Minutes of the Finance & Business Operations - 4 October 2021
|Group||Minutes of Finance & Business Operations Committee|
|Location||HELD BY REMOTE ACCESS THROUGH MICROSOFT TEAMS AND IN ROOM A.41, LONDON ROAD CAMPUS, SHREWSBURY|
|Date||4th October 21|
|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). |
In attendance in Room A.41
D. Pulford, J. Staniforth (Principal/CEO) and R. Wilson.
G. Mills, J. Staniforth (Principal/CEO), P. Tucker and R. Wilson.
|In Attendance|| In attendance in Room A.41 |
Member of the Senior Leadership Team:
P. Partridge, Finance Director (FD)
Clerk to the Board, T. Cottee
M. Thompson (at the invitation of the Committee Chair) (for Min. No. 44/21)
In attendance by electronic device
R. Sartain (at the invitation of the Committee Chair) (for Min. No. 44/21)
P. Marsh and H. Rhodes (consultants) (for Min. No. 44/21)
39/21. Declarations of Interest
40/21. Election of Chair
Resolved: That Graham Mills be appointed Chair of the Committee.
Graham Mills in the Chair.
41/21. Minutes of Meeting Held 14 June 2021 (Appendix – Agenda Item 4)
Resolved: That the Minutes of the meeting held on 14 June 2021, be approved as a true and correct record.
42/21. Matters Arising
Minute Number 31/21 – Management Accounts – Period 10
The P/CEO reported that the College had now been allocated £215k Tuition Fee Funding in respect of 2021-22; this was less than in 2020-21, due to changes in how the Education & Skills Funding Authority (ESFA) had calculated entitlement.
43/21. Verbal Update from Finance Director
The Finance Director provided a verbal update on estate improvements made over the summer break, as follows –
- Works to further enhance the security access arrangements across the College’s sites had progressed throughout the summer, including the installation of fencing and access gates to the London Road Campus entrances.
- Addition of entrance gate access controls at Welsh Bridge Campus had also been recently completed and brought into use.
- The programme of security upgrades and installation of access control systems at London Road Campus had been completed.
- English Bridge Campus lower ground floor had been refurbished and substantially improved to create additional specialist teaching spaces for A Level personal tutorial and art and design, including a new ceramics room. Further improvements were planned, with the timescales dependent on the outcome of the bid to the post-16 capacity fund.
44/21. Estates Strategy – Update
The Committee received a presentation from P. March & H. Rhodes, from Peter Marsh Consultants (PMC), on progress of the development of the College’s Estates Strategy.
- P. Marsh explained that, to shape emerging conclusions, the consultant team had Assessed the condition and functionality of the existing estate and current and future space needs and availability.
- Developed broad strategic conclusions which had been discussed at a scoring event held with the Senior Leadership Team, middle managers and a number of governors in June 2021
- Worked up indicative costs and risks for each of the options.
- Supported the College in submitting a Post-16 Capacity Fund bid, the outcome of which was not yet known.
- Maintained a positive dialogue with the local authority, who valued the College as a key partner in the redevelopment of Shrewsbury Town Centre.
The consulting team would now work up the strategic options in more detail, including costings, to discuss with the SLT, prior to submission of the draft final report. In response to a question and request from the Committee, the PMC consulting team agreed to include the net carbon impact of the options presented.
In response to a question, the consulting team confirmed that Department of Education rates had been used when estimating the indicative costs of each option. The Committee observed that any capital project would likely be subject to cost inflation, because of the current scarcity of building materials and this should be mentioned in the report’s commentary.
In response to question and request from the Committee, it noted that demographic projections covered the next five years and that consideration had been given to changes beyond this period but that the impact of aspirational planned development was difficult to quantify at this stage.
A plan for the next stage of work on the strategy would be agreed between the FD and the consultant team, to include reporting to the Governor/Officer Estates Working Group.
45/21. Management Accounts – Period 12 (Appendix – Agenda Item 8)
The Committee considered a report (previously circulated) with respect to the Management Accounts to 31 July 2021, which highlighted the key results, measures, and risks. All governors had been supplied with a copy of the Report
While a number of changes had been made on individual lines, the forecast EBITDA outturn was unchanged overall. The Committee noted the following key changes:
- Removal of contingency in the pay forecast.
- Addition of contingency in apprenticeship income to reflect concerns regarding historic collection and receipt of income due. Any income claimed which did not pass all ESFA validation checks by the R14 claim deadline would not be recognised. Therefore, this contingency had been added in response to concerns regarding prior years’ amounts due in addition to risks to current year income .
- A reduction in final forecast Non Pay expenditure costs.
The Committee acknowledged that utilisation of tuition funding remained a risk. Guidance issued regarding 16-19 tuition fund clarified that any underspend in respect of activity in 2020-21, needed to be carried forward and used in 2021-22. Any remaining underspend of this funding would be clawed back at the end of 2021-22. While this meant that there would be no claw back of cash in 2021-22, any underspend would need to be recognised as reduced income to reflect the actual amount not utilised. The amounts not utilised in 2020-21, needed to be quantified as part of the year end process. Lockdown activity this year meant that it had been difficult to undertake some of this desired activity and until quantified, this remained a risk in the forecast.
In response to a question on AEB delivery, the FD confirmed that the College was projected to repay c.£200k of the allocation paid to the College.
Regarding AEB delivery, the FD confirmed that there was an opportunity to submit a business case to the ESFA for Colleges who had delivered less than 90% of their allocations. The College was reviewing its position to submit a case for not having funding provided clawed back. At present, the accounts forecast presumed that this funding would be clawed back.
In response to a question, the FD confirmed that pay costs for July 2021, were below budget, primarily due to lower agency costs and contingency held in the budget and lower than anticipated staff costs.
In a response to a question, there was no significant net risk to the 2021-22 pay budget from the Social Care levy as this rise in national insurance costs and the likely pay award would fall within the allowance for pay increases.
In response to a request from the Committee, the FD agreed to include, either within the next estate update report or the management accounts, progress of the College’s various bid submissions.
Resolved: That, having considered the report, the Committee receive the Management Accounts to 31 July 2021.
46/21. Draft Committee Work Plan 2021 – 2022 (Appendix – Agenda Item 9)
The Committee reviewed the Draft Workplan for 2021 – 2022 (previously circulated), which continued the increased number of meetings introduced during 2019 – 20, to maintain focus on the financial stability of the College.
Resolved: That the Draft Workplan be agreed.
47/21. Terms of Reference of Committee – Review (Appendix – Agenda Item 10)
The Committee reviewed the current Terms of the Committee (previously circulated) and agreed that they remained pertinent to the Committee’s role.
48/21. 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.
49/21. Date of Next Meeting – 02 November 2021 at 5.30 p.m. Venue - TBC.
The meeting concluded at 7.26 p.m.