Corporation Minutes 23 March 2023
Corporation Minutes 23 March 2023
Corporation and Committee Minutes- Corporation Minutes 23 March 2023
Minutes of a Meeting of the Board of Leicester College
Held on 23 March 2023
Present: Jonathan Kerry (Chair), Chan Kataria, Lisa Armitage, Maureen Magutu, Zoe Allman*, Neil McDougall, Shaun Curtis (item 8 onwards), Lee Soden* Anne Frost* (item 8 onwards) Caroline Tote Danielle Gillett Tom Wilson Verity Hancock.
In Attendance: Louise Hazel - Director of Governance and Policy, Shabir Ismail - Deputy Principal, Andrew Cookson - Director of Creative and Performing Arts (item 5), Della Sewell - Director of HR.
*Joined meeting online via Teams
Declaration of Interest
1.1 There were no declarations of interest.
1.2 Neil McDougall was welcomed to his first meeting.
Apologies for absence
2.1 Apologies for absence were received from Lisa Armitage, Nicola Gonsalves, Robert Radford, Jackie Rossa, Debi Donnarumma and Kully Sandhu.
Minutes of the last meeting and matters arising
3.1 Members of the Corporation received and approved the minutes of the meeting on 23 March 2023.
3.2 As a matter arising (10.2) , it was confirmed that the loan had been repaid, the Department for Education (DfE) loan entered into and the Revolving Credit Facility had been cancelled. It was also confirmed that the College’s bid for T 2 level funding (11.2.2) had been successful and £1.6m had been awarded with only a 2% contribution required from the College.
3.3 Members of the Corporation received and approved the confidential minutes of the meeting on 23 March 2023.
3.4 As a matter arising (9.1.6), it was explained that end of the redundancy process had finished. There had been 17 voluntary redundancies and three compulsory redundancies. Most staff would leave at the end of July; one would leave in October.
3.5 Members of the Corporation received and approved the note of the Away Day on 9-10 June 2023.
3.6 Members of the Corporation received and approved the actions from the Away Day 2023.
3.7 In response to a question it was confirmed that an action plan would be brought back to the October Corporation meeting and actions tracked through the year.
Employer survey
4.1 The Principal presented the results of the employer survey for 2023. The following points were highlighted.
4.1.1 The survey ran from 9 May-6 June 2023 and was issued via email to 544 employers. There was a response rate of 40%.
4.1.2 It benchmarked the College against all provider types and across a range of standard questions. Overall satisfaction was 2% above the sector benchmark. Responses to all questions were either at or above previous satisfaction levels, with the exception of one question.
4.1.3 However, the responses were contradictory and the benchmarking not necessarily helpful since not all colleges completed the survey and would have very different employer customers.
4.1.4 When compared to other general FE and tertiary colleges, the response rates showed a much stronger picture with the distance travelled above other colleges across a wide range of responses and 5% above overall.
4.1.5 The positive responses reflected the College’s growing reputation as a provider of choice for employers. There was also positive direct feedback to the apprenticeships team that the College provided a good service. The team worked hard and was very successful in developing good relationships with employers. The number of apprentices completing was also showing an upward trajectory.
4.1.6 Employers who had indicated they would be willing to be contacted and work with the College in other ways including providing work placements or staff CPD would be followed up.
4.1.7 For 2023/24, the QDP survey would be replaced with a series of short, digital surveys at different points to provide more flexible, timely and relevant feedback. These would be benchmarked against the College’s performance year on year which was potentially more helpful than using 3 the QDP benchmarking.
4.2 Governors made a number of comments and asked the following questions including:
4.2.1 From a recent visit to the apprenticeships team it was clear that the team had a good idea of the potential pipeline of new employers.
4.2.2 It was an extremely positive report and the College should be pleased. Would it be helpful to look at the outlier responses to see what more could be done to improve the service to employers? Agreed; the team would be asked to look into this.
4.2.3 It might be helpful to refine the questions; for example, staff might not have had an opportunity to use their new skills so employers could not comment favourably on this. Noted.
4.2.4 Would employers’ willingness to join the skills advisory boards be another way of gathering more feedback? Yes, it would. This had also been discussed at the Careers Strategy Group.
4.2.5 Was the number of employers increasing year on year? There had been a big fall during the pandemic resulting in fewer carry-ins. Numbers were returning to pre-pandemic levels although the income still needed to recover. The College remained the largest college provider of apprenticeships in the subregion by income.
4.2.6 How did 554 employers compare to pre-Covid? This would need to be checked but it was not just about the number of employers; working with large employers was often more cost effective than working with SMEs. However, it was important to balance risk and not be too reliant on a few large employers.
4.2.7 Which sectors were represented in the responses? Had the responses been analysed by sector to see if there were any major differences? Responses had come from a range of sectors although the majority of employers tended to be in construction and engineering. However, the College might also be delivering apprenticeships for the employer not directly related to the sector, for example, business or IT apprenticeships for the same for a construction company.
4.2.8 It would be interesting to see how the responses compared to the LSIP responses. Agreed.
4.3 Members of the Corporation noted results of the Employer Survey.
Partnerships and projects report
5.1 The Principal presented the Partnerships and Projects report. The following points were highlighted.
5.1.1 A decision had been taken to move away from subcontracting because it could be risky; however, it did also allow the College to reach different parts of the local community and different types of student.
5.1.2 The College worked with a range of partners and stakeholders to target specific skills needs and demands locally. Key local partnerships were highlighted; work with the DWP/Jobcentre Plus on sector work academies was particularly successful.
5.1.3 The paper also showed the efforts taken to bid for funding to support specific projects and work collaboratively to address local needs.
5.2 The Director of Creative and Performing Arts presented a proposal to enter into a subcontract with the National Space Centre (NSC). The following points were highlighted:
5.2.1 The College had developed a two year Level 3 Immersive Design and Development course with the NSC which had successfully recruited and enrolled 15 students onto year one of the programme in 2022/23.
5.2.2 Delivery of the main qualification was split 50/50, with students timetabled equally across the College and NSC. A member of NSC staff had been seconded to the College for the programme in 2022/23. The College delivered the pastoral content through personal development sessions and the NSC delivered work experience hours.
5.2.3 The NSC was now keen to enter into a subcontracting arrangement to continue the course and recruit a new cohort in addition to the current cohort progressing into the second year. This subcontract would reduce the risk around staffing the course with the NSC taking on responsibility for replacing specialist staff; it would be in a much better position to do this than the College.
5.2.4 The subcontract would meet the requirements of the College’s Subcontracting Statement and Subcontracting Policy in supporting the College’s Mission. Based on the delivery during 2022/23, it was shown to be high quality provision.
5.2.5 There were other benefits to a more formal arrangement including staff development, curriculum development and progression routes.
5.2.6 Given the specialist and unique nature of the NSC, there was no need to tender for the subcontract as no other organisation would be in a position to deliver the contract.
5.3 Governors asked a number of questions including:
5.3.1 Although the paper said the NSC was the only provider that could deliver the course, if the universities offered similar provision, could they not also deliver? It was important to ensure the College was getting value for money. The universities were not able to offer provision at this level for 16-18 year olds or provide the unique work experience/placements offered by the NSC.
5.3.2 The course was unique and from a student point of view, the chance to work in the NSC was very attractive. Agreed.
5.3.3 Partnership and capacity building were big issues and these should be built into the contract. Noted.
5.3.4 Was progression just to higher education? There were universities offering higher level immersive design so students could progress to these institutions or they could progress into the industry at a lower level.
5.3.5 Who would take the risk, if the NSC could not deliver? If the NSC was unable to deliver it would need to teach out the existing students. It was already delivering a similar contract with Loughborough College for A level students so had a track record in subcontracting. A small number of students was involved and the College’s experience of managing subcontracting meant there was a low risk in terms of ensuring good use of public money. 20% of the NSC funding would be retained for management of the contract and payment would only take place for students who were enrolled.
5.3.6 Was it necessary to take a fundamental view of subcontracting to see what could be brought in house in order retain the margin on delivery? The Corporation had indeed taken the decision to cease subcontracting on the scale to which it had previously done and bring everything in house. The ESFA had also made it more and more difficult to subcontract. Previous subcontracting was intended to increase geographical reach rather than focussing on a specialism so the NSC contract was very different from previous subcontracts. The default position would continue to be to deliver in house but further subcontracts might be brought on a case by case basis.
5.3.7 The College should not have a fundamental objection to subcontracting; it should be what was best for the student experience.
5.3.8 Agreed; there should be no issue with partnerships or subcontracting but it was important to think about the economic rationale particularly given the financial position.
5.3.9 The Highfields Community Centre had previously hosted some events which the College might not want to be associated with; this had been reported to the Vice Principal. Noted.
5.3.10 Were all partnerships reviewed and quality assured regularly? They were.
5.3.11 The Multiply project seemed to be a lot of effort for very little reward; was it worth opting out of this? The College had not been successful in the recent bidding process for the County contract. Although the bid had been high quality, it lost out on cost. It was not yet clear what the City was planning. Overall, however, the College had been successful in leveraging in £10m through bidding opportunities this year.
5.4 Members of the Corporation:
5.4.1 Noted the report.
5.4.2 Approved the proposed subcontract with the National Space Centre.
5.4.3 Approved the Subcontracting and Tendering Policy and Subcontracting Statement.
Finance report (period 10) and summer reforecast
6.1 The Deputy Principal presented the finance report (period 10) and summer reforecast. The following points were highlighted.
6.1.1 The year to date result was an operating deficit after restructuring costs of £2,465k compared to the budgeted deficit of £2,128k.
6.1.2 16-18 learner responsive learner numbers were above allocation by 98 students. However, due to the mix of students recruited, the allocation had been reduced in year by £161k.
6.1.3 Indications from the R10 data return and discussions with curriculum directors suggested that the College would fall short of the spring reforecast AEB target. The expected income had been reduced by £531k in the summer reforecast.
6.1.4 Apprenticeship income was currently in line with the autumn reforecast target. However, there would need to be a significant number of achievements over the remainder of the year and there remained risks over the completion of end-point assessments which were out of the College’s control.
6.1.5 Tuition fee income was below target. A decrease in income of £80k had been factored into the summer reforecast.
6.1.6 Following the summer reforecast, the expected Total Comprehensive Income after restructuring costs had decreased from a deficit of £1.986m to a deficit of £2.361m.
6.1.7 The College would breach two of its bank covenants. However, it had now received written confirmation that Santander would waive the covenants for 2022/23; it was also inclined to continue to support the College in 2023/24 and potentially 2024/25 although a further meeting would take place in October to review the position. The ONS decision had helped in this respect with the sector being seen as less of a risk.
6.1.8 The College’s financial health remained in the ‘requires improvement’ category at 140 points. The cash position was still strong.
6.2 The Chair of F&GP commented that the Committee had looked at the finance report and reforecast in detail. Questions had centred on how accurate forecasting was given that the forecast had been revised downwards each time it had been reviewed; failure to achieve adult income had brought it down incrementally over the year. The Committee had discussed the bank’s position and the use of reserves to enable the College to keep provision as broad as it was currently. The Deputy Principal explained it had been very difficult to forecast during the year particularly around adult income post-pandemic and because of the impact of the cost of living. The budget had also assumed a level of Multiply income but almost none of this had come through because of contracts being awarded very late and this was not known until the spring term. Planning for next year was based on this year’s actual position.
6.3 Members of F&GP also confirmed that the Committee had discussed the need to view the deficit position over three years, bearing in mind what action had already been taken and what might still be needed to bring the budget back into balance.
6.4 Governors made a number of comments and asked the following questions including:
6.4.1 The F&GP and finance team had done a good job; the bank clearly saw that the College had made some logical decisions and had a handle on the financial position. Agreed. The College was always transparent with the bank; this had helped build trust in the College’s ability to manage the financial position.
6.4.2 It was unlikely the College would be allowed to disappear but what might the sanctions or interventions be if the situation got worse? At some point the College could run out of cash and the ESFA might intervene but it was not concerned at the moment. It appeared that the only way to get financial support from government was to fail completely. The College’s credibility was evidenced by its successful bids for project funding totalling £10m.
6.4.3 The F&GP had also taken the active decision to support the College’s bids for funding in order to enable it to invest in its future. 6.4.4 The College was teetering on the intervention; how confident was the ELT this this would not happen next year? It would depend on recruitment but applications looked good. The College would need to reach a deficit of around £4m to go into intervention but the ELT would not let it get to this position. If the financial position was such that the College was struggling, the FE Commissioner (FEC) would be contacted.
6.4.5 Did the FEC team seem to be taking a more supportive approach? They did under the current FE Commissioner. The College had been in early intervention previously at which point the FEC team had been supportive of the College’s approach to managing its financial position with no recommendations made. The only comment had been that the level of HE subcontracting looked high.
6.4.6 F&GP had looked at the financial position very carefully. As long as the bank had confidence and the College had sufficient cash reserves to cover the deficit position, it was not a cause for panic. The Corporation should focus on cautious budgeting and look for efficiencies wherever possible. These would be included in the reforecast once the enrolment position was known.
6.5 Members of the Corporation noted the Period finance report and approved the summer reforecast.
2023/24 plans
7.1 The Principal presented the Operating Statement for 2023/24. The following points were highlighted.
7.1.1 The Operating Statement related directly to objectives and KPIs set out in the Strategic Plan.
7.1.2 There was no intention to change the strategic priorities but there was ongoing work to review how to take them forward in the actions set out in the statement. The statement also outlined how the achievement of the targets would be measured and monitored.
7.2 Governors asked a number of questions including:
7.2.1 Why were there no targets for some KPIs? These would be reported showing benchmarks against previous performance. The College disaggregated data down to different levels and so targets for all of these were not included in the operating statement.
7.2.2 Would the KPIs be reported in the new dashboard? They would.
7.3 Members of the Corporation approved the Operating Statement for 2023/24.
7.4 The Principal presented the Curriculum Delivery Plan for 2023/24. The following points were highlighted.
7.4.1 Members had seen a draft of the plan at the Away Day.
7.4.2 It included the plans to change provision including courses being stopped and new areas of development in response to demand and local skills needs.
7.4.3 The College might need to think about whether it needed to change its offer further to take advantage of decisions by Regent College to stop music provision and WQE College to stop all level 2.
7.5 Governors asked a number of questions including:
7.5.1 Why did the College not do A levels? There was no demand for A levels at Leicester College; there was a lot of competition locally and so a decision had been taken to focus on technical routes. Depending on how the national curriculum reform unfolded, it might be necessary to look again at the offer.
7.5.2 It was interesting to see where other providers were ceasing provision. The College did not want to be left behind when it came to making difficult but necessary decisions. Agreed.
7.5.3 There was already a lot of pressure on rehearsal space because it was used by music and other performing arts students; if more music students came, it might be necessary to turn people away. It might, if the College could not accommodate them; or they might be offered an alternative course which was what was happening with construction courses.
7.6 Members of the Corporation approved the Curriculum Delivery Plan for 2023/24.
7.7 The Deputy Principal presented the draft budget for 2023/24 and two-year financial plan. The following points were highlighted:
7.7.1 Overall, the proposed budget for 2023/24 showed an operating deficit of £1.448m. The plan was to bring it back into balance in 2024/25.
7.7.2 Total income for 2023/24 was forecast to increase by £948k to £45.7m compared to 2022/23. This was mainly due to increases in 16-19 income. If the College recruited over 100 students above allocation it could make a case for additional funding. Applications were up in some areas but down in others reflecting government policy. 7
7.7.3 Apprenticeship income was budgeted to increase marginally. However, other income streams such as AEB, Higher Education and fees in general were being held at 2022/23 levels.
7.7.4 Total forecast pay expenditure in 2023/24 would decrease by £238k before restructuring costs. This was the net impact of the identified efficiency savings and the proposed pay rise. Pay costs assumed ongoing vacancy savings of around £2.4m but a further £1.4m of 9 savings was needed going into 2024/25.
7.7.5 The College would not meet the financial objectives relating to operating breakeven, cash inflow and adjusted current ratio although this was close to 1.1:1 but was very sensitive.
7.7.6 Planned maintenance had been reduced in year but work was underway to try and meet as much of this as possible through funded capital projects.
7.7.7 The capital budget was £13.8m of which the College would contribute £2.2m (17%).
7.7.8 The financial health was ‘requires improvement' at 130 points. The deficit would need to reach £3.5m and 110 points for the College to fall into inadequate financial health.
7.7.9 The assumptions and sensitivities were highlighted. The College would breach bank covenants and was working to get the waiver extended, as discussed earlier.
7.7.10 F&GP had received an update on the fabrication and welding capital project at its last meeting. A decision to cease the project had previously been made on the basis of tender costs of £1.1m against a budgeted cost of £300k. However, around £300k of income was at risk if the College ceased the provision; there would be reputational damage and potential impact on other apprenticeship income. There were around 30 employers affected; they were very pleased with the quality of provision and the provision was not offered by anyone else locally. The College had worked with a builder to come up with a lower cost project of £765k; this would have a two-year payback. The ESFA and LLEP had been approached for support but this was not yet forthcoming. It was recommended that this be included in the capital programme.
7.8 The Chair of F&GP explained that the Committee had taken a lot of convincing that the plan would stand up given that the College would fail on several financial objectives. It had however decided this was the best way forward. For reassurance, the Committee had requested a strategic paper which provided a rationale for why the decision was taken to set the budget as proposed and breach the strategic financial objectives.
7.9 Governors made a number of comments and asked the following questions including:
7.9.1 F&GP had also discussed where the redlines were and when decisions about 2024/25 could be taken if needed. These would be brought to F&GP after the first data return.
7.9.2 It was important that the rationale for the deficit budget was clearly articulated; setting this out in a strategic paper was sensible.
7.9.3 By how much would the cash balance need to reduce to dip below 25 cash days? This would be confirmed but it was around £1m.
7.9.4 The proposed budget included the proposed pay award; this effectively pushed the budget further into deficit? Each 1% would cost £300k. There was no government funding for pay and while 10 savings had been made, it was not possible to carve out all the cost of the award from savings and efficiencies.
7.9.5 The budget included assumptions which were based on sound intelligence but it would be important to monitor those assumptions and at the earliest opportunity.
7.10 Members of the Corporation:
7.10.1 Approved the financial plan for submission to the ESFA.
7.10.2 Approved of the 2023/24 budgeted Income and Expenditure. Account, Balance Sheet and Cash Flow contained within the plan.
7.10.3 Approved the Capital Expenditure Budget for 2023/24.
7.10.4 Agreed to include the revised fabrication and welding project in the capital programme. Other sources of funding should be sought but if not forthcoming, this should be funded from reserves.
7.10.5 Noted the 2024/25 financial plan and its assumptions. Student Governors, Shaun Curtis, Verity Hancock, Louise Hazel and Shabir Ismail left the meeting.
Staff pay - confidential Members of staff re-joined the meeting.
Risk Management 2023/24
9.1 The Chair of the Audit Committee presented the proposed approach to risk management for 2023/24. The following points were highlighted.
9.1.1 Following a recommendation from the governance review that the Board consider its risk appetite and a subsequent deep dive of risk management conducted by RSM in January 2023, a risk workshop with members of the Corporation and ELT facilitated by RSM took place in March 2022.
9.1.2 The deep dive and discussion at the workshop had highlighted that the College was overscoring risks and not accurately reflecting the effectiveness of controls. It was felt that there were too many risks and there was not enough clarity around the risk appetite. At the workshop, a series of strategic risks and the College’s risk appetite were discussed along with the approach to scoring and assessing risk levels.
9.1.3 The proposed approach including the Risk Management Policy, Risk Appetite Statement and Risk Register and assurance map had been discussed in detail by the Audit Committee and identified the areas to be prioritised for further investigation. These would enable the Committee to provide assurance that the College’s systems and risk management, control, governance processes and arrangements for securing economies and efficiencies and were effective.
9.1.4 There was still some work to do in terms of how the Committee monitored risks and the documents would be viewed as live documents throughout the year.
9.2 Members of the Corporation thanked the Audit Committee for their work and approved the approach to risk management for 2023/24 including the Risk Appetite Statement, the Risk Register and Risk Assurance Map.
Policy revisions
10.1 The Director of HR presented three new senior postholder procedures. The following points were highlighted.
10.1.1 The new Discipline, Grievance and Capability procedures for senior postholders were based on the Association of Colleges’ model documents and were compliant with the ACAS code of practice and guidance.
10.1.2 Terms of Reference had been developed for a Special Committee to manage cases of discipline, grievances from senior postholders and capability issues on behalf of the Corporation.
10.2 Members of the Corporation approved the senior postholder procedures and the Terms of Reference for the Special Committee.
10.3 The Director of Governance and Policy presented proposed changes to the Student Union Constitution. The following points were highlighted.
10.3.1 The Student Council had reviewed the Constitution and proposed changes to reflect how the Union operated.
10.3.2 Proposed changes were reducing the number of LGBTQ+ Officers to one and reducing the number of BAME Officers to one, removing the Sports and Entertainments Officer role and changing the name of the Campaigns Officer to Marketing and Communications Officer and the name of the General Officers to Executive Officers.
10.4 In response to a question as to whether there was a contradiction in the eligibility criteria for site Vice Presidents, it was confirmed this would be corrected.
10.5 Members of the Corporation approved the Student Union Constitution subject to the minor amendment identified.
Scheme of delegation, terms of reference and corporation work plan
11.1 The Director of Governance and Policy presented the Scheme of Delegation, Committee Terms of Reference and Corporation Workplan. The following points were highlighted.
11.1.1 The main changes to the Scheme of Delegation required by the reclassification of colleges covered consents for borrowing, senior pay, and severance and other compensation payments. For the transactions requiring DfE approval, the existing approvals processes would be used prior to seeking further final consent from the DfE.
11.1.2 Changes to Committee Terms of Reference had been discussed and recommended by the committees. These covered amendments needed as a result of the ONS decision as well as some changes in delegated authorities and changes in terminology.
11.1.3 The Corporation workplan would be kept under review and amended, with additional meetings called in response to developments during the year or should members of the Corporation request it.
11.2 Members of the Corporation approved the Scheme of Delegation, Committee Terms of Reference and Corporation Workplan.
Governor visits and reports and other feedback
12.1 The Chair invited governors who had recently visited the College to report on their visits. The following points were highlighted.
12.1.1 If there was any funding available, the nursery at FPC needed investment; it was not fit for purpose although staff did an excellent job with the facilities available.
12.2 Members of the Corporation noted the visit reports.
Any other business
13.1 The Principal provided an update on a student who had fallen down the stairwell at APC. He had been discharged from hospital and was recovering well and was being supported to finish his course. Governors commented that staff had acted promptly and appropriately at the time, managing the situation very well. Anzar Popat was particularly thanked for supporting and liaising with the student and his family.
Tem from audit committee: Risk management update
14.1 Members of the Corporation received and noted the risk management update.
Progress report on operating statement
15.1 Members of the Corporation received and noted the Operating Statement Progress Report.
Governor appointments
16.1 Members of the Corporation received and noted the report on governor appointments.
Dates of next meetings
26 October 2023
29 November 2023 (Meeting and Christmas Dinner)
14 December 2023
21 March 2024
7/8 June 2024 – Away Days
3 July 2024