Minutes of the Finance & Business Operations - 24 May 2022
|Group||Minutes of Finance & Business Operations Committee|
|Location||P/CEO’s OFFICE, LONDON ROAD CAMPUS, SHREWSBURY|
|Date||24th May 22|
|Minutes Membership||G. Mills (Chair), D. Pulford and R. Wilson.|
|In Attendance|| Members of the Senior Leadership Team: |
M. Brown, Group Vice Principal, Quality, Apprenticeships & Information (GVP – Q, A&I)
P. Partridge, Executive Director, Finance (EDF)
Clerk to the Board, T. Cottee
|Apologies||J. Staniforth (Principal/CEO) and P. Tucker|
16/22. Declarations of Interest
17/22. Minutes of Meeting Held 05 April 2022 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 05 April 2022, be approved as a true and correct record. They were signed by the Committee Chair at the meeting.
18/22. Matters Arising
19/22. Draft Fee, Fee Remission and Refund Policy 2022 – 2023 (Appendix – Agenda Item 7)
The Committee reviewed the Draft Policy (previously circulated), prior to presentation to the Board for approval.
The GVP reported on the amendments and updates to the 2022 – 23 Policy –
- Minor changes had been made to reflect changes in job titles and increases in fees, where applied.
- Regarding Higher Education fees and charges, the college was awaiting the outcome of the Office for Students’ review of the college’s draft Access and Participation Plan. The HE Link Governor had been kept up to date on this and had been assured on the college’s approach to the production of the Plan. Fees proposed for HE courses are subject to approval of the Plan by the Office for Students (OFS). In the unlikely event that the Plan is not approved, HE course fees would remain unchanged at 2021-22 levels.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Fee, Fee Remission and Refund Policy 2022 – 2023, be approved.
20/22. Draft Sub-Contractor Management and Retained Funding Policy 2022 – 2023 (Appendix – Agenda Item 8)
The Committee reviewed the Draft Policy (previously circulated), prior to presentation to the Board for approval.
The GVP reported on amendments and updates to the 2022 -23 Policy –
- Amendments had been made to the Initial Tender Process, to ensure compliance with the Education & Skills Funding Agency’s contracting standards and practice.
The Committee noted the arrangements set out in the Policy for in-year monitoring and review of subcontracted activity by governors, which would be through appropriate committees supplied with updates on subcontracting activity to enable them to fully review and monitor this area of provision. This would allow governors to understand the impact in terms of financial exposure, performance and quality assurance.
The Committee sought assurance that all sub-contract partners upheld the college’s commitment to safeguarding, PREVENT and equality & diversity. The GVP explained that sub-contracting partners were expected to uphold the college’s standards, and this was written into the Policy and set out in contracts awarded; performance against this expectation was monitored through regular partner reviews. In line with the college’s strategic decision to reduce the number of sub-contracting partners, currently, the college had two sub-contracting partners; both of whom had reliable track records of performance and adherence to the college’s performance expectation. The GVP confirmed that the newly appointed Apprenticeship Link Governor would undertake assurance work in this area going forward.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Sub-Contractor Management and Retained Funding Policy 2022 – 2023, be approved.
21/22. Period 9 Management Accounts (Appendix – Agenda Item 5)
The Committee considered a report (previously circulated) with respect to the Management Accounts to 30 April 2022, which highlighted the key results, measures, and risks. All governors had been supplied with a copy of the Report.
The forecast EBITDA outturn had been further reduced, due to the following changes:
- A prudent reduction in forecast Apprenticeship income to reflect the in-year position, offset in part by a reduction in expected trip and material pass-through costs.
- A reduction in forecast other income reflecting lower than previously anticipated catering and other sundry income to the end of the year.
- An increase in forecast Pay costs reflecting the increase to NI costs not fully factored into previous forecasts and reflecting ongoing high levels of overtime and higher than expected sickness absence rates.
- Forecast non pay costs had been increased reflecting a prudent further upwards revision of energy costs.
- Depreciation costs were also now forecast higher than budgeted due to late capitalisation of additions this year leading to a backdating of depreciation costs.
- Cost Inflation and in particular energy costs remained a significant risk area with inflation currently over 5% and now anticipated to peak at over 10%. The impact of these cumulative cost increases would further impact the college’s cost base for 2022/23.
- Trade Union Studies activity continued below planned take up. The budget had expected a return to face to face activity with larger groups and greater engagement from GMB reps than had, to date, materialised. The reasons for this being higher than expected levels of staff sickness and a slow return to face-to-face teaching. This remained an aera of significant concern and risk and still required delivery of a further £270k to the end of the year. The college’s our own AEB delivery remained broadly on plan compared to this time last year; however, was still likely to underperform to budgeted levels of activity. The Committee sought assurance that the college was taking sufficient mitigating action. The ED, F explained that the GVP and his Team were focussed on ensuring maximum possible starts and completions during the remaining academic year and had employed temporary teaching staff where possible.
- Subcontracted AEB delivery was planned to be above budget, albeit with a corresponding increase in subcontract costs.
- The College Condition Improvement Fund application for replacement of windows at London Road Campus had been unsuccessful. Following revision to tendered costs the college was proceeding to replace these windows from college resources during the summer of 2022. The Committee expressed disappointment at this outcome. The Board Chair expressed a degree of frustration that that college, despite being a large, high-performing and successful institution, could not attract significant funding, nor achieve success in bidding for funding. The ED, F explained that the college had reviewed its bid support provider and he was speaking to a provider with a track record of success in supporting other colleges.
Resolved: That, having considered the report, the Committee received the Management Accounts to 30 April 2022.
22/22. Estates and Capital Matters – Verbal Update (Agenda Item 9)
On the request of the Committee Chair, the ED, F provided a verbal update on the college’s planned capital and estate development programme, going into summer 2023.
The planned works included –
- Refurbishment of the Learning Resource Centre (LRC), Drama facilities and Canteen at the English Bridge Campus as reported to governors on the Strategic Development Day held on 01 April 2022, was planned for the summer break. The ED, F was working with the selected contractors to achieve completion of the works by September 2022. He explained that this project involved extensive remodelling and, to meet the challenging deadline, some demolition work had been undertaken by separate tender, over Easter. The project required further demolition and the relocation of the current canteen. If contractors could not guarantee delivery of this within the timeframe required, the college may have to compromise and undertake a more moderate refit of the LRC only and leave the demolition and refit of the canteen until summer 2023. The Committee acknowledged that the already-challenging project deadline was further complicated by difficulties in securing building materials and contractors; however, it agreed it was imperative that students and teaching and learning were not disrupted by a project overrun beyond late September 2022. However, dividing the project into two parts would be more costly, impact student experience and put other capital projects planned for 2023, at risk. The Board Chair expressed the view that the college should make every effort to complete the project in one phase. The Committee AGREED that it would be beneficial to visit English Bridge Campus before the conclusion of the summer term.
- Replacement of windows to the Main Block at the London Road Campus. The selected contractor was scheduled to commence over the summer break. The Committee sought assurance that contingency plans were in place to mitigate the risk of a project overrun.
- Classroom redesign projects at London Road Campus to build additional capacity for E-Sports provision.
- Other projects planned for 2023, which included extensive works at the Welsh Bridge Campus, as outlined in the Draft Estates Strategy, would form the basis of the post-16 capacity fund bid to be drafted over summer 2022.
The Committee discussed the continuing development of the Draft Estates Strategy and the Estate Strategy ‘Roadmap’ developed by the Estates Strategy Working Group. At the Strategic Development Day held on 01 April 2022, after facilitated group discussing set questions around the Draft Roadmap, it had been concluded that -
- The planned direction of travel set out in the Road Map was a sound basis on which to proceed with the Draft Estate Strategy.
- There was a strong consensus to proceed with investing in the detailed development of major projects such as the demolition and rebuilding of Austin Building, Welsh Bridge Campus, to create extra space.
- There was less appetite to explore the potential for disposal of some land to finance /enable major campus development.
- There was more appetite to consider increased borrowing to finance /enable major campus development, and an acceptance of the risk of a reduction in “Financial Health” from good to “Requires Improvement”, as a result.
- The Board should agree the Estates Strategy and a list of priority projects, although this would need to remain flexible, to accommodate changing circumstances.
The Committee acknowledged that, whilst there had been limited appetite for land disposal expressed at the event, Committee agreed that that it was still worth continuing to explore development of the land's potential value given that this could take several years.
To ensure effective governance oversight, the Committee suggested that the Estates Strategy Working Group meet from September 2022 and the Draft Estates Strategy and Roadmap be considered formally at Board.
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 and building costs and the risks of under delivery of the AEB Budget and their impact on the College.
The Committee additionally observed there was a rising general risk of unplanned disruption to teaching and learning due to possible overrunning building works creating disruption or going over budget and requested that this be added to the Risk Register as an additional risk.
At the request of the Committee Chair, the ED, F provided a verbal update on the outcome of the recent invacuation event on that had recently taken place at the College. There had been a review of the college’s invacuation procedure following the incident and the Committee was assured that the college’s procedures had been effectively followed.
24/22. Date of Next Meeting – 28 June 2022 at 5.30 p.m. Venue - tbc.
The meeting concluded at 7.34 p.m.