01/20. Declarations of Interest
R. Heath declared a standing interest as an employee of Harper Adams University.
02/20. Minutes of Meeting Held 03 December 2019 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 03 December 2019, be approved as a true and correct record.
03/20. Matters Arising
None.
04/20. Management Accounts - 1 August to 31 January 2020 (Appendix – Agenda Item 5)
The Committee considered a report (previously circulated) with respect to the management accounts for the period to 31 January 2020, which highlighted the key results, measures and risks. All governors had been supplied with a copy of the Report.
The Committee reviewed the Accounts and particularly noted that the outturn EBITDA year to date was forecast to be slightly ahead of budget, which had increased the Financial Health Score by 10 points.
The key threats currently facing the College were reviewed and discussed –
- the reputational damage and the financial risks caused by the November 2019 Ofsted inspection and past and ongoing strike action over national pay by the NEU. The Principal/CEO explained the additional costs that had been forecast to reflect expected additional expenditure resulting from the Ofsted Inspection.
- a significant risk remained in reduced 16-18 enrolments in September 2020, which due to the lagged nature of 16-18 funding, would impact on income in 2021-22. Depending on the severity this could have a significant impact on the College’s financial health in 2021-22. Offsetting this risk was the positive impact of the increased funding rate, which the College will benefit from in 2020-21.
- An emerging risk was the financial and wider implications of closing the English and Welsh Bridge campuses due to flooding in Shrewsbury. The Committee acknowledged that the College would incur additional, unplanned expenditure to manage the impact of the closures, which might include providing additional teaching to students.
The Committee also reviewed and discussed the key changes to the forecast outturn –
- 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.
- Regarding AEB own delivery, the Finance Director reported that the College was not generating the levels of activity anticipated in the West of England. As a result, distance learning activity had been refocussed to utilise the WECA allocation to compliment the functional skills work performed to date. The Committee received an update on the risks regarding AEB delivery going forward, namely, the potential loss of contract allocations from devolved regions and the potential loss of ESFA ‘carry-in’ allocation.
- The College had received confirmation of the success of the ROATP renewal application, allowing the College to continue to deliver apprenticeships from March 2020 onwards.
- Regarding subcontracted apprenticeships, the College continued to support two providers to deliver their apprenticeship provision, with new starts in January 2020. This had added to the forecast income with a corresponding increase in subcontractor costs. The Finance Director provided a verbal update on the College’s efforts to support an apprenticeship subcontract partner who had overlooked the need to apply to renew its Registration on ROATP. The Committee sought assurance about how the College was working with the partner and the ESFA to support delivery to affected apprentices, including if necessary, transferring them onto provision delivered directly until such time as the subcontract partner was successful in regaining its ROATP registration.
- Regarding additional learner support: High Needs, the Chair sought assurance on how the College could manage the financial impact of the College attracting increasing numbers of “high needs” students with additional support requirements. The Finance Director explained the funding arrangements for High Needs students and the Principal/CEO confirmed that the Additional Learning Support Manager worked closely with councils to ensure the College received the appropriate funding. The College continued to invest in additional teaching assistant support and the Committee was advised that the College was in discussions with Shropshire Council over future SEN provision at the London Road Campus, which would require estates works. The Committee acknowledged that as the numbers of high need students increased, there would be an overall impact on the College and its facilities in terms of new, unfunded cost pressures and this would include pressure of accommodation at London Road Campus.
- The Chair challenged the shortfall in other full-cost tuition and exams fees. The Finance Director explained that some of this was timing differences between the budget timing and actual income recognition. However, the underlying reasons for the shortfalls appeared to be primarily lower than planned group sizes, in some curriculum areas and a reduction in the number of forecast overseas students. Where possible, all areas needed to focus up delivery of additional full cost activity to address this budget shortfall.
- Regarding Capital Expenditure, the Finance Director advised that the College had recently received confirmation that it had been awarded £200k towards its bid for a new Automotive Training Centre at the rear of the London Road Campus, which allowed the College to expand its currently constrained Engineering Workshop at the site. This project would largely fall into the 2020-21 capital program as unplanned capital expenditure. As the intention was to develop this new facility to attract high-value students, as quickly as possible, a significant element of this expenditure would be required in 2019-20. The Vice Chair queried how the College expected to deliver this project within 2019 – 2020 and was advised that it would be project-managed jointly by the Finance Director and Curriculum Leader, Engineering. The project offered an opportunity to deliver high quality provision in partnership with local employers
- Regarding cash flow & loan covenant forecast, the Finance Director advised that there were no significant changes anticipated since the last cashflow forecast with no immediate requirement to use the pre-arranged short-term loan facility. The Committee asked to see the cash days in hand forecast.
Resolved: That
- having considered the report, the Committee received the Management Accounts to 31 January 2020; and
- RECOMMEND TO BOARD that additional capital commitment in the sum of £186k for the Deal 3 Advanced Manufacturing, Engineering and Automotive Training Centre Project at the London Road Campus be approved.
05/20. Health & Safety Update (Appendix – Agenda Item 6)
The Committee received the quarterly report on Health and Safety across the College for August 2019 to December 2019 (previously circulated) and noted in particular -
- The Health and Safety Officer continued with the programme of departmental audits focussing on the health and safety high risk areas. Outcomes of the Health and Safety Audits were recorded in an Audit Report which contained an Agreed Action Plan. This was then monitored and followed up by the Health and Safety Officer within an agreed timescale to ensure the matters identified are addressed accordingly. The Committee queried the number of ‘critical and ‘important’ findings. The Finance Director assured the Committee that the Officer had an exacting standard for findings and that all identified actions have been dealt with.
- The Committee sought assurance the College’s health and safety arrangements were robust after reported incidents of children on the roof of buildings at the London Road Campus. The Finance Director explained that anti-climb deterrent, signs and fixtures had been installed in response.
06/20. Estates Update (Confidential Appendix – Agenda Item 7)
The Committee reviewed the confidential termly estates report which provided a summary of the estates’ improvement projects completed during the previous term (previously circulated) and key activities and development in respect of the estate.
The Committee noted progress with respect to estates work undertaken across the campuses, including the completion of the lightweight suspended ceiling in The Hub at the London Road Campus and campus access arrangements at all three campuses.
The Committee acknowledged that, to provide additional assurance to stakeholders, the College would need to make changes to building and campus access. An external review of campus access and security arrangements was being commissioned to ensure that proposed changes are proportionate and appropriate. Any investment in campus security required would also be unplanned additional capital expenditure.
The College had applied for two Condition Improvement Fund (CIF) grants at the London Road Campus, and to renew the increasingly corroded pipework throughout the heating system at the English Bridge Campus. The Finance Director explained that the deteriorating condition of the pipework at English Bridge presented a potentially significant threat to business continuity, which would only increase over time and had therefore been added to the Risk Register.
Resolved: That the Estates Report be noted.
07/20. Marketing Update – Verbal Report
The Principal/CEO reported that Mike Needham had been appointed Director of Admissions and Marketing from a strong field of candidates.
08/20. Risk
As part of the discussions on the College’s Risk Register and Board Assurance Framework agreed by Board (Board Min No. 67/17 refers), the Committee examined those risks within its remit to ensure that they have either been identified or adequately discussed at the meeting.
The Committee concluded that the risks connected with the Committee had been identified and discussed, particularly –
- key financial threats currently facing the College. It agreed that Strategic Risk Register No 2.1 be amended to include reputational risk;
- the emerging threat of the closure of the English and Welsh Bridge campuses due to flooding; and
- the deteriorating plumbing system at the English Bridge Campus.
09/20. Chair of Committee from Next Meeting
The current Committee Chair explained that, in accordance with the Committee Chair Succession Plan, it was anticipated that he would step down as Committee Chair after this meeting.
Having been proposed by G. Channon and seconded by R. Wilson, it was AGREED that R. Heath be appointed Chair of the Committee with effect from 31 March 2020.
10/20. Date of Next Meeting – 31 March 2020 @ 5.30 p.m. Venue – Priory House, Welsh Bridge Campus.
Concluded at 7.16 p.m.