G. Mills in the Chair.
17/24. Declarations of Interest
No pecuniary interests were declared.
18/24. Minutes of Meeting Held 16 April 2024 (Appendix – Agenda Item 3)
Resolved: That the Minutes of the meeting held on 16 April 2024, be approved as a true and correct record.
19/24. Matters Arising
None.
20/24. Draft Digital Strategy (Appendix – Agenda Item 5)
The Committee reviewed the Draft Digital Strategy (previously circulated). The delivery of the Draft Strategy, which focussed on developing student and staff skills, a digital curriculum and innovative ways of delivering, drawing on the lessons of remote education, was a key milestone in the Strategic Development Year 3 Plan. Governors had discussed the implications of digital and Ai at the 2023 Strategic Development Day.
The Committee deliberated on the Draft Strategy to ensure that it met the Board’s expectations and outlined the key elements of the college’s digital transformation plan.
In response to questions, the VP, Q, A & I reported that:
- The financial implications of the operational elements of the Draft Strategy had been built into financial plans going forward; these costs were not anticipated to be significant at this stage. The VP, Q, A & I clarified that the strategy did not seek to cover or specify the operational ICT infrastructure of the college.
- The college’s partners and stakeholders were on a similar journey with respect to the development of digital and Ai and the college was working across sector networks to discuss and address these similar strategic challenges. The college was also working closely with business partners to identify ongoing digital skills needs that would affect curriculum content and delivery.
- The college had accelerated the project to support staff digital needs by increasing the skills capacity of the Learning Enhancement Team.
The Committee challenged whether the Draft Strategy was sufficiently clear on how it supported the college’s strategic ambitions or would address the wider strategic issue of how the exponential speed of growth of Ai would affect the development of the curriculum.
The Committee recognised that, notwithstanding that the college should implement the operational actions set out in Year 1 of the Draft Strategy and that digital and Ai were continually evolving, it requested that years 2 and 3 be revisited to make clearer how the college would achieve its ambition to deliver a flagship digital development and develop the curriculum. The Board Chair agreed to meet with the P/CEO and VP, Q,A & I prior to the revised Draft being considered at the September 2024 meeting.
Action. Board Chair, P/CEO and VP, Q,A & I meet by 31/07/2024. Item to F&BO September 2024.
21/24. Draft Fee, Fee Remission and Refund Policy 2024 - 2025 (Confidential Appendix – Agenda Item 6)
The VP, Q,A & I presented the Draft Fee Policy 2024 - 2025 (previously circulated) for consideration prior to recommendation to Board.
The VP reported on the amendments and updates to the 2024 - 2025 Policy –
- Minor changes had been made to reflect changes in job titles and increases in fees, where applied.
- Regarding Apprenticeships, provision was now included to charge employers the lost income attributed to the completion payment, should an apprentice or employer refuse to allow an End Point Assessment to take place.
- Remitted fees would be available for students who were eligible for the college adult bursary scheme.
In response to questions, the VP confirmed –
- students would continue to be entered for exams and resits 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 2024/25 year.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Fee, Fee Remission and Refund Policy 2024 - 2025, be approved.
Action: Recommendation and Draft Policy to be included in Governance Pack for July Board
22/24. Subcontractor Management, Retained Funding Policy 2024 – 2025 (Confidential Appendix, Agenda Item 7)
The Sub-Contracting Manager presented the Draft Policy (previously circulated) for review prior to recommendation to Board.
The Committee concluded that the Draft Policy was clear and comprehensive.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Sub-Contractor Management and Retained Funding Policy 2024 – 2025, be approved.
Action: Recommendation and Draft Policy to be included in Governance Pack for July Board
23/24. Period 9 Management Accounts (Confidential Appendices - Agenda Item 8)
The Committee received the Period 9 Management Accounts and finance update (previously circulated). The Accounts had been circulated to all governors.
The key issues and differences between the Budget and Forecast out-turn were:
Regarding Income
- Full cost income activity remained below budget.
- 16-18 Income reflected changes to the funding rate since the college’s initial funding allocation which allowed for the national pay award of 6.5% to be paid. This also now included additional funding to reflect in-year growth funding and new guidance regarding the correction of T Level funding.
- The Trades Union Education forecast had been reduced reflecting slower delivery than anticipated to date and the Distance Learning forecast had been reduced to reflect an updated expected outturn based on the year-to-date position. Forecast subcontracted activity had also been increased.
- New start apprenticeship funding had been reduced to reflect the college’s withdrawal from Trades Union apprenticeships and reduced enrolments to date. The forecast Apprenticeship income had been reduced, reflecting the risk to student achievement income which depended on apprentices sitting and passing their end point assessments by the end of July 2024.
- Advance Learner Loan and HE income had been reduced, reflecting lower enrolments and more withdrawals, although this had been offset from an additional Modular Accelerator funded short HE course.
- Contracts for High Needs student top-up funding had been agreed with all main providers. The updated expectation was now slightly lower due to changes in supported students.
- Income streams had been revised to recognise “Multiply” income, LSIF Income and HSIF grant income. This was in addition to SALIX Grant funding and SEA Grant funded equipment that fell below capitalisation threshold.
Regarding pay:
- Increased Pay costs included the 6.5% pay settlement (as opposed to the 4% budgeted) and new posts/hours required to support increased groups and numbers of students.
- Pay costs now included the expected impact of the 5% increase in Teacher Pension contributions which would take effect from 1 April 2025. This was substantively offset by an increase in the Teachers’ Pension Scheme Grant confirmed in March 2024.
- Pay costs now included additional Local Government Pension Scheme (LGPS) pension top up contribution costs not budgeted for as unknown. The top up cost arose due to the LGPS treatment of the college as not covered by the central government guarantee on pension liabilities. This remained an outstanding issue since Office for National Statistics (ONS) reclassification in November 2022.
- Overall, the forecast pay costs had been increased based on the current run rate and to allow for increases to LGPS Pension costs for the last 4 months of the year.
Regarding non-pay:
- Exam costs continued to run ahead of plan and above the same point in 2022/23. The forecast assumed that exams fees for the final 3 months were as per budget for the remaining quarter of the year. This increased the forecast for exams fees.
- Materials costs included equipment acquired as part of the T level Specialist equipment allowance that was below capitalisation thresh-holds and non-pay Multiply delivery costs. Excluding these, Materials costs were broadly on budget overall but Carpentry and Joinery Materials costs remained significantly over budget year to date, reflecting the rising costs of materials.
In response to questions, the EDoF, explained –
- the remaining risks:
- Trades Union Studies shortfall in short roll-on roll off courses’ income.
- Distance Learning failing to achieve forecast income.
- Expected under-delivery in the GLA region due to lower Trades Union Studies activity and delay/cancellation of planned subcontracted work which would result in clawback of funding at the end of the year.
- Exams fee inflation created further pressure on outturn.
- Devolution was an increasing challenge for national GMB Trades Union work. Therefore, there was a medium-term threat to this activity due to funding rates and the amount of unfunded activity that the college found itself delivering due to learners living in devolved areas as part of its national programme in partnership with GMB.
- That 16-18 Funding regarding T Levels had been reinstated in the forecast outturn now that the Department for Education revised guidance had been released.
- The college’s Cash position remained positive. The Committee requested that the cashflow forecast be presented to Board as part of the Draft 2024 – 2025 Draft Budget presentation as it demonstrated clearly the college’s success in attracting funding for capital projects.
The Committee was shown progress photographs of how the latest refurbishment works to the Learning Resource Centre, Welsh Bridge Campus and The Bungalow, London Road Campus were progressing. The Committee appreciated being kept up to date with these important projects, designed to improve student and teaching experience and meet additional student demand.
24/24. Annual Review of Financial Regulations (Appendix – Agenda Item 10)
The Committee reviewed the Draft Financial Regulations (previously circulated), which had been revised in response to the newly released College Financial Handbook.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Financial Regulations 2024 – 2025, be approved.
Action: Recommendation and Draft Policy to be included in Governance Pack for July Board
25/24. Review of Anti-Bribery and Anti-Fraud Policies (Appendices – Agenda Item 11)
The Committee reviewed the Draft Anti-Bribery and Anti-Fraud Policies (previously circulated). These policies had previously been incorporated into the college’s Financial Regulations, however, in response to recommendations included in the newly released College Financial Handbook and in the recent Internal Audit Counter Fraud Health Check, the college had devised a standalone Counter Fraud Policy to reinforce the college’s commitment to preventing and addressing fraudulent activities.
The Health Check had also recommended that the current ‘reporting/investigation procedures for suspected fraud and corruption’ should be incorporated into a separate Anti-Fraud Policy.
RESOLVED: It be RECOMMENDED TO BOARD that the draft Anti-Bribery and Anti-Fraud Policies, be approved.
Action: Recommendation and Draft Policy to be included in Governance Pack for July Board
26/24. Review of Banking Arrangements (Confidential Appendix – Agenda Item 12)
Following the implementation of new Treasury Management activities in 2023, the Committee reviewed the opportunities for improved investment returns and bank charges on its existing banking arrangements.
The Committee sought assurance that arrangements were in place to mitigate against any disruption to the college’s financial transactions.
Having –
- received assurance that arrangements were in place to mitigate against any disruption to the college’s financial transactions
- reviewed carefully the relevant transactional banking charges
- regard to the college’s duty to invest resources so as to maximise their benefit for the college and students against the risk of damage to the college’s reputation.
RESOLVED: It be RECOMMENDED TO BOARD that
- current account transactional banking and BACS payment facilities be transferred to Barclays Bank; and.
- NatWest Current Account banking facilities be maintained for the purposes of managing loan and interest repayments and maintenance of an ongoing relationship.
Action: Recommendation to be included in Governance Pack for July Board
27/24. Letter from Education & Skills Funding Agency (ESFA) – Shrewsbury Colleges Group Financial Statement Review 2022 to 2023 (Appendix, Agenda item 14)
The Committee reviewed the annual letter from the ESFA following the review of the college’s audited financial statements and associated returns for the year ended 31 July 2023.
Following the review, the ESFA had concluded –
- That the college’s financial health grade for 2022/23 based on the outturn forecast, was Good.
- No significant financial control concerns arose form the review of the college’s audited financial statements.
The Board Chair directed the Clerk to respond to the consultation on the issue of future financial review letters.
28/24. Risk (Appendix - Agenda item 13)
The Committee examined those risks within its remit (previously circulated).
Further to FBO Min No 15/24, when the Committee discussed the process by which committees could report risks within their remit that could be removed, retired or regraded, it was confirmed that the Audit Committee would consider this at its next meeting, together with how, going forward, risks within the remits of committees should be presented, so that they could more effectively monitor these risks.
29/24. Date of Next Meeting – Tuesday, 02 July 2024 from 5.30 p.m.
The meeting concluded at 7.35 p.m.