17/21. Election of Chair of Committee
Having been nominated by R. Wilson and seconded by P. Tucker,
Resolved: That G. Mills be elected Chair of the Committee.
G. Mills in the Chair.
18/21. Declarations of Interest
None.
19/21. Minutes of Meeting Held 30 March 2021 (Appendix – Agenda Item 4)
Resolved: That the Minutes of the meeting held on 30 March 2021, be approved as a true and correct record.
20/21. Matters Arising
None.
21/21. Management Accounts – Period 9 - 31 March 2021 (Appendix – Agenda Item 5)
The Committee considered a report (previously circulated) with respect to the Management Accounts to 31 March 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 College had received notification from the Education & Skills Funding Agency (ESFA) that it would receive an additional £44K to cover further additional costs incurred relating to the College’s Covid 19 testing programme for students; this had not been included in the forecast to date and therefore demonstrated an additional improvement to the College’s financial outturn;
- The FD reported that, from this point, the amount set aside in the forecast for restructuring costs would be reduced;
- Whilst the forecast continued to take the position that the College would be unable to deliver all the Adult Education Budget (AEB) funding allocation, since the Management Accounts had been produced, the College had received notification from the NEU local branch of an intent to continue industrial action. Whilst this was unlikely to have a significant impact on provision across the Shrewsbury campuses, it was likely to affect the delivery of Trade Union Studies provision and therefore the amount of Adult Education earned for the rest of the academic year. The amount of AEB delivery included in the forecast was therefore at increasing risk as, whilst the College had already forecast that it would deliver c80% of allocation, the impact of this ongoing strike action had not yet been factored into the forecast. The ESFA would claw back any delivery under 90% of 2020/21 allocation.
- In March, the College had been subject to an ESFA funding audit. This had demonstrated that the controls and processes for application of funding rules across all ESFA income was robust. The audit had identified one technical issue which had resulted in the claw back of £32k of funding in respect of 2019-20, which had been reflected in the forecast outturn for this year.
In response to a question from the Board Chair, the FD explained the significant favourable variance for the year 2020/21, as opposed to the amount originally forecast. The increase was mostly due to 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 and a number of one-off, in-year payments including catch-up funding of £250K and £70K of Covid funding. In addition, the College continued to be awarded £176k of Capacity and Delivery funding to support work placements. The Committee requested a variance analysis be included as an Appendix in the Period 10 Management Accounts.
In response to a question on why the apprenticeship full year outturn remained unchanged, the GVP – I&SD explained that, whilst the College had, this year, started fewer apprentices, they had attracted higher funding. However, there remained a risk to the value of potential achievement, as withdrawal from training by, or insolvency of, apprentice employers remained a significant risk as the severity of and duration of the pandemic continued.
Resolved: That, having considered the report, the Committee received the Management Accounts to 31 March 2021.
22/12. Additional Item of Business – Education and Skills Funding Authority (ESFA) Letter to Colleges Financial Statements 2019 to 2020 and Finance Record 2019 to 2021 and Financial Dashboard
The Principal/CEO referred to a letter received from the ESFA (previously circulated) advising that, following its review of the College’s audited financial statements and finance record, it confirmed the College financial health grade as ‘Good’. The ESFA had also reviewed the College’s audited financial statements, financial statements management letter and the annual report of the Audit Committee and had not identified any significant financial control concerns from this review. The ESFA had noted an Emphasis of Matter on the Independent Auditor’s report in relation to the effects of Covid-19 on the valuation of property investments, which had been reported to the Audit Committee as part of the Financial Statement Auditor’s Annual Report (Audit Min. No. 23/20 refers).
In reviewing the Financial Dashboard, the P/CEO explained that the benchmarking cohort was now smaller, due to sixth forms merging with other education providers or through academisation. The Dashboard remained of value, as it provided additional contextualisation of College performance and stimulated questions.
23/21. Estate Strategy – Update
Further to the approval of the College’s Strategic Plan, the FD reported that, after a tendering process, the College had appointed Peter March Consulting, who had a proven track record in the sector, to work with the College to develop a comprehensive Estates Strategy. There would be a full Team site visit in Half Term, which would lead to focus groups with the Senior Leadership Team and staff to work on what the College should be doing in terms of meeting students’ needs going forward. This would lead to the development of a Full Strategy by the end of July/August 2021.
With respect to other Estates matters -
- In response to a comment by the Committee Chair on the recent announcement of invitations for colleges to bid for recently-released Capital Extension Funding, the FD explained that the deadline for submission of bids was 14 June 2021. The College was working with Peter Marsh Consulting to submit a bid for estate enhancements at English Bridge Campus. The P/CEO added that this funding was designed to meet growth and the College therefore had a strong case.
- In response to a question from the staff governor on the latest position regarding Wakeman Fields, (F&BO Min. No. 06/21 refers), the FD reported on the results of the recent feasibility study, which would be shared with Committee members and the College would progress discussions with the Council.
- Further to F&BO Min. No. 15/21, the business case proposing investment in additional equipment to support an expansion of the College’s Engineering provision, with the intention of offering additional places to applicants from September 2021, had been circulated to all Committee members, as requested. The FD reported that orders for lathes had been placed.
- The College was looking to expand the temporary Brickwork building at the London Road Campus to allow for increased provision and accommodate additional groups from September 2021.
- Planning permission for security fencing for the London Road Campus had been secured and would be erected over the Summer Holidays.
24/21. Draft Fees Policy 2021 – 2022 (Confidential Appendix – Agenda Item 8)
The Committee considered a report (previously circulated) setting out a request to review and recommend to Board the proposed College Fees Policy for 2021 - 2022. The changes proposed had been highlighted to ensure that the Committee could identify the changes made (F&BO Min. No 35/20 refers).
The GVP – I&SD explained how the Draft Policy had been amended and answered questions from Committee members on funding arrangements.
Resolved: That the Draft Fees Policy 2021 – 2022, be RECOMMENDED TO BOARD.
25/21. Draft Revised Sub-Contractor Policy (Appendix – Agenda Item 9)
The Committee considered a report (previously circulated) setting out a request to review and recommend to Board the Draft Subcontractor Policy for 2021 – 2022.
The GVP – I&SD explained that the Board was requested to adopt the Policy annually, as an ESFA Funding requirement. He explained that the Draft Policy this year, had been updated to reflect new funding requirements and requirements to evidence governance scrutiny and oversight. Whilst the College already provided information to governors, to respond to the new requirements, going forward, the Management Accounts would include more detail to improve the transparency and visibility of the information provided.
Resolved: That the Draft Subcontracting Policy 2021 – 2022, be RECOMMENDED TO BOARD.
26/21. Audit Code of Practice 2021 – Fees - Verbal Update
The FD explained that the ESFA had recently updated audit rules for the 2020 - 21 academic year in a new code of practice. This included a statement that the information provided on the grant paid to colleges would provide no assurance to external auditors. The implication of this change was that external auditors would now carry out more work this summer and early autumn to ensure compliance with funding rules. In effect this would extend some of the funding audit obligations to all colleges this year, at their own expense. The FD explained that external auditors were likely to be nervous over liability and the ESFA’s statement might prompt auditors to do more work to verify 2020 - 21 college ESFA funding and ask for extra payment or even withdraw from the sector. The College’s current Financial Statements auditors, along with others in the sector, were currently in discussion with the ESFA over their concerns.
27/21. 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 have either been identified or adequately discussed at the meeting.
The Committee noted the rising risk level with respect to Board Risk1 (Risk of disruption to learning from strike action). The impact of ongoing strike action had not yet been factored into the forecast and while this was expected to reduce pay costs this was also likely to adversely impact AEB delivery further due to disruption to the College’s Trade Union Studies activity.
28/21. Additional Item – Report from Principal/CEO
The P/CEO provided an update on the potential for additional recovery funding for 2021 – 2022.
29/21. Date of Next Meeting – 06 July 2021 @ 5.30 p.m. Venue – tbc.
The meeting concluded at 6.55 p.m.