Finance and General Purposes Committee Minutes 2 March 2022
Finance and General Purposes Committee Minutes 2 March 2022
Corporation and Committee Minutes- Finance and General Purposes Committee Minutes 2 March 2022
Minutes of a meeting of the board of Leicester College corporation: Finance and general purposes committee
Held on 2 March 2022
Present: Danielle Gillett (Chair), Jonathan Kerry*, Verity Hancock, Ed Marsh*, Chan Kataria, Caroline Tote*
In Attendance: Louise Hazel - Director of Governance and Policy, Shabir Ismail - Deputy Principal/CEO, Della Sewell - Director of HR
*Joined meeting online via Teams
Declaration of interests
1.1 Verity Hancock, Louise Hazel, Shabir Ismail and Della Sewell declared an
interest in item 12.
Apologies for absence
There were no apologies for absence
Minutes of previous meeting and matters arising
3.1 The minutes of the meeting held on 1 December 2021 were received and
agreed.
3.2 As a matter arising it was confirmed that data on long term sickness by ethnicity
had been provided following the meeting.
3.3 The confidential minutes of the meeting held on 1 December 2021 were
received and agreed.
3.4 The confidential minutes of the special meeting held on 1 February 2022
were received and agreed.
Finance reports (Period 6) and Spring Term reforecast
4.1 The Deputy Principal presented finance report (period 6) and spring term
reforecast. The following points were highlighted.
4.1.1 The year-to-date result was an operating deficit after restructuring
costs of £473k compared to the budgeted deficit of £99k.
4.1.2 The College not expecting to meet its 16-18 learner responsive learner
number and funding target by the end of the year.
4.1.3 Indications from the R06 data return and discussions with the
curriculum directors suggested that the College would also fall short of
its AEB allocation. This has been reflected in the reforecast. The
College was expecting to achieve around 90% of its allocation which
was a considerable improvement on the previous year.
4.1.4 Apprenticeship income was currently below target. The impact of
COVID-19 on new starts in 2020/21 had resulted in fewer carry-ins for
this year. The forecast suggested that there would be a further income
shortfall of £79k.
4.1.5 HE income was forecast to be below and a further reduction of £327k
in income had been included in the spring reforecast. This had
associated cost savings of £27k
4.1.6 A spring reforecast had been undertaken. Overall, the expected Total
Comprehensive Income after restructuring costs had decreased by
£478k, from a deficit of £479k to a deficit of £957k. Positive
movements included additional income from the Tuition Fund and
some savings from non-pay costs including planned maintenance and
premises costs, some of which would be moved into the following
year.
4.1.7 Pay was very tight; this would be reviewed further in the summer
reforecast.
4.1.8 The College continued to meet its bank covenants but fell into the
‘requires improvement’ financial health rating, following the spring
reforecast. Cash balances remained healthy although the capital plans
and deficit would impact on the position. The bank remained
supportive and discussions continued over the College’s position.
4.2 Governors asked a number of questions including:
4.2.1 The achievement of 90% of the AEB was encouraging but this still
presented a problem. Data from the Association of Colleges (AoC)
suggested that the College had recovered its AEB faster and more
significantly than other colleges but the gap was still an issue; 7% of
AEB was at risk of clawback.
4.2.2 What was the usual rate of allocation achievement in a normal
year? In 2018/19 106% had been achieved and the College was on
track to achieve 108% in 2019/20 prior to the lockdown. There was still
some nervousness in the local community which was affecting
participation although the relaxation of restrictions appeared to be
helping.
4.2.3 This appeared to be a step towards recovery. It was, although it
was unclear what the impact of the previous year would be on the
current year’s AEB allocation.
4.2.4 Did the reforecast take into account the pay increases proposed
in Paper D? It did include those increases and the NI increases.
4.2.5 The reforecast showed that the pandemic was still having an
impact and it was very hard to plan when the position was so
uncertain. The hard work that had gone into achieving this
position should be noted. Acknowledged; the revenue position was
still under pressure.
4.3 Governors noted the period 6 finance report and agreed to recommend
the spring term reforecast to the Corporation for approval.
T level Capital bid
5.1 The Deputy Principal presented an update on the College’s bid for T Level
capital funding during the Wave 4 funding round. The following points were
highlighted.
5.1.1 A previous new build project on waste land at Abbey Park Campus
(APC) for electrical, plumbing and engineering, with an estimated cost
of £6.6 million, had not been submitted because of the AEB tolerance
decision and the financial implications for the College’s cash position.
5.1.2 The costs of that project had now significantly increased to
approximately £9.7 million and the Senior Leadership Team (SLT) took
the view that it would be unwise to proceed with that project.
5.1.3 It was instead proposed to apply for funding for a refurbishment project
to support Engineering and Manufacturing T Levels at APC B Block.
The maximum grant available was £1.4 million; the College would
need to match the grant to give a total project value of £2.5 million.
5.1.4 The project would create a larger and upgraded workshop area to
accommodate more advanced machinery and provide a better flow
through for students. Classrooms on the first and second floors would
be converted into more specialist provision space. This would all be
delivered within the existing building footprint.
5.1.5 The College would also need to invest to replace machinery which was
outdated. It had been allocated a grant of £918,328 from the
Education Skills Funding Agency (ESFA) for upgraded equipment.
5.1.6 The financial implications were a commitment of up to £1.25 million to
contribute to the overall project cost and potential at risk costs of
£80,000 for project design costs should the bid not be successful.
5.2 Governors asked a number of questions including:
5.2.1 The project seemed a realistic and creative approach to
improving facilities that were tired and needed updating. The
College had an ambition and masterplan for the site; how could
this be picked up? This would need to be revisited; the pandemic
had changed approaches to working and to teaching and learning and
the College would need to look at its strategic plans and curriculum
needs for the future.
5.2.2 Given the difficulties in recruiting engineering staff, was the
College confident it could staff the facility? Growth was not
ambitious and there would be a move from study programmes to T
levels. All colleges were struggling to recruit engineers but work was
underway on a staffing plan for the curriculum area.
5.2.3 It appeared that the College had been wise not to commit to the
original project which would by now be unaffordable. Agreed.
This would be an issue that other colleges would face.
5.2.4 If the College needed to match fund, what would be the impact on
cash? This would be funded from reserves; it currently had £15 million
cash, £9 million in real terms, plus access to a credit facility if required,
so it was manageable.
5.3 Governors agreed to recommend to Corporation approval of the T Level
wave 4 capital application.
Jonathan Kerry left the meeting
Indicative funding allocations
6.1 The Deputy Principal gave an update on funding allocations. The following
points were raised.
6.1.1 Only the 16-18 allocation had been received. This showed a reduction
of 203 students to 3,364 with a reduction of £800k-£1 million in
funding. There was additional funding for T levels and the TPS so
overall the reduction looked to be around £250k less than 2021/22.
6.1.2 This included the increase in rates; although it was reported to be an
increase of 8% the AoC estimated that it was much lower than this in
real terms; further data on this would be shared.
6.2 Governors asked whether all colleges were experiencing a similar
situation. Growth across the sector had been in A levels and so those
colleges which did not offer A levels were seeing similar reductions.
6.3 The Principal explained that it was not possible to maintain the current
establishment based on a current planning assumption of around 3,900
students. The plan would need to be much closer to the allocation and all
curriculum areas would look at their establishment and what was needed to
deliver to the plan. It would be necessary to move quickly to achieve savings
ready for next year. If there was significant growth in year, it would be possible
to submit a business case for additional funding.
6.4 Governors noted the update on allocations.
Changes to pay scales and notice periods for support staff
7.1 The Director of HR presented a report setting out changes to terms and
conditions of service for support staff and proposing an increase in the length of
notice for some employees. The following points were highlighted.
7.1.1 The National Living Wage (NLW would be £9.50 per hour from 1 April
2022. This increase would have a significant impact on the bottom of
the support staff salary scales and would remove differentials between
the grades at the lower end of the salary scales. The College needed
to ensure there were differentials between scales to recognise different
levels of responsibility and to ensure it could attract staff to roles at the
lowest levels of the pay scale.
7.1.2 The College’s ability to recruit was affected by nearby comparators
which paid more.
7.1.3 It was proposed move to a new pay model and replace scales 1, 2, 3,
and 4 with new scales A, B and C. Scale C would be a combination of
scales 3 and 4. Differentials between scales and points would be
maintained at around 30p where possible.
7.1.4 The financial implications over five years were outlined. These had
been built into the reforecast.
7.1.5 An Equality Impact Assessment screening had been undertaken and
showed a positive impact for women; the proposal should help close
the gender and race pay gaps.
7.1.6 Following consultation with UNISON, it was proposed that the notice
periods of two months should apply to staff on scale S01 and above
and only to staff newly appointed or existing staff who changed jobs.
7.1.7 Both pay scales and notice periods were contractual matters which
were the subject of collective bargaining with UNISON.
7.2 Governors asked a number of questions including:
7.2.1 Were the reductions in costs in years two and three because
people would move to the new grades and then progress? Yes;
by 2025/26 most staff would be at the top of the scale.
7.2.2 The proposals corrected the increase in the NLW but would it be
necessary to redo this again when the NLW increased? It would
depend on what pay award was made. There was some scope within
the new grades to cope with increases in the NLW but it would need to
be kept under review.
7.2.3 Cumulative costs were about £700k; what would the costs be in
year five? By then the costs would tail off and would be built into the
pay budget.
7.2.4 Achieving the benefits of the notice period change would take
some time; was it possible to do it sooner? It was but this would
not have union support and a collective agreement would not be
reached. Forcing such a change through was unlikely to be looked on
favourably by a tribunal.
7.2.5 Was such action common in the sector? No, it was very
uncommon and regarded as a position of last resort.
7.3 Governors approved the changes to pay scales and notice periods for
support staff.
Sick pay policy
8.1 The Director of HR presented a revised Sick Pay Policy. The following points
were highlighted.
8.1.1 The Sick Pay Policy was a collective agreement and contractual policy
affecting terms and conditions. As such, it had been agreed in
principle with the recognised unions.
8.1.2 There were no significant changes to the policy from the previous
version. The main changes covered drafting changes and changes to
terminology; removal of reference to contractual overtime as no staff
have contractual overtime; and inclusion of accident, ill health or
conditions sustained in the workplace for the purposes of the policy.
8.2 Governors approved the Sick Pay Policy.
Changing the face of FE report
9.1 The Director of HR presented an overview of a recent EDI project which sought
to address issues connected to race in staffing and the curriculum. The
following points were highlighted.
9.1.1 The project part funded by the ETF had been commissioned by the
College to understand the reasons for under representation of non-
white staff in senior roles in the College compared with the student and
local population, and the challenges and barriers that resulted in low
representation of racial diversity at middle and senior management
level and to identify potential solutions. It had also looked at how
curriculum resources could be reviewed to ensure they reflected the
student profile and wider community.
9.1.2 The Black FE Leadership Group had been engaged to conduct
research; this involved 100 black staff completing questionnaires
followed up by interviews with 34 and a review of a range of data.
9.1.3 Findings included that the profile of the Governing Body, management
and staffing at all levels did not fully reflect the local community and
students. This is a very common picture for colleges and other similar
employers across the Country.
9.1.4 There was a shortage of black managers in the Curriculum and
Support leadership pipeline and black applicants did not fare
proportionately as well through the recruitment process.
9.1.5 There were some positive comments from staff. The majority of black
staff identified the mission and ethos of FE as the key reason for their
career choice with the main reasons for choosing Leicester College to
be its reputation and location as a local employer.
9.1.6 74% of all participants indicated they had not experienced any overt or
covert racism whilst working at the College. There were examples of
where student behaviour of a racist nature had been handled well and
others where it had not. Confidence in reporting racism was mixed
amongst the interviewees.
9.1.7 A series of recommendations had been made and an action plan was
being tracked by SLT.
9.2 Governors asked a number of questions including:
9.2.1 How would we know what improvement looks like? The data
would show whether there had been an improvement in diversity
across different roles. Staff culture surveys would also show if staff
perceived an improvement.
9.2.2 There was no silver bullet and all of the actions seemed sensible.
The fact that 25% of staff had experienced racism seemed high; it
would be interesting to know what type of experiences they had
and how these had been dealt with. This was 25% of a small sample
but that did not mean it was not important; this might include
microaggressions and there was work to do to ensure that there was a
realisation that what some people saw as ‘banter’ could be perceived
as racism by others.
9.2.3 What was meant by an ‘institutional approach to understanding
and addressing any incidences of racism.’ This meant a common
understanding of what was considered a racist incident and how this
would be addressed.
9.2.4 Unconscious bias training and reverse mentoring was found to
work very well and might be worth considering and would show
that the College leadership was in listening mode. Agreed; there
was an issue with communications and how staff were informed about
what was being done. There had been a leadership programme with
spaces allocated to black staff although not everyone was aware of it.
It was noted that although staff were often keen to stay with the
College and progress their careers, it would not be possible for
everyone to have career paths within the organisation and sometimes
it was necessary to leave to progress into the next role.
9.3 Governors noted the report and agreed that it was an important area of
work which needed to have a high priority.
Key employment changes and implications
10.1 The Director of HR gave an update on key employment changes. The following
points were highlighted.
10.1.1 There were no major changes although a case concerning holiday pay
which was currently going through the Supreme Court might have
implications for the College.
10.2 Governors noted the update.
Bad debt write-off
11.1 The Deputy Principal presented a paper requesting authority to write-off debts
that were considered uncollectable. The following points were highlighted:
11.1.1 The debt had been chased as far as possible and was now considered
to be uncollectable.
11.1.2 One large debt involved a single subcontract arrangement. The
College had attempted to recover the funds from the partner. Legal
action had not been taken given that the debt would have been
contested by the partner and the College could not be confident of
winning the case.
11.1.3 For the year to date, there had been previous write offs of £3,889.43.
With this recommendation, the cumulative total for the year would be
£46,615.29.
11.2 Governors asked a number of questions including:
11.2.1 Had the subcontract issue been as a result of an individual or
systemic failure. An individual; that person no longer worked for the
College.
11.2.2 Had lessons been learned from this? They had. The College had
significantly reduced is subcontracting and processes and systems
had been reviewed.
11.3 Governors considered the paper and agreed to approve the write-off of
uncollectable debts totalling £42,725.86.
Verity Hancock, Louise Hazel and Shabir Ismail left the meeting.
Senior postholder salaries - CONFIDENTIAL minute
Marketing update
13.1 Governors received and noted the Marketing Update.
International update
14.1 Governors received and noted the International Update.
Waivers of financial regulations
15.1 Governors received and noted the report on waivers of financial
regulations.
Date of next meeting
4 May 2022
Any other business
17.1 There was no other business.