Minutes of the Finance & Business Operations - 6 July 2021
|Group||Minutes of Finance & Business Operations Committee|
|Location||HELD BY REMOTE ACCESS THROUGH MICROSOFT TEAMS|
|Date||6th July 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). |
G. Mills (Chair), D. Pulford, J. Staniforth (Principal/CEO) (until 6.35 p.m.), P. Tucker and R. Wilson.
|In Attendance|| In attendance by electronic device |
Members of the Senior Leadership Team:
D. Lucas, GVP – HR & Development GVP – HR&D) (until 6.35 p.m.)
P. Partridge, Finance Director (FD)
Clerk to the Board, T. Cottee
28/21. Declarations of Interest
The Clerk to the Board declared an interest in Minute Number 32/21, as a freelance consultant for Mosaic Health & Spas, which managed the Sports Centre at the London Road Campus.
29/21. Minutes of Meeting Held 25 May 2021 (Appendix – Agenda Item 4)
Resolved: That the Minutes of the meeting held on 25 May 2021, be approved as a true and correct record.
30/21. Matters Arising
Minute Number 21/21 – Management Accounts – Period 9
The Committee had requested an analysis of changes to core 16-19 funding from 2019-20 onwards (previously circulated). The FD explained that the report showed the student numbers year on year and that 16-19 Core funding was calculated on a “Lag” (one year in arrears) basis using actual student data in respect of the prior year.
The following factors also applied to the basic funding per student:
- To reflect the fact that not all students completed their courses, a “Retention Factor” was applied to the funding rates based on the number of withdrawals in the previous year.
- A “programme weighting” was also applied to increase funding for courses where higher delivery costs were recognised.
- Extra Funding was allocated for students doing English and Maths
- Extra Funding was allocated for students from a disadvantaged background
- High Value course premiums were applied to courses where the department for education wished to incentivise providers to enrol to such courses.
The report also identified the additional in year funding that had been allocated in 2020-21, which was not expected or budgeted to recur.
The Committee reviewed the movement in these factors year on year and the key funding allocations.
31/21. Management Accounts – Period 10 - 31 May 2021 (Appendix – Agenda Item 5)
The Committee considered a report (previously circulated) with respect to the Management Accounts to 31 May 2021, which highlighted the key results, measures, and risks. All governors had been supplied with a copy of the Report.
The Committee reviewed the key changes to the forecast outturn –
- The forecast outturn had improved, principally due to reimbursement of costs incurred for the mass testing of students between 5 and 20 March 2021, received in May and included in this month’s reforcast. There remained some potential upside in the forecast due to the exceptional nature of this year.
- As previously reported, the Education & Skills Funding Authority (ESFA) had provided an in-year growth allocation for core 16-18 year old funding to reflect the exceptional in-year growth in student numbers and additional funding premium for high value courses, driving the significant favourable variance for the year.
- The ESFA intended to claw-back any delivery under 90% of our Adult Education Budget (AEB) allocation for 2020-21. This would result in a clawback in December 2021, depending on the final amount delivered in respect of the financial year ending in July 2021. This was included within the forecast outturn and had also been factored into the forecast cashflow for next year.
- The impact of ongoing strike action in June 2021, had not yet been factored into forecast and whilst this was expected to reduce pay costs, might adversely impact AEB delivery further.
In response to a question on sub-contracted AEB delivery, the FD explained that the College retained c.20% of the funding received as part of the sub-contractor agreement; this offset the costs of managing the sub-contractor partnership. The College’s approach to sub-contracting was proportionate in that the College only worked with providers who offered good quality, high value programmes which supported students to progress and gain qualifications.
In response to a question, the FD confirmed that the College was not continuing Free School Meals provision over the summer break.
In response to a question, the FD explained the grant creditor profile, which was based around timings of payments received from the ESFA.
The Board Chair referred to the favourable variance and Health Score and congratulated the College on its prudent financial management during a challenging year.
Resolved: That, having considered the report, the Committee receive the Management Accounts to 31 May 2021.
32/12. College Financial Forecast and Draft Budget 2021/22 (Confidential Appendix – Agenda Item 6)
The Committee reviewed the Draft Budget and revised two-year Financial Plan, prior to consideration by the Board (previously circulated).
The FD explained the following key points -
- The Plan for 2021 – 22, that the College submitted as part of its 2020 – 21 Budget and Plan had assumed that the number of 16 – 19 learners would decrease in view of the then recent OFSTED Inspection report and the possible resulting impact on enrolment and staffing requirements. However, the College had seen significant student growth and this had required the College to take on additional staff. The College had recently concluded a major recruitment project to staff the anticipated increase in student numbers expected from September 2021.
- The draft budget therefore, reflected the ongoing challenges considering the continuing impact of the current Covid 19 pandemic. It also responded to the significant growth in 16-18 student numbers anticipated over each of the next two years. This growth required a financial strategy of investment in teaching and capital costs.
- The Budget allowed for capital expenditure of £1,400k in 2021-22. Of this capital funding, grants of £80k had been assumed in respect of installation of solar PV panels at London Road Campus. No additional grant funding had been assumed in respect of the capital costs of new security fencing also at London Road Campus. The FD explained that the security fencing would extend to include the rear boundary of the London Road site.
- 2022-23 capital expenditure assumed the need for significant campus improvement work. The College had submitted a bid for a Post 16 Capacity grant to redevelop and increase teaching capacity at the English Bridge Campus. If awarded this would result in substantial in-year additional capital expenditure with 85% of this funded by the grant. The College contribution would be funded from cash reserves, supplemented by additional short-term overdraft facilities during February to April.
- The FD explained that the Budget still reflected the College’s prudent approach to financial management, particularly safeguarding cashflow.
The Committee reviewed the College’s financial objectives, documented as part of the 2017-18 budget setting process and noted that they had all been met. The Committee also acknowledged that the proposed budget met these objectives.
In response to a question from the Committee Chair on the reasons for the increase in applications to the College, the P/CEO explained that the College’s Marketing and Admissions Team had worked on its ‘digital first’ strategy in reaching out to potential students. Furthermore, unlike other local further education providers and schools, the College had, where possible, maintained face-to-face teaching throughout the pandemic, which had further enhanced the College’s positive reputation; this appeared to have had an impact on applications.
The Committee Chair sought assurance over the robustness of the College’s Bank covenant arrangements. The FD explained that, based on Budget and planned EBITDA and Capital Expenditure levels, all covenants were planned to be met. Should the Post 16 capacity grant be awarded to the College an agreement for variation of these covenants to provide the headroom to enable the project would be requested. Past discussions with the College’s Bank indicated that this would not be an issue.
The Board Chair requested that the Draft Budget executive summary be amended to include a summary showing 16-19 learners on programme.
Having reviewed the Report, the Committee RESOLVED TO RECOMMEND TO BOARD the Draft Budget and revised two-year Financial Plan, as amended.
Action: Item to Board
33/21. Human Resources Annual Report
The GVP, HR&D presented a verbal report on the Human Resources Team’s activities for 2020 – 2021.
The Committee noted the following in particular -
- The Team’s role was that of a key strategic partner ensuring the College maximised its efficiency and effectiveness whilst having the very best staff for students;
- The Team’s operational plan and objectives would be revised over the summer period to align with the College’s new Strategic Plan;
- Team staffing arrangements had changed during the year; the Team now comprised 4 full time members of staff and 4 part-time members, based over 2 campuses, with 1 member of staff focussed on safeguarding.
- The College’s workforce had increased during 2020 – 21, in response to the growth in student numbers, being one of the largest employers in Shropshire. The recent recruitment project had drawn many applications, with applicants evidently keen to work for the College, citing its positive reputation as a reason.
The Committee was also advised of the Team’s -
- Case management;
- Professional Development Programme outcomes with respect to mandatory development and higher levels of study. The next Sharing Fair would be held on 03 September 2021;
- Communications. In the Loop readership had increased to 70% in year and the weekly P/CEO Staff Briefings had been well-received by staff;
- The Staff Forum was developing and all union representatives had been invited to participate. The Forum had been well-received by staff. The latest Staff Survey had just closed;
- Mental Health & Wellbeing initiatives;
- Sickness absence. The Committee sought assurance on this as sick absence was higher than the AoC Benchmark. The GVP explained that this figure was being scrutinised as Covid absences could be included. In response to a question from the Board Chair, the GVP also explained that long-term sickness was defined as absence through sickness of more than 21 working days.
- Industrial action update. The College remained in dispute with the local branch of the National Education Union (NEU), having completed all stages of the College process for dispute resolution, including several meetings facilitated by ACAS. The focus continued to be on mitigating the impact of any action taken by the NEU, specifically strike action. The NEU’s mandate for industrial action would expire this month and therefore will have to hold a further ballot of their members to take further industrial action in the new academic year.
The Committee expressed its thanks and support to the GVP and her Team for their hard work in supporting staff throughout a challenging period.
The P/CEO left the meeting at this point.
The GVP – HR&D left the meeting at this point.
34/21. Estate Strategy – Update (Confidential Appendix – Agenda Item 8)
The Committee reviewed the latest update (previously circulated) and noted the following –
- As reported previously (F&BO Min. No. 23/12 refers), the College had appointed consultants to support the development of a long-term Estates Strategy designed to ensure that the College could meet the expected growth in 16-19 students. The consultants had undertaken an initial assessment of the College’s campuses, met with Council officials involved with the big town plan, undertaken initial space utilisation and condition assessment work. These findings had been shared with Senior Leadership Team (SLT) and the Staff forum for further feedback. Additional workshops, also attended by the Board Chair and Committee Chair were held on 25 June, to engage with curriculum leaders. While it had been intended to complete the Estates Strategy in July/early August, the College had now requested that the consultants also support the College’s Post 16 capacity fund bid, to expand the teaching space at the English Bridge Campus. Therefore, the Estates Strategy would be completed in September 2021.
- The College had appointed surveyors to act and negotiate on behalf of the College regarding the possible sale of land at Wakeman Playing Fields to the Town Council. On conclusion of negotiations the Board would consider the negotiated heads of agreement to provide Board approval for the disposal of this land.
- There was also a potential opportunity to negotiate with the Town Council for improvements to the Abbey Gardens area of the English Bridge Campus to enable safer more secure access to part of this area by students during college core hours. The Committee supported this strategy to improve students’ experience.
In response to a question from the Board Chair, the FD confirmed that capital projects had been planned across the sites for the summer period. The Committee supported the College’s intention to progress and complete capital projects to improve student experience and meet growth in numbers. The Board Chair observed that the Estates Strategy Working Group should be constituted by the end of the Term, to support the delivery of the Estates Strategy.
35/21. Health & Safety Update (Appendix – Agenda Item 9)
The Committee reviewed the latest report (previously circulated).
The College had encountered five near misses during terms 2 and 3. All incidents had either been subsequently dealt with or would be dealt with during the summer holidays, to ensure they did not reoccur. The Board Chair encouraged the culture of reporting near misses in the College.
The Committee reviewed the College’s continuing arrangements to safeguard staff and students with respect to the Covid 19 pandemic. Following the Government’s announcement in mid-May that face coverings would no longer be a requirement for students, the College took the decision to request students to continue wearing face coverings in corridors and communal areas but not outside. They were also not required to wear facemasks while in classrooms but were asked to respect the wishes of the teachers to wear them if asked.
Since the return to face-to-face teaching in College in March 2021, the College had seen a huge reduction in positive cases amongst students. Due to the resulting reduction in activity, the COVID tracing team had been reduced. Weekly keep in touch meetings continued to be held with the College’s multiple unions’ Health and Safety representatives allowing them to bring any issues/concerns to the attention of the Finance Director, Group Vice Principal – HR & Professional Development and College H&S Officer in attendance. The Committee commended the Health & Safety Officer and members of staff who had volunteered to be part of the College’s Track & Trace team for their tireless efforts in keeping as many students as possible in college, enabling them to continue on site learning. The Support Staff Governor confirmed that the College’s communications to staff regarding Covid have been consistent and clear throughout and that all staff were aware of their responsibilities and the College’s arrangements; the FD and Estates Team had done a great job in supporting staff and students.
36/21. Risk (Appendix - Agenda item 10)
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.
37/21. Committee Evaluation (Appendix – Agenda Item 11)
The Committee Chair advised that the Clerk to the Board would distribute the Committee Evaluation to all members via Microsoft Forms. All committee members were encouraged to complete the evaluation, which would inform development and improvements going forward.
38/21. Date of Next Meeting – tbc.
The meeting concluded at 7.19 p.m.