Minutes of the Finance & Business Operations - 2 November 2021
|Group||Minutes of Finance & Business Operations Committee|
|Location||ROOM A.41, LONDON ROAD CAMPUS, SHREWSBURY|
|Date||2nd November 21|
|Minutes Membership|| In attendance in Room A.41 |
G. Mills (Chair), D. Pulford, J. Staniforth (Principal/CEO), P. Tucker and R. Wilson.
|In Attendance|| Member of the Senior Leadership Team: |
P. Partridge, Finance Director (FD)
Clerk to the Board, T. Cottee
50/21. Declarations of Interest
51/21. Minutes of Meeting Held 04 October 2021 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 04 October 2021, be approved as a true and correct record, subject to the clarification that the next scheduled meeting was 02 November 2021.
52/21. Matters Arising
53/21. Management Accounts – Period 12 (Appendix – Agenda Item 5)
The Committee considered a report (previously circulated) with respect to the Management Accounts to 30 September 2021, which highlighted the key results, measures, and risks. All governors had been supplied with a copy of the Report
Regarding the 2020-21 prior year Outturn update, the current forecast EBITDA for the year ending 2020-21, had been reduced by £72k to £492k. Key changes to the R12 forecast included:
- Deferral (reduction in year) of income in respect of tuition “catch up” funding not used in year. This would reduce by c£20k as the result of identification of further additional catch-up activity.
- Increased bursary funding recognised reflecting final reconciliations of bursary funds allocated.
- Higher education contracts income.
- Higher trips and visits income.
- Higher than forecast subcontracting and other non-pay costs.
The R14 final ILR submission for 2020-21 funding had been submitted. The Committee acknowledged that the residual risk of Adult Education Budget (AEB) claw-back being significantly higher than allowed for was limited but remained until the Education & Skills Funding Authority (ESFA) and combined authorities confirmed the final funding position and the outcome of business cases for further relief which had been submitted. The current forecast did not assume that business cases were successful. The residual risk of Apprenticeship funding and achievement claims also remained and these adjustments would be confirmed during November 2021.
Regarding the 2021 – 2022 Outturn, the main anticipated changes to budget at this early stage were:
- Apprenticeship activity was significantly up on projections and the forecast income in this area had been increased accordingly.
- HE income was estimated to be slightly below budget due to the small shortfall of enrolments against planned numbers.
- Energy costs had increased significantly following the recent price spike in electricity and gas – the forecast, therefore, anticipated an additional cost significantly over budget.
- While Pay costs were running below budget year to date, the need for additional staffing to meet needs associated with the impact on students of COVID over the last 18 months was likely to lead to additional pay costs.
- The pay budget allowed for a 2.5% increase in pay costs with effect from 1 September 2021. The Teachers’ pay award has been agreed at c.1.1%; however, the unplanned 1.25% increase in National Insurance for social care which took effect from 1 April 2022, meant that, at this stage, no pay savings had yet been included in the forecast.
The College has applied for further addition Tuition “catch up” funding which had not at this stage been reflected in the forecast outturn.
In response to a question on how the College procured its gas and electricity, the FD explained the College had moved from a fixed-price 1 year contract running from October to September to one running from April to March each year with an interim 6-month fixed price agreed for the October to March period. When the College had renewed these contracts in August 2021, it had been affected by the recent significant increases in prices per unit.
In response to a question on how the College would spend the additional catch-up funding, the P/CEO explained that the College would deliver additional teaching hours or other activities to support student development and progression which met the funding criteria.
In response to a question on the reasons for the increase in apprenticeship income, the FD explained that there had been an increase in apprenticeship enrolments, including some where the college believed some 16-19 applicants had secured apprenticeships rather than enrolling to classroom-based courses. The College would receive funding for these students in 2021-22 (rather than in 2022-23 under the lagged funding methodology had these individuals enrolled to classroom-based courses). The P/CEO further explained the college’s strategy was to offer high quality apprenticeship programmes that supported the local economy and met local skills needs and that new starts were significantly higher than planned, primarily in construction areas, and also on the new Trade Union rep apprenticeship standard. The continued growth in apprenticeships and potentially lower staffing costs was expected to partially offset the impact of lower funded numbers in 2022-23.
The College was working with Cirencester College on an Education Foundation Trust funded project to develop and support new teaching staff and exchange best practice. The college was also working with marches providers on the Strategic Development Fund project as part of the Skills Accelerator programme. At this stage, potential additional funding which might accrue to the College as part of these activities had not yet been clarified and any such additional funding was likely to result in additional offsetting expenditure as part of this activity.
At the request of the Committee Chair, the FD provided an update on the various bids.
- A 16-19 Capacity Fund bid to expand the teaching space at the English Bridge Campus.
- A Low Carbon Skills Fund (LCSF) bid to fund the development of a de-carbonisation strategy for the College.
- The College was working with ARCADIS to develop a grant application for the Public Sector Decarbonisation Scheme (PSDS3) funding to decarbonise elements of the London Road Campus.
- The College had secured additional funding from the LEP towards the purchase of engineering equipment.
The College had been successful in its application for funding from the Marches Renewal Energy Scheme (MARE) to support the installation of solar panels on the Engineering Block at the London Road Campus.The College had been invited to apply for ROTAP registration in December 2021, to retain its ability to provide apprenticeships; the outcome would be known in February 2022.
Future reports would include a precis of bid submissions made.
In response to a question on how the 2021 Budget announcements would impact the College, the FD explained that the precise impact was unknown, as details had yet to be announced. Although the College would achieve additional funding due to any inflationary increases in the Funding Rate the additional funding announced would, in reality, do little more than cover the increased heating costs this year. Additional hours for 16-18 study programmes would likely be funded at a marginal rate and therefore may not cover the significant associated costs.
Resolved: That, having considered the report, the Committee receive the Management Accounts to 30 September 2021.
54/21. Estates Termly Report and Strategy Update
The Committee received the report (previously circulated).
Further to F&BO Min. No. 45/21, when the Committee had received a presentation from P. March & H. Rhodes, from Peter Marsh Consultants (PMC), on the development of the College’s Estates Strategy, the FD reported that this was anticipated to be completed with the final report available at the end of October 2021.
The Committee reviewed the timeline for the roll-out of the estates strategy report to key internal stakeholders.
Following a lengthy discussion on the process for consideration of the consultant’s proposals and how to take them forward to the development of the College’s Estates Strategy, it was established that –
- The consultant’s report was likely to contain top-level strategic options that would require detailed consideration with the view to present a developed Strategy in the summer of 2022. However, this process should not delay shorter-term projects to enhance student experience, planned from 2022 – 2023.
- The “Estates strategy group” would provide governance oversight, including agreeing the strategy and overseeing the implementation of the recommendations. The group would consist of members of the Committee and R. Sartain and M. Thompson, the P/CEO and Finance Director.
- The P/CEO & FD would circulate to the estates strategy group a general outline of the College’s approach.
The Committee also considered –
- Updates on the College’s significant estates projects.
- Tactical and immediate priorities for the Estates Team which included –
- The development of appropriate space for the E-Sports curriculum.
- A programme of works for the renewal of the London Road Campus main block windows.
- Further development of plans for increasing teaching capacity and improved student independent learning and social space at the English Bridge Campus.
The key challenges facing the existing estate which included -
- COVID impact on campus operations.
- The impact of COVID on supply chains and in construction where availability and cost of materials was variable.
- The condition of the London Road Campus Main Block windows.
- The increasing demand and capacity constraints at all campuses.
- Increasing numbers of students requiring High Needs support and the resulting pressure on accommodation and space at London Road Campus.
The FD sought the Committee’s views on a matter concerning the Wakeman Playing Fields, details of which are set out in a Confidential Minute.
55/21. Health and Safety Annual Report (Appendices – Agenda Item 8)
The Committee reviewed the Termly and Annual Report on Health and Safety across the college for August 2019 to July 2020 (previously circulated), which provided an update on Health and Safety and included an Assurance Statement about the Board’s responsibilities for health and safety.
The Committee in reviewing the reports particularly noted the following -
- All sites’ Fire Risk Assessments had been reviewed with remaining action points being prioritised and implemented.
- Health and Safety Audit outcomes. All critical findings had been remedied quickly.
- There had been no RIDDOR reportable events during the reporting period.
- There had been a slight reduction in the number of near misses being reported.
- A thorough report and timeline on the college’s health and safety actions taken with respect to the Covid-19 pandemic over the period. Fortnightly keep in touch meetings continued to be held with the College’s union Health and Safety representatives allowing them to bring any issues/concerns to the attention of the FD, Group Vice Principal – HR & Professional Development and the H&S Officer. Risk assessments, procedures and the measures implemented were continually reviewed and adjustments made where required to ensure the continued safety of all staff, students and visitors.
The Health & Safety Link Governor had reviewed the report and had submitted no additional comments or questions. The Link Governor had also had a series of meetings with the H&S Officer and had attended on-site H&S meetings, during the summer and this Term, to demonstrate continued governor engagement and oversight.
In response to a question, the FD explained that all health & safety incidents and near misses were analysed for any trends or training needs; no unexpected issues or unplanned additional needs had been identified during the period.
The College Health and Safety Policy would be presented to the next Board meeting in December. The Annual Health & Safety Policy Statement would be signed by the Board Chair and Principal/CEO at the next Board meeting.
Resolved: That, having considered the report, the Committee RECOMMENDED TO BOARD that the Health & Safety Annual Report and Policy be approved.
56/21. Shrewsbury Colleges Group: College Financial Forecasting Return 2021 to 2023 (Appendix – Agenda Item 9)
The Principal/CEO referred to a letter received from the ESFA (previously circulated) confirming that the appropriate assessment grade, based on the College’s submitted financial plan was Good for 2020/21 (the latest outturn forecast year), and Good for 2021/22 (the current budget year).
The Committee also reviewed the Financial Dashboard compiled from the information that colleges submitted to the ESFA. This Dashboard incorporated various key performance indicators and measured those against both target benchmarks and benchmarks achieved in the sector. In reviewing the Financial Dashboard, the P/CEO explained that the benchmarking cohort was now smaller, due to sixth forms merging with other education providers or through academisation. However, the Dashboard remained of value, as it provided additional contextualisation of college performance and stimulated questions from governors.
57/21. Risk (Appendix - Agenda item 11)
As part of the discussions on the College’s Risk Register (previously circulated) agreed by Board (Board Min No. 19/20 refers), the Committee examined those risks within its remit to ensure that they had either been identified or adequately discussed at the meeting. The Committee agreed that it had been advised of and had considered risks with respect to rising energy costs, rising inflation and the impact on the College and ROATP registration application.
It was noted that the 2021 – 22 Strategic Risk Register would be presented to the Audit Committee at its next meeting and the updated risks would, from that point, be included on subsequent committees’ agendas.
58/21. Date of Next Meeting – 07 December 2022 at 5.30 p.m. Venue - tbc.
The meeting concluded at 7.28 p.m.