your queries.

Yours sincerely,

Paul Philips

Dear FOI Office,

Thank you for your response of 26th June 2009. Its contents were as
expected, but are still disappointing since we learn that the
University of Edinburgh was able to provide a full and transparent
reply to the same questions. Why is is that Glasgow chose to hide
behind legislation?

Your reply also throws up some interesting questions:

1. The part of Glasgow University that interfaces with business and
is responsible for the formation of spin out companies cannot tell
me straight away what the set-up costs are. Indeed, they estimate
this would take 16.5 hours to collate such information. On the
other hand, they are able to give me income from these companies,
accurate to the pound, without taking 16.5 hours to collate these
figures. Is there something about the level of costs incurred that
you don't want the public to see?

2. 10 spin-outs in 5 years is hardly a record to boast about. That
does not seem to me to be a very constructive use of anyone's time
and money. Why indeed do you bother if you can only form two per
year and only one company formed in the past five years has
actually recorded a profit?

Again, it would be interesting to know what the set-up costs were
to determine what benefit such activities are to the taxpayer.

3. I note with interest that Edinburgh have a team which includes a
number of solicitors amongst their professional staff. Glasgow have
someone with a 'business-related degree', which could cover almost
anything these days. This does not suggest to me that Glasgow have
suitably qualified people (or should that be 'person') in place for
this activity. One profitable company in five years has an air of
incompetence about it. In any other walk of life, such performance
would not be tolerated. Is Glasgow a haven for poorly qualified
incompetents?

4. I will be asking my MSP to raise the issue of Glasgow's
performance relating to spin-outs and request that no further
public money be wasted supporting such a poorly performing aspect
of the University's activities.

The University therefore cannot provide evidence a) that the spin
out activity is worthwhile in terms of its (non-existent)
objectives; that it does not have to hand records of set-up costs
for such companies but does have exact income figures - which makes
me wonder how you can calculate how one of said companies made a
profit?

Yours sincerely,

Paul Philips