Minutes of the Finance Business Operation - 5 November 2024

51/24.  Declarations of Interest

No pecuniary interests were declared.

52/24.  Election of Chair

Resolved:  That M. Hartland be appointed Chair of the Committee.

M. Hartland in the Chair.

53/24.  Appointment of Vice Chair

Deferred until next meeting.

54/24.  Minutes of Meeting Held 01 October 2024 (Appendix – Agenda Item 4)

Resolved:  That the Minutes of the meeting held on 01 October 2024, be approved as a true and correct record.

55/24.  Matters Arising

None.

56/24.  Period 2 Management Accounts (Confidential Appendices - Agenda Item 6)

The Committee received the Period 2 Management Accounts (previously circulated).  The Accounts had been circulated to all governors.  The difference between the Budget position and the Forecast out-turn related primarily to –

• High Needs Element 3 Income expected to be substantially lower than planned due to fewer students with High Needs being recruited. The Committee enquired about actions being taken to manage the reduction in income.The EDoF explained the college would take a considered look into how High Needs support was resourced, to ensure that the students continued to receive the appropriate level of support whilst managing costs effectively.
• HE Income lower than planned. In response to the Committee’s enquiries, the P/CEO explained that the marketing activity had not brought about the increase in enrolments hoped for. The college has planned to run an enrolment campaign for courses starting in February 2025, as part of its curriculum planning which provides a further opportunity to make up some of this forecast shortfall.
• Pay costs slightly below budget; however, pay award risks and rightsizing of curriculum resources to meet the increase in 16-18 enrolments were likely to put this under pressure.
• Non-Pay costs running ahead of forecast for this time of year, due to exams registration costs being charged earlier this year.
• The Committee was advised of the DFE decision to revert to the original “old” Health scoring system rather than the proposed scoring system against which the college has been measuring its financial health over the past 12 months. The old system included a score for Gearing/Borrowing which increased the college’s Health score. Therefore, using the old scoring system, the approved Budget now resulted in a Financial Health of “Outstanding” by the end of the financial year.  The Committee discussed if this presented a risk to the college receiving less grant funding going forward. 
• The Forecast Outturn EBITDA of <6% would result in the college remaining with a Financial Health score of “Good”.

The Committee also received an update on the 2024-25 Budget & performance to date with respect to –

• 16-19 Funding, Work placement and High Needs E2:
  • 16-18 Funding was lagged and based on 2023-24 actual fundable students. The T Level element of this funding was adjusted in-year for under-recruitment compared to target enrolment numbers. In response to a question, the EDoF confirmed that no adjustment for T level claw-back had been made in the forecast outturn at this stage, as this was not expected to be material because the 2024/25 budget had included lower T level income than had been allocated for 2024/25 by ESFA.
  • Whilst the college anticipated growth funding, no in year growth funding had been included in the forecast outturn at this stage, as it was ‘subject to availability’. The P/CEO reported that generally colleges were reporting growth in student numbers this year
• Apprenticeships
  • Apprenticeship recruitment was on target:
  • There were no concerns at this stage with the ability to deliver the forecast budget.
• Adults (AEB)
  • Enrolments to on-site courses were broadly on plan.
  • The Committee acknowledged the risk that the continued devolution of AEB budgets challenged the viability of the Trades Union Studies national programme.
  • The P/CEO confirmed that that the college continued to monitor closely the financial performance of the college’s main subcontracting partner.
• HE
  • September enrolment was below forecast budget. To mitigate the risk of not meeting the HSIF Grant Funding enrolment targets, further enrolments to HTQ course were planned for February 2025; failure to meet these targets would result in claw-back. The Committee acknowledged that this presented a risk to the budget and agreed that this should be monitored closely going forward.  The P/CEO reported that the college had recently appointed a new HE Director who had a track record of increasing enrolments; nevertheless, the lack of growth in HE enrolments presented a strategic risk to the college.  The Committee agreed to monitor the contingency plans put in place to mitigate the impact of potential clawbacks. 
• Pay
  • FTE headcount as at the end of September 2024, remained slightly below budgeted levels; however there remained numerous pressures for additional hours. Any requests were scrutinised closely by SLT and curriculum leaders’ challenges to provide alternative solutions where possible.
  • The decision to award schools a funded 5.5% cost of living increase would place additional pressure on colleges (for whom there was no additional funding). The approved 2024 - 2025 budget allowed for a cost-of-living increase of 3%. The Committee observed that an unfunded 5.5% pay award would be unaffordable for many in the sector. The NEU was balloting for strike action on this matter which could result in disruption to teaching delivery.
  • The college also now had to manage the impact of the increase in the employer National Insurance contributions announced in the recent Budget.
• Non-Pay
  • There would be continued pressure on exams fees for 2024/25 from higher student enrolment and increased exam fees. This would be kept under review.

The Committee acknowledged that, whilst the revised 16-19 funding settlement was likely to be more positive, as was the high-value apprenticeships activity, there was still a risk in delivery of the approved Budget due to the possibility of continuing inflationary costs, unfunded pay pressures, increased exam fees and lower than planned recruitment to HE, resulting in clawback of grant funding. 

57/24. Health and Safety Annual Report 2023 – 2024 (Appendix – Agenda Item 7)

The Committee reviewed the Termly and Annual Report on Health and Safety across the college for August 2022 to July 2023 (previously circulated), which provided an update on Health and Safety and included an Assurance Statement about the Board’s responsibilities for health and safety.

The Committee in reviewing the reports particularly noted the following -

• All sites’ Fire Risk Assessments had been audited by an external service, with low-risk remaining action points being implemented.
• Annual Invacuation/Lockdown drills were completed annually, with no significant issues raised.
• Health and Safety Audit outcomes. Key findings had been remedied quickly, with outstanding items followed-up.
• There had been no RIDDOR reportable events during the reporting period.
• A new procedure for reporting Accidents and first aid calls had been implemented to all first aiders making it quicker, easier and removing all paperwork.
• All health & safety incidents and near misses were analysed for any trends or training needs; no unexpected issues or unplanned additional needs had been identified during the period.
• Risk assessments were continually reviewed and adjustments made where required to ensure the continued safety of all staff, students and visitors.
• All college procedures had either been reviewed or were in the process of being so, by the Health and Safety Manager and Executive Director of Finance.

The Health & Safety Link Governor had reviewed the report prior to submission to the Committee and had submitted comments and questions, to which the EDoF had responded.  The Link Governor commended the college for its decisive and pro-active response to the recent surface water flooding incidents across the region to ensure that all students were able to get home safely despite disrupted transport, and examples of the Health & Safety Officer working with students mitigate health & safety concerns.  The Committee acknowledged the ongoing work being done by the college after vaping had been banned from all campuses.

In response to questions, the EDoF explained that –

• whilst the college had sufficient first aiders, it would always welcome more recruits, to ensure an even response to incidents. The H&S Manager continued to work with the First Aiders to ensure they felt supported and recognised; an honorarium continued to be paid monthly in recognition. The Committee acknowledged that the majority of incidents referred to first aiders as a precaution were related to anxiety or well-being related issues and no first aid was administered.  The college had an extensive safeguarding reporting procedure, to ensure that any vulnerable students were identified and the appropriate support given.
• although there had been a recent notable accident involving a student, a thorough review of the accident had not identified any areas where the college could improve its training and procedures.

The Committee acknowledged that the Draft Health & Safety Policy had no major changes for 2024 – 2025.  The Annual Health & Safety Policy Statement would also be signed by the Board Chair and Principal/CEO at the December Board meeting.

Resolved:  That, having considered the report, the Committee RECOMMENDED TO BOARD that the Health & Safety Annual Report and Policy be approved.

ACTION: Report to December Board. 

Board Chair and P/CEO to sign 2024 – 2025 Health & Policy Statement at December Board meeting.

58/24.  Estates Update (Confidential Appendix, Agenda Item 9)

The Committee reviewed an assurance update on the key developments and activities undertaken to maintain and improve the college estate (previously circulated).

The existing Performing Arts building and the G Block structure at London Road Campus had been identified as the priority areas for condition improvement and refurbishment.  The EDoF explained replacement of the roof structure of the Performing Arts building was scheduled for the Summer of 2025.  A Condition Improvement Grant bid would be submitted seeking funding to support the costs, requiring a commitment to provide match funding of up to 30% of the cost of replacement.  The project for summer 2025 would potentially also include redecoration and internal remodelling to create additional teaching classrooms. 

The recent open evenings across all campuses had seen an increase in individual visits on 2023, indicating the continued pressure on the estate and need for more space, if student enrolments continued to rise into 2025.  The P/CEO explained that this potential growth would be factored into future capacity planning decisions.  To determine whether there were opportunities for greater efficiency a ‘space audit’ would be undertaken this Term.  The Committee enquired if the space audit would encompass other areas like administrative offices and common spaces and if the audit identified a need for additional space, were there any alternatives to construction being considered, such as partnerships with other institutions. 

The Committee received an update on possibilities for development of parcels of land within the college’s ownership.  The local planning authority had indicated it would require full feasibility studies to provide further guidance.  The EDoF had approached informally potential specialist providers to ascertain their skills and ability to support the college to progress the project.  Prior to or shortly after formal appointment and engagement of any advisor, formal governance arrangements regarding the key decisions required during the process would need to be determined and confirmed.

59/24.  Risk (Appendix - Agenda item 10)

The Committee examined those risks within its remit and agreed that they had either been identified and adequately discussed at the meeting.  The EDoF explained that SLT was had reviewed the Risk Register and the revised 2024– 2025 Strategic Risk Register would be presented to the Board for approval at its December meeting.

Going forward, all committees would receive the latest relevant extracts from the ‘live’ 2024/25 Strategic Risk Register, to ensure they were kept up to date with risk mitigations and risk score movements.

60/24.  Date of Next Meeting – Tuesday, 03 December 2024 from 5.30 p.m.

The meeting concluded at 7.38 p.m.