Minutes of the Finance Business Operation - 27 June 2023

29/23. Declarations of Interest

None.

30/23. Minutes of Meeting Held 16 May 2023 (Appendix – Agenda Item 3)

Resolved: That the Minutes of the meeting held on 16 May 2023, be approved as a true and correct record.

31/23. Matters Arising

FBO Min. No. 25/23.- Period 8 Management Accounts

The Clerk reported that, as requested by the Committee, a development session on the Management Accounts would be arranged from 5.00 p.m. before the Board meeting on 10 July 2023.

32/23. Draft Fee, Fee Remission and Refund Policy 2023/24 (Appendix – Agenda Item 10)

The VP, Q,A & I presented the Draft Fees Policy 2023/24 (previously circulated) for review prior to recommendation to Board.

The VP reported on the amendments and updates to the 2023/24 Policy –

• • • Minor changes had been made to reflect changes in job titles and increases in fees, where applied.
    • Regarding examination fees and charges, the Draft Policy clarified the position on student resits or qualifications already passed. Qualification resit costs normally charged by the college for all courses at level three and above, would now include resit costs for individual unit examinations where the student had already achieved at least a pass grade. As explained to the Committee at its previous meeting (FBO Min No. 25/23 refers), exam fee charges had been increased by the main awarding bodies; the number of entries for vocational qualification exams had also increased.

In response to questions, the VP confirmed –

• • • • students would continue to be entered for exams and resists at the right time, to ensure the best outcome.
      • Parents would be advised of the amendments to the college’s Fees as part of student induction for the 2023/24 year.

RESOLVED: It be RECOMMENDED TO BOARD that the draft Fee, Fee Remission and Refund Policy 2023 – 2024, be approved.

Action: Item to Board

33/23 Period 10 Management Accounts (Appendices, Agenda Item 5)

The Committee received the Period 10 Management Accounts (previously circulated) in which the EDoF highlighted the key results, measures, and 2023/24 key challenges and risks. The Accounts had been circulated to all governors.

34/23. College Financial Forecast and Draft Budget 2023/24 (Appendices, Agenda Item 6)

The Committee reviewed the Draft Budget and revised two-year Financial Plan, prior to consideration by the Board (previously circulated).
The EDoF gave a detailed presentation to the Committee and explained the following key points –

• • Sources of income, including how the college would spend income generated and the income assumptions made with respect to 2023/24 and 2024/25.
  • Regarding Adult Education, Trades Union activity: This had increased. Subcontracting was delivered through known and proven partners. There was an ongoing need to manage devolved authorities' expectations and contracts.
  • Regarding Apprenticeship income existing apprentices continued with achievable targets for new starts. In response to a question, the EDoF confirmed that the college had the capacity to meet this increase in the short term, but space capacity remained a risk and concern in the medium term.
  • Regarding Pay Expenditure, the Committee acknowledged the impact of continued investment in tuition catch up and student support and assumed pay cost inflation. The Committee noted that each additional 1% variance awarded = c£225k. The Committee supported the college’s approach to investing in teaching staff to support students.
  • Capital expenditure plans, cashflow and Financial Health forecasts.
  • The initial plan for 2023-24, had been impacted by several significant challenges:
    • Lower than anticipated enrolment of 16-19 learners.
    • The ongoing energy supply issues and historically high energy costs.
    • Changes to the Financial Health scoring system makes achieving a Financial Health score of “good” more challenging.
    • The Office for National Statistics (ONS) reclassification of colleges as “public sector” removed the potential for working capital overdrafts or other new borrowing.
    • Exams fee inflation and costs had increased significantly ahead of plan despite lower than student planned headcount.
  • As part of planning for next year and to identify where the impact of these challenges could be mitigated, the Senior Leadership Team (SLT) had reviewed the current in-year position and developed an updated plan for 2023/24. The plan identified new sources of income related to grant funding already secured and known opportunities for growth or new business which are likely to be realised and where teaching resource has been provided. In addition, it had identified sources of and targets for appropriate cost savings. In response to questions, the EDoF confirmed that all goals set had been met, although non-Pay, exams, bursary, transport and materials costs continued to present a challenge and the college would continue to focus on finding efficiencies throughout next year.

The Committee, having reviewed the Draft Budget and considered the EDoF’s presentation, concluded –

• • The 2023-24 year remained challenging with significant risks around pay and non-pay cost inflation.
  • The College financial health score has been temporarily boosted by one off capital grants. Underlying Financial Health was Good, with plans to maintain that rating in 2023/4 and 2024/25.
  • Through prudent management, Cashflow remain sound.
  • Ensuring that planned full cost and other income were delivered was key to achieving the college’s strategic objectives.

The Committee acknowledged the college management’s commitment to meet the revised financial goals, as through these efforts, the college’s financial position was now more favourable than earlier in the year. It was also agreed that the presentation made to the Committee also be circulated to all governors as part of the Board Pack and that the EDoF present a precis of the key points in his presentation to Board.

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 and circulate presentation slides to committee members and include in Board Pack.

35/23. Estates Strategy Termly Progress Report and Capital Bids Verbal Update (Confidential Appendix, Agenda Items 7 and 9)

The Committee reviewed the Estate Strategy Progress Report (previously circulated) and the EDoF presented a verbal update on the capital bids being pursued by the college (FBO Min. No. 05/2 refers).

• • The college had submitted two bids at the London Road Campus for the T Level (wave 5) grant funding stream; the first being the expansion of construction facilities and the second being the relocation and refurbishment of media, health and social care and childcare to better use space in the building and to provide better facilities for students. The EDoF advised that, whilst the first bid had been unsuccessful, the college had been awarded a £620k grant (dependant on a £180k college Contribution) for the second bid. The college contribution put aside for the first bid would be retained in anticipation of expenditure against future projects.
  • Regarding energy saving activities, Electrical and Gas consumption continued to be actively monitored by major circuit on the London Road Campus to identify areas of unusual or unnecessary use and hence opportunities for saving. As a result of this approach, substantial consumption savings have been achieved through the measures put in place over the last 12 months.
  • Consultants had completed the heat decarbonisation plans for the Main Block, Darwin/HE and Performing Arts buildings at London Road Campus , for the Wakeman Building at English Bridge and for the Quarry building at Welsh Bridge. These heat decarbonisation plans were fully funded by a £21k grant from Salix energy efficiency grant. The college had now also secured a further grant of £229k from SALIX to develop the plans further to detailed design stage. These designs would inform and enable the college’s future investments in energy efficiency and decarbonisation of its heating systems.

36/23. Health & Safety Report (Appendix, Agenda Item 8)

The Committee reviewed the termly health and safety report (previously circulated). The Health & Safety link governor had been circulated with a copy of the report.
The Committee noted progress updates against:

1. 1. 1. Fire Risk Assessments. All campuses had been subject to new Fire Risk Assessments by a third party, with no high-risk issues highlighted.
      2. Health & Safety Audit Outcomes. These were generally positive with no significant issues identified and with previous issues identified in the past having been resolved.
      3. Accident/Incident/Near miss. A new online procedure for reporting Accidents and first aid calls had been implemented which had been very well received by the first aiders. A new procedure for reporting near misses and observations had been trialled at London Road Campus. The implementation had increased reporting and it was planned to roll this system out across all areas on each campus.
      4. Training
      5. First Aid
      6. Policy and Procedures.

37/23. College Financial Regulations Review (Appendix – Agenda item 7)

The Committee reviewed further revisions made to the College’s Financial Regulations (previously circulated) to ensure they remained robust and effective.

The Committee had reviewed the college’s Financial Regulations at its meeting in February 2023 (FBO Min No 06/23 refers) which were approved by Board at its March meeting. However, following the decision to move the further education sector to the public sector for accounting purposes, the Senior Leadership Team had further reviewed the Financial Regulations. The Draft, incorporating new delegated authorities because of colleges being deemed public sector bodies, were presented to the Committee for review.

Having reviewed the recommended revisions, the Committee:

Resolved: That the College Financial Regulations, as revised, be recommend to Board.

Action: Item to Board

38/23. Insurance Renewal Review

Further to Min. No. 18/23, the EDoF gave a verbal update on the college’s review of its insurance arrangements. The Committee had already reviewed the college’s Schedule of Insurance and agreed that it provided assurance that the college had in place adequate insurance arrangements. The Committee had also noted that the college had insurance against protecting against cyber-crime, as this was an increasing risk to the sector. In response to a question, the EDoF confirmed that the college had cyber security insurance and, following feedback from the college’s broker regarding claims costs in the respect of ransomware attacks made in the sector, he considered the level and amount of insurance held by the college to be adequate.

39/23. Committee Self-Assessment (Appendix, Agenda Item 13)

The Committee Chair had requested that committee members compile some initial thoughts before the meeting, and he requested the Clerk to circulate the self-assessment as a Microsoft Form to Committee members for completion. All committee members were encouraged to complete the evaluation, which would inform development and improvements going forward.

Action: Circulate self-assessment as a Microsoft Form to all Committee members

40/23. Risk (Appendix - Agenda item 8)

The Committee examined those risks within its remit and agreed that they had either been identified and adequately discussed at the meeting. The latest 2022– 2023 Strategic Risk Register would be presented to the Board at its next meeting.
The Staff Governor sought assurance that the challenges presented to students regarding disruption to transport, including the impact of industrial action and the withdrawal of bus services, was sufficiently recognised within the Register. The EDoF confirmed that the college continued to lobby where possible, bus transport providers and he was hopeful that this had achieved some success as an important bus route that had been withdrawn was likely to be reinstated.

The meeting concluded at 8.26 p.m.