Over the last decade the University of London, one of the largest and most complex in the world, has changed the relationship between its colleges and the centre by moving its schools and institutes into those colleges. As a consequence the Vice-Chancellor, Professor Graham Zellick, has established an Advisory Group to review the affiliation of the Courtauld, on the understanding that in its present situation it has become something of an anomaly. There is a good case for arguing that, if the Courtauld is to remain the Courtauld, it always will be an anomaly, and in order to ensure this it is necessary to have in place a sound structure of governance.

The Advisory Group, which has full representation from the Courtauld, has identified three basic choices. These are, to remain in the central University but with a new governance structure, to merge with a college, or to become a college in our own right.

The Institute has approached the challenge of establishing a new context by undertaking two assessments. In the first we have examined our core values, our strengths and weaknesses, and the opportunities before us. All staff have been involved in this exercise, in which we have had the able assistance of consultants Adrian Ellis Associates. The results will take the form of a strategic five-year plan and a business plan, which will enable us to approach negotiations with clarity of purpose and information. If this assessment can be described as working, so to speak, from the inside out, the second worked from the outside in. It involved the management consultants McKinsey examining our position in an international context and assessing what would be needed to maintain and enhance it. None of this work would have been possible without the generous help in cash, kind and moral support of private donors and the Andrew W. Mellon Foundation. McKinsey, who worked pro bono, are particularly deserving of our gratitude. We have also benefited extensively from the advice of a number of friends of the Courtauld.

Our main aims throughout have been to embrace and capitalise on change, to maintain the identity of the Courtauld, and to enhance the excellence and range of what we do, especially in the changing intellectual climate of the history of art. Our assessment at present is broadly as follows:

Without an endowment independent college status is impossible and our current position within the central University of London difficult, leaving merger as the only realistic choice. There is no doubt that we could gain substantially from being located within a college, but everything would depend on the terms of the merger. It would, however, be unlikely to achieve our main aims without additional funding.

With an endowment all three options would provide potential solutions. Their assessment would require detailed discussion with potential donors, the University and the Higher Education Funding Council, and would involve considerations such as the following, with responsibility in each case residing in a board of governors. Independent college status would bring institutional independence and clarity of relationships, but the small size of the Courtauld and its lack of property would make it unusual among colleges. Merger with a college with ring-fenced status would provide a firm university context but possible institutional complications. Remaining within the central University but with devolved responsibility would be the most straightforward option, but it could be affected by changes in the structure of the centre.

We are working to establish estimates of the funding required, first to maintain our present status and standards in the light of decreasing support for higher education in the UK, second to provide financial independence and our own board of governors, and third to enable us to fulfil our plans for projects such as a graduate study centre and a new exhibition space for the Gallery. The sums will certainly be large, but they can be achieved incrementally. We are working on raising the amounts needed. We have begun the restructuring of our Development Office with more experienced staff and more ambitious programmes and have acknowledged the need for a culture shift in which all staff will be involved in fund-raising. We intend that, with or without endowment funding, the Courtauld will emerge from this period of change strengthened as a centre of excellence in the study, conservation, display and recording of works of art.

I shall keep you informed of developments.

Professor Eric Fernie