Minutes of the Finance Business Operation - 8 April 2025

M. Hartland in the Chair.

10/25.  Declarations of Interest

No pecuniary interests were declared.

11/25.  Minutes of Meeting Held 04 February 2025 (Appendix – Agenda Item 3)

Resolved:  That the Minutes of the meeting held on 04 February 2025, be approved as a true and correct record.

12/25.  Matters Arising

Minute Number 02/25 – Appointment of Vice Chair of Committee

It was agreed that going forward the Committee would appoint a Committee Chair for that meeting.

Minute Number 07/25 - College Branding Update

The P/CEO had shared with the full Board the final design selected that had been shared with the Committee at its last meeting.

13/25.  Period 7 Management Accounts (Confidential Appendices - Agenda Item 4)

The Committee received the Period 7 Management Accounts (previously circulated).  The Accounts had been circulated to all governors. 

The Committee noted the following -

• Forecast EBITDA had increased from 6.2% at P5 to 8.2% at P7, resulting in a Financial Health score of Outstanding.
• The Forecast had improved since P5. The key drivers were:
  • the impact of in-year growth funding (£634k).
  • Improved Apprenticeship outturn forecast following inclusion of January 2025 new starts.
  • Full recognition of Multiply and Higher Skills Injection Fund (HSIF) income within education contracts, partially offset by a reduction in Full cost forecast income.
  • Increased non pay costs forecast to reflect the decision to maintain an increased outsourced security team presence going forwards. In response to a question, the EDoF explained the reasons for the decision to maintain a security presence at the English Bridge campus and the London Road campus. The Staff Governor reported that this had had a positive impact on student behaviour and was appreciated by students.
  • As reported to Board at its meeting on 31 March 2025, having completed the calculations of the cost of matching the school and 16-19 academy pay award, and having confirmed that the college could also cover all the additional costs of teaching so many extra students, the college was now able to implement the 5.5% pay award from 1 September 2024, for all teachers and support staff.  This meant that all staff would receive the same pay award as staff in schools and 16-19 academies.

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

16-18 Core funding, Work Placement and High Needs funding

• In year Growth funding had been included in the forecast outturn now that this had been confirmed, as had an estimate of the value of the additional pay grant designed to cover the 5.5% pay increase from 1 April to 31 July. The college was awaiting confirmation of its individual funding allocation for this additional funding grant.
• The value of the NI grant (to offset the impact of the National Insurance increase in April 2025), had not been included in the forecast income nor had the cost of this been adjusted for in forecast pay costs. This is expected to be broadly neutral overall.
• Forecast 16-19 income had been adjusted to reflect in year growth. It was noted that the quantum allocated f had been capped at 2/3rds of the normal calculated growth funding allocation.
• The forecast included the 5.5% pay award from 1 April 2025.

High Needs Element 3 funding:

• Element 3 High Needs funding was paid in-year by local authorities; there remained some potential for additional Element 3 funding that had not been included in the forecast at this stage.
• The EDoF explained that, to date, the second stage payment remained outstanding. The Committee sought assurance that this would not materially affect the college’s funding position. The EDoF explained that whilst the relevant strategic risk score had been raised, he considered that the risks was primarily one of timing and would be mitigated.

Apprenticeship income:

• Forecast on programme funding was now ahead of budget following the January 2025 recruitment window.

Adult Income:

• A second phase of subcontracted procurement / allocation was underway.
• The college was expected to use all its core allocation due to strong delivery by trades union courses in the London region. However, the college expected a degree of funding clawback regarding the free courses for jobs (FCFJ) allocation in this region.
• The college anticipated using all its allocation in the devolved West Midlands Combined Authority and was at risk of over-delivering on courses in this region.
• Distance Learning and Trades Union Studies which comprised of short roll-on roll-off courses, and therefore carried the greatest inherent uncertainty, were forecast to achieve budget.
• In response to a question, the EDoF considered that Distance Learning and Trades Union Studies courses should achieve forecast delivery targets by year-end.

Higher education

• Plans for a further enrolment to the numbers forecast starting in February 2025, on HTQ HE courses had not materialised. The forecast had therefore been reduced further to reflect this lower position.
  
• HSIF Grant funding enrolment targets had now been relaxed; the college now needed to meet enrolment targets in any one academic year for each of the pathways for each year up to 2028. If the college failed to meet HSIF target enrolments over the coming 3 years, then there remained a potential clawback.

Pay

• The net impact of the increased forecast pay award and the forecast Local Government Pension Scheme (LGPS) cost saving was to increase forecast pay.
• As noted above in the consideration of income, no allowance had been made in the forecast for the increase in NI costs from 1 April 2025 at this stage.

Non-Pay

• Subcontracting costs were forecast to be slightly lower than budgeted.
• There would be continued pressure on exams fees for 2024/25 from higher student enrolment and increased exam fees.
• Other forecast increases reflected ongoing cost pressures and higher building maintenance costs.
• Materials costs were likely to increase based on the higher than planned numbers of students.

14/25.  Estates Update (Confidential Appendix, Agenda Item 5)

The Committee reviewed a report (previously circulated) on recent college estates developments and improvements together with plans in development for estates condition maintenance and improvement across the college’s three campuses. The paper also updated the Committee regarding plans for the disposal of surplus land to facilitate future campus improvement and expansion.

The EDoF reported that –

• The installation of ‘stretch tents’ across open spaces to improve student experience at London Road Campus had been completed. The option to install a similar facility at the Welsh Bridge Campus could not be progressed due to Conservation Area planning restrictions.
• Further to FBO Min. No. 06/25. The Committee considered the progress of the college’s review of campus capacity to identify opportunities for further space efficiencies in anticipation of increased student numbers enrolling from September 2025.
  • There had been increased attendance at the recent open evenings. This trend continued to highlight the need for increased space and potentially more efficient use of existing space.
  • Architects had been commissioned to conduct a feasibility study on adding a mezzanine floor within the existing sports hall at English Bridge Campus. The mezzanine project was unlikely to be completed before September 2026, at the earliest.
  • Regarding other projects, investigation was underway to explore covering a significant portion of the courtyard outside the Hub student café to create additional covered social space. Further consideration was also being given to improving the utilisation of the English Bridge basement area.
• In response to a question, the EDoF confirmed that current application levels suggested existing general classroom space would be sufficient for the 2025-26 academic year. However, concerns remained regarding the potential limitation of student numbers in specialist workshop areas in the short and medium term due to insufficient available space.
• A Condition Improvement Fund (CIF) bid had been submitted in December 2024, for funding to support the London Road Campus Performing Arts roof replacement. The potential for adding solar electricity generation capacity to the new Performing Arts roof was also being explored.  The Committee acknowledged the additional capital cost but noted the expected substantially positive commercial payback from solar capacity already installed.
• The Committee also received a further update on possibilities for land disposal.
  • The consultants would attend the Governor Strategy event on April 11 2025, to provide an update on their findings and recommended next steps.

15/25.  Risk (Appendix - Agenda item 8)

The Committee examined those risks within its remit and agreed that they had been identified and adequately discussed at the meeting, in particular -

• Planned Defunding of AGQs.
• T Level Recruitment would remain below minimum target thresholds.
• E3 High Needs support requirement would not be appropriately funded.

The Committee agreed that the greatest long-term strategic risk was that campuses were not sufficient to meet demand.

16/25.  Date of Next Meeting – Tuesday, 03 June 2025 from 5.30 p.m.

The meeting concluded at 6.40 p.m.