Minutes of the Finance & Business Operations Committee - 06 June 2020
|Group||Minutes of Finance & Business Operations Committee|
|Location||HELD BY REMOTE ACCESS THROUGH MICROSOFT TEAMS|
|Date||2nd June 20|
|Minutes Membership|| In attendance by electronic device and contributing towards the meeting quorum, in accordance with Instrument 12. (Members may count towards the quorum if they are able to be present by electronic or digital communication (including attendance by video conferencing or telephone conferencing). |
G. Channon, R. Heath (Chair), G. Mills (co-opted Committee member), D. Pulford (co-opted Committee member), J. Staniforth (Principal/CEO), P. Tucker and R. Wilson.
|In Attendance|| In attendance by electronic device |
Member of the Senior Leadership Team:
P. Partridge, Finance Director (FD)
Clerk to the Board, T. Cottee
By invitation of the Committee for Min. No. 23/20
M. Needham, Director of Admissions and Marketing (DoA&M)
Prior to the meeting, the Chair welcomed to the meeting –
- G. Mills, the newly-appointed Co-opted Committee member; and
- M. Needham.
20/20. Declarations of Interest
R. Heath declared a standing interest as an employee of Harper Adams University.
21/20. Minutes of Meeting Held 31 March 2020 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 31 March 2020, be approved as a true and correct record.
22/20. Matters Arising
Further to F&BO Min No. 14/20 (Management Accounts), the Committee was informed that a partner organisation (JCA) had failed in its application to remain on the Register of Accredited Training Providers (ROATP). The College had been implementing the contingency plan previously provided to the ESFA. However, the provider was also now closing down its operations and laying off apprenticeships due to the COVID Pandemic. In response to a question, it was confirmed that this would affect these College apprentices as in the current pandemic it would provide a challenge to the College to seek alternative employers. The Committee set an expectation to receive further information when available, including the financial impact, in the next set of Management Accounts.
23/20. Presentation from the Director – Communications, Admissions ＆ Marketing
Further to F&BO Min. No. 17/20, the Committee received a presentation from the Director on his initial observations of Marketing, Communications and Admissions (CAMS).
Based on his impressions and feedback from College teams regarding CAMs, he explained his plans to review the CAMs Team and the service offered to the College across three different areas:
- People – supporting skills development to meet College requirements and working to re-introduce a content role within the Team;
- Processes – developing ownership of the student recruitment targets to positively influence numbers thus moving to a pro-active service;
- Technology – data management and ownership, effectively utilising SharpSpring (a marketing automation tool that combines a marketing database with digital communication capabilities) and digital technology to engage with the target audience – ‘content led, digital first and always on’.
He also explained the immediate actions to be implemented, including -
- The development of a detailed and clear marketing plan with timescales; and
- Campaign planning for 2020/21.
In response to a question, the DoA&M explained that measuring, in terms of cost, the impact of the service would be included in post-campaign reviews with stakeholders going forward.
The DoA&M explained that the College had a positive ‘story’ to tell and the future marketing of the College would accentuate its benefits to students. The Committee wholly supported this approach.
24/20 Management Accounts - 1 August to 30 April 2020 (Appendix – Agenda Item 6)
The Committee considered a report (previously circulated) with respect to the management accounts for the period to 30 April 2020, which highlighted the key results, measures and risks.
The Committee reviewed the Accounts and noted that the outturn EBITDA had been reforecast taking into account the COVID-19 pandemic lockdown based on the February 2020 (Period 7) results. The detailed assumptions underlying this reforecast had been reviewed at a Special Board meeting held on 20 April 2020 (Board Min. No. 31/20 refers). This forecast outlined the expected loss of income (expected to be partially offset by Pay and Non-Pay savings) resulting in a reduction of forecast EBITDA and a revised forecast Operating deficit.
The key assumption in the forecast was that the College would continue with online delivery until the end of the summer Term thereby realising savings to compensate for loss of income. However, the Committee acknowledged that the Government’s announcement that it expected colleges to encourage eligible students to return from 15 June 2020, would affect these anticipated savings.
The Committee reviewed the key changes to the forecast outturn –
- The West Midlands Combined Authority (WMCA) had, since the preparation of the accounts, informed the College that it would not terminate its contract and would continue to fund into 2020/21 (although the impact of the loss of the contract had been modelled by the College and the adverse anticipated claw-back remained in the present forecast);
- Estates and other costs had increased to reflect the likely increase in operating costs from any wider opening of the College in June and July 2020;
- The College had made supplier payments to bus companies in line with Government expectations as set out in PPN20 Guidance. Payments had been negotiated to take account of bus company actual losses after any mitigation of these through the Government Furlough Scheme;
- Two months of Furlough pay costs reductions had been included in the pay forecast. This was offset by a review of the current pay run rate and the addition of anticipated higher pay settlement costs (equivalent to c1.8% in 2019-20, compared to the budgeted 1.5%).
- Forecast Apprenticeship income had been improved to reflect the increased confidence in the College’s ability to continue delivery of the off-the-job training to apprentices and to support them to complete in-year. The revised forecast had also been updated to reflect the very limited experience of apprenticeship redundancy or withdrawals on the College’s on-programme funding and an updated estimate of likely achievement from zero to 45% of current potential achievement.
In response to a questions, the FD –
- confirmed that the College was working closely with SBC to maintain apprenticeship delivery to keep apprentices on programme and completing;
- reported that all levels of the organisation had responded positively to requests to reduce discretionary spending, which has been observed throughout the lockdown period. He was now looking to support Budget-Holders to utilise their budgets effectively to prepare for 2020/21;
- confirmed that positive student recruitment in September 2019, would feed through into 2020-21 revenues; however this had led to higher in-year pay costs than planned in some curriculum areas due to the need to increase the number of groups and to provide additional, unfunded support to students.
- The Principal/CEO advised the Committee that both the Association of Colleges (AoC) and the Sixth Form Colleges Association (SFCA) were lobbying the Government to provide funding security to the sector going forward.
Resolved: That, having considered the report, the Committee received the Management Accounts to 29 February 2020.
25/20. Estates Update (Confidential Appendix – Agenda Item 7)
The Committee reviewed the confidential termly estates report which provided a summary (previously circulated) of key activities and developments in respect of the estate, and discussed in particular -
- the severe flooding in the town centre during the week commencing 23 February 2020, resulting in the closure of the English Bridge and Welsh Bridge campuses to the potential threat to staff and students until Friday, 27 February and the cost of damage to the basement of the English Bridge Campus. The Committee reviewed the risk reduction actions taken by the College to prevent or reduce a reoccurrence of such extensive flooding damage.
- an extensive update on the College’s estates and facilities arrangements during the Coronavirus pandemic. The Senior Leadership Team had undertaken separate COVID risk assessments and kept these under review as the situation developed. When, in line with Government requirements, the College was closed to students, London Road Campus was identified as the best location to support vulnerable students with the Higher Education Centre being used as the base. All other buildings were closed and the site shut down as much as possible. Separate COVID risk assessments were undertaken to ensure the safe operation of the HE Centre for this activity; these being updated as required. In addition, separate site security assessments including safeguarding were undertaken. Site inspections were arranged to ensure both English and Welsh Bridge campuses were secure and re-opening activities required prior to re-occupation identified. All estates maintenance activity had been put on hold other than safety maintenance and servicing activities which had continued throughout the lockdown period to ensure that all plant and equipment remained safe and any plant where routine compliance checks were required had been appropriately tested or inspected.
- previous reports that capital expenditure was constrained for 2019-20, meaning that estates improvement activity was limited to only those most urgent areas and cash neutral projects. The Committee reviewed the significant issues and opportunities facing the College and acknowledged that, due to the funding rate increase in 2020-21, the projects were affordable if required. It was noted that the outcome of the College’s CIF bids for plumbing renewal at the English Bridge Campus and London Road Campus Main Block windows replacement had been delayed by the Coronavirus pandemic with announcements now due in June 2020. The Committee understood that the current pandemic disruption could also significantly impact the delivery and feasibility of the plumbing renewal project given the current need for social distancing.
- the latest projects undertaken in the College’s ongoing review of campus access and safeguarding. Following the recent Ofsted inspection and the consequential need to reassure students and staff –
- a permanent security presence on the London Road and Welsh Bridge campuses during core operating hours was added;
- an independent security review was commissioned to verify whether planned improvements for London Road and Welsh Bridge campuses were proportionate and appropriate to these settings. The review’s draft conclusions are that limited improvements were required to the Welsh Bridge Campus and confirmed planned access control modifications at the English Bridge Campus that have since been completed.
- The security review also confirmed the College’s site security goals of improving access control on building entrances at the London Road Campus and proposed further possible improvements to limit car and pedestrian access to the campus from the London Road side. The review had also identified a few areas which would benefit from additional external lighting and one overflow car park area, and an area near the Sports Centre where lighting should be reviewed and improved.
The Committee supported the implementation of these recommendations.
- proposals to install solar panels to reduce the College carbon footprint and energy costs using the London Road Campus roof area, including projected reductions in energy consumption, payback on initial net investment and grant funding opportunities. Having considered these projections, whilst the Committee supported the proposal, it required sight of the funding strategy and requested that the FD submit the Business Case details for review.
ACTION: FD TO SUBMIT BUSINESS CASE TO COMMITTEE MEMBERS
- the COVID pandemic would have a significant impact on the wider economy and potentially on funding in 2020-21. There was also an inherent tension between investing in estates projects and ensuring that the College had sufficient funds going forwards given this uncertainty. Equally, it was unknown to what extent medium or long term changes would be required to campuses as a result of the requirement for increased social distancing.
- the timing of the Advanced Manufacturing Engineering and Automotive Expansion Project now meant it was unlikely that the capital budget would be exceeded and CIF matched funding contributions required for the London Road Main Block Windows Project and the English Bridge pipework renewal projects would now fall into 2020-21. Delivery of these projects would however be challenging within normal timescales due to the ongoing pandemic. The Committee sought assurance that the Automotive project would be fully utilised against projected enrolment numbers. The Principal/CEO replied that, on analysis, there appeared to be no reduction in demand in specialist areas. The greater risk to full utilisation was the need to make adaptations to the site from September 2020, in view of the ongoing situation regarding Covid-19 and the possible additional pressure if students could not complete by the end of 2019/20.
Resolved: That the Estates Report be noted.
26/20. Health & Safety Update (Appendix – Agenda Item 8)
The Committee received the quarterly report on Health and Safety across the College for August 2019 to December 2019 (previously circulated). The H&S Link Governor had received the report prior to the meeting and was satisfied that it be submitted to the Committee.
The Committee reviewed -
- Fire Risk Assessments and action plans;
- Health and Safety Audit outcomes;
- Accidents and incidents;
- The impact of Storm ‘Ciara’ on the Welsh Bridge Campus, due to the roof of the Quarry Swimming Pool (adjacent to the Welsh Bridge Campus) being severely damaged causing debris to be blown into the Campus car park area at the height of the storm and the health and safety precautions taken as a result;
- The impact of the flooding to the town centre in late February 2020, and the closure of both English Bridge and Welsh Bridge campuses to ensure safety of staff and students;
- An extensive report and timeline on the impact of the Covid-19 Pandemic on the College -
- the College had followed Public Health England guidance to ensure the continued safe operation of campuses at all times. In the lead-up to the Government decision to close schools and colleges with effect from 20 March 2020, the Senior Leadership Team had reviewed events and guidance updates daily;
- A detailed report and timeline of the College’s approach to COVID-19 Risk Assessment, to document the College’s approach to managing the evolving Coronavirus risks. This approach had been complimented with supplementary additional risk assessments specifically for cleaning activities for Estates staff. A separate Risk Assessment for Staff with Health Conditions had also been undertaken to document and formalise the College’s approach to homeworking health and safety during the COVID-19 pandemic. Following the Government decision to close schools from the 23 March 2020, the College had reviewed and updated its homeworking policy and a separate homeworking Risk Assessment was subsequently undertaken to document and formalise the College’s current approach to homeworking health and safety during the COVID-19 pandemic. A separate Risk assessment had been undertaken to ensure appropriate social distancing, cleaning and other measures required were in place, to ensure that the HE Centre remained a safe and compliant space from which to provide support to the limited number of vulnerable students needing to access the campus. Separate procedures had also been put in place to ensure that staff needing to access campus sites did so in a safe manner and maintain social distancing and compliance with other Government guidance.
The Committee welcomed the extensive report and directed that the Health & Safety Report be circulated to members of the Board. The FD was currently undertaking extensive risk assessments to prepare for the wider-opening of the College from 15 June 2020. An external consultant had been engaged and would be assessing the campuses with the FD. The Principal/CEO advised that the wider opening plan would be submitted to governors for review and approval. The College was planning to arrange student attendance to prioritise key groups within the overall 25% limit.
ACTION: CLERK TO CIRCULATE HEALTH & SAFETY REPORT TO ALL BOARD MEMBERS
- An incident at the London Road Campus, when two members of the public commenced a roof-top sit down protest on a building which was both not being used for any form of student activity and was a significant distance away from the building where Vulnerable Students were studying. The Police subsequently detained and intend to prosecute these individuals. No students were at risk at any point. The Committee sought assurance the College’s health and safety arrangements were robust. The FD reported that, having reviewed the safety and security arrangements in place, the College remained of the opinion that current supervision and security arrangements were adequate and that, due to the scale and nature of the campus and the clear intent and prior preparation by the intruders, that additional on-site patrols or similar security measures would be unlikely to have prevented this occurrence.
- The appointment of a new Health and Safety Officer.
Resolved: That the Health & Safety Termly Report be noted.
27/20. Treasury Management Delegated Authorities (Appendix – Agenda Item 9)
The Committee considered a report (previously circulated) setting out a request to approve Treasury Management delegations and parameters.
Having considered the report, the Committee
Resolved: TO RECOMMEND TO BOARD the following parameters regarding the exercise and authority of the Principal/CEO and Finance Director to undertake the following treasury activities:
- To negotiate and agree overdraft facilities up to a maximum of £750,000 without the requirement for further approval from the Committee or Board.
- To agree permanent variations to existing borrowing facilities up to a maximum of £300,000 on behalf of the Corporation without the requirement for further approval from the Committee or Board.
- To agree variations to existing loan covenants with lenders as may be required to ensure continued compliance with loan covenants from time to time.
Any planned and actual changes to overdraft facilities and borrowing facilities shall be reported to the members of the Finance & Business Operations Committee in a prompt and timely manner, and in advance of any proposed commitments. Where necessary such communication of proposed changes may be by email and between scheduled Committee meetings.
The Chair of the Finance & Business Operations Committee, or Chair of Governors may at any time withdraw, amend or temporarily suspend these parameters by stating this withdrawal in writing to the Principal and Finance Director.
The scope of variation consists of:
- To agree the deferral of loan repayments for existing loans, where the total loan repayment (including interest) does not exceed the delegated threshold limit.
- The negotiation of an existing loan repayment period, where any additional interest charge as a result of the loan variation does not exceed 10% of the annual interest charge currently incurred.
- To utilise windfalls or philanthropic donations to repay in-part or in full existing borrowings to mitigate interest charges or to improve the overall financial position of the College Group.
ACTION: CLERK – ITEM TO BOARD
28/20. Committee Impact on Strategic Goals
The Board Chair explained that, going forward, each ‘core’ committee and Board would, at every meeting, review the College’s Strategic Project Plan (circulated at the meeting), to assess how the Committee’s work had impacted on the delivery of the projects and in meeting set KPIs.
29/30. Risk (Appendix – Agenda item 9)
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 have either been identified or adequately discussed at the meeting.
30/30. Further Item of Business
The Principal/CEO, in response to a comment from a co-opted committee member, confirmed that he had been received a communication from the Shrewsbury Civic Society regarding the Mount House, Shrewsbury.
31/20. Date of Next Meeting – 30 July 2020 @ 5.30 p.m. Venue – to be confirmed.
Concluded at 7.26 p.m.