Finance and General Purposes Committee Minutes 3 October 2024
Finance and General Purposes Committee Minutes 3 October 2024
Corporation and Committee Minutes- Finance and General Purposes Committee Minutes 3 October 2024
Minutes of a Meeting of the Board of Leicester College Corporation:
Meeting of the Finance and General Purposes Committee Minutes 3 October 2024
Present: Danielle Gillett (Chair), Chan Kataria, Lesley Giles, Shabir Ismail, Lee Soden
In Attendance: Louise Hazel Director of Governance and Policy, Jane Parkinson Director of Finance, Della Sewell Director of HR (items 1-10), Shaun Curtis Director of Estates and Campus Services (items 5-7), Sophie Strevens Robinson Staff governor (observing – item 6 onwards)
Declaration of Interest
1.1 Shabir Ismail, Louise Hazel and Della Sewell declared an interest in item 10.
Apologies for absence
2.1 Apologies for absence were received from Robert Radford. Jane Parkinson was welcomed to the meeting.
Minutes of the Last Meeting and Matters Arising
3.1 The minutes of the meeting held on 27 June 2024 were received and agreed.
3.2 The confidential minutes of the meeting held on 27 June 2024 were received and agreed.
3.3 The minutes of the special meeting held on 11 July 2024 were received and agreed.
3.4 As a matter arising, the Acting Principal gave an update on discussions with the City Council over High Needs funding. The Council had reiterated its wish to continue to work with the College and indicated that additional funding of around £600k might be available. The College had pushed for an increase to £1 million which was still less than the actual £2 million cost. The Council’s representative had agreed to take that away to seek approval. No response had yet been received and this continued to be chased; a face to face meeting with the finance person would also be requested.
3.5 Governors asked a number of questions including:
3.5.1 What was the process to guarantee the College would be properly funded next year? Last year the additional funding had been requested too late. The timeline would start in October; the Council would put in numbers to the DfE which would then decide whether to fund them but given there was a legal obligation, it should do. The College would work with the Council to ensure 2025/26 numbers were realistic. Funding for 2025/26 should then be known in March.
3.5.2 What would happen if only £600k additional was confirmed? This College would accept it but would put in writing that it was on the understanding that the Council would support it to get full funding in 2025/26.
3.5.3 Why had this happened this year? There had been growth in numbers which the Council had not communicated top the College. In addition, once in post the new Head of Supported Learning had identified that many of the current students were eligible for high needs funding which had not previously been realised.
3.5.4 The College should make sure it was put everything in writing.
3.5.5 Was the increase a local or a national issue and did this present additional risk? There was growth nationally and so pressure on budgets everywhere.
3.6 Governors requested an update on High Needs funding at the next meeting.
Chan Kataria joined the meeting
3.7 As a further matter arising, an update on staff pay awards and staff contracts was given.
3.7.1 There was no additional funding nationally for staff pay and the AoC was likely to recommend around 2-3%; 2% was factored into the College budget. There was a strong possibility that there might be industrial action.
3.7.2 The agreement for teaching staff contracts had been signed by UCU; Unison had not yet signed the agreement for support staff and was querying why the term time only calculation was different; the new calculation had therefore not yet been paid. Dialogue was ongoing.
3.8 Governors asked a number of questions including:
3.8.1 What would happen if Unison said the calculation was not correct? The College would have to see if any claims were made but it was for Unison to show the calculation was not right and the College would defend its position.
3.8.2 Was it likely that Unison would accept the new contracts? It was hard to know; there would continue to be dialogue.
Enrolment Update
4.1 The Acting Principal gave an update on student enrolment. The following points were highlighted.
4.1.1 16-18 enrolment had gone well with several curriculum areas exceeding plan. There would be some drop out but current numbers were around 4,100, well above the allocation of 3,700. The sector as a whole was seeing growth in 16-19s.
4.1.2 There might be additional funding available in year to support growth in 16-18 numbers although this was subject to affordability. T levels were around 50 down and had been impacted by the increase in the GCSE English grade boundary.
4.1.3 Adult recruitment continued throughout the year but was looking to be on track.
4.1.4 Apprenticeships were expected to hit the September starts target.
4.1.5 HE remained challenging and was 40-50 down.
4.2 Governors asked a number of questions including:
4.2.1 When would HE numbers be finalised? Any time now, it was unlikely there would be many more enrolments at this stage.
4.2.2 In cash terms did the gaps in enrolment even out? They did, the 16-18 overall recruitment should net off against the T level under recruitment and the HE gap should also be compensated for by recruitment elsewhere.
4.3 Members noted the update on enrolment
Health and Safety Annual Review 2023/24
5.1 The Director of Estates and Campus Services presented the annual health and safety statement for 2023/24. The following points were highlighted.
5.1.1 112 work related accidents were reported in 2023/24, a reduction on last year’s number (160). As in previous years, the most accidents were at FPC where more manual subjects were taught but there had been a significant reduction at FPC; this was attributable to the success of toolbox talks and awareness raising within curriculum areas.
5.1.2 There had been no RIDDOR events.
5.1.3 Staff training completion was the highest ever. High numbers of 16-18 year old students had also completed training; adult figures were lower by the nature of the types of courses many attended.
5.1.4 2023/24 had been a difficult year in terms of staffing the campus wardens team although the team had now been increased and was almost at full complement.
5.1.5 There had been 238 incidents compared to 275 in the previous year. There continued to be more incidents occurring at APC compared to the other campuses, which was reflected the number of students based at APC.
5.1.6 A robust programme of service and maintenance was undertaken to ensure that equipment and installations were checked in line with the frequency required by the legislation and manufacturers’ recommendations.
5.2 Governors asked a number of questions including:
5.2.1 The Health and Safety Committee worked well and demonstrated that H&S was taken seriously. At APC, the messages about wearing lanyards appeared to be getting through. Noted.
5.2.2 If the types of incidents were aggregated up, particularly behaviour related incidents, was sufficient attention being given to how these might be addressed including through national initiatives such as the Young Futures Programme? There were some cultural issues with students coming with different expectations about behaviour; the College tried to educate them about what was acceptable. More students were also coming with complex needs. The College would need to see if any funding or support might be available to address specific themes.
5.3 An update on the planned fencing around APC was given. This should have taken eight weeks but had been in the planning process for 11 months. The Chair had written to the City Mayor and a response from the planning department had since been received turning down the application as unacceptable.
5.4 Governors asked a number of questions including:
5.4.1 Whether the College’s safeguarding concerns had been taken into account. These had been stressed in the Chair’s letter but the response did not really address them.
5.4.2 Whether the fencing would have had an impact on the number of incidents. It would have made them easier to manage and would probably have reduced the number.
5.4.3 Could the decision be challenged? A response would be sent to the Mayor and advice would also be taken to see if a challenge or appeal could be made.
5.5 Members noted the health and safety annual report.
Sophie Strevens-Robinson joined the meeting.
Solar Power Purchase Arrangement
6.1 The Director of Estates and Campus Services presented a proposal for a solar power purchase arrangement. The following points were highlighted.
6.1.1 The College had been exploring the installation of Photovoltaic (PV) systems on large roof spaces through which it could generate its own electricity and reduce consumption from the grid.
6.1.2 A number of suppliers had been approached; only one supplier, Ylem, signalled their interest.
6.1.3 The project required no upfront capital for the install, however the requirement was for a proposed 25 year agreement to be signed with power generated by the PV bought by the College. This felt a bit long and a 15 year agreement would be preferable.
6.1.4 Legal advice had been received and was being considered.
6.2 Governors asked a number of questions including:
6.2.1 The main issues and risks included the viability of the company, how realistic was it that savings could be achieved and could the College get out of the agreement if it went wrong. These would all need to be taken into account. The College would also need to look at the costs and savings of acquiring its own panels.
6.2.2 The costs associated with the structural engineer needed to be factored in. Agreed.
6.2.3 What would happen after 25 years? There was an option for the panels to revert to the College.
6.2.4 The sustainability reasons for considering the proposal were strong and it was worth pursuing. Agreed.
6.3 Members agreed in principle to the College exploring the solar panel PPA proposal and requested a formal proposal be brought back if it was decided to proceed.
Capital Projects Update - Aeronautical
7.1 The Director of Estates and Campus Services presented an update on the aeronautical project. The following points were highlighted.
7.1.1 The tender for the Aeronautical build was completed in June 2024, with a presentation made to a Special meeting of F&GP on 11 July 2024 confirming GF Tomlinson as the winning tenderer with a contract figure of £4,124,312 + VAT (plus insurance bond required at £12,000). Following this, GF Tomlinson had started to dispute figures and the tender value increased. The College therefore opened negotiations with Wilten Construction and agreed a contract sum figure of £4,137,736 + VAT (plus insurance bond at £10,000).
7.1.2 Wilten Construction was a locally based contractor in Market Harborough and had recently completed Space Park Phases 2 and 3 for Leicester University. They were currently building the Ian Marlow Centre for Leicester City Council and finalising the Royal Enfield building.
7.1.3 The project was on track after a slow start. There was a 44 week contract works period with OfS spend complete by March 2025.
7.2 Governors asked a number of questions including:
7.2.1 Whether due diligence had been completed on the contractor. The usual financial checks had been completed and reference sought.
7.2.2 44 weeks seemed tight. It was but once underway, the timeline should be achievable.
7.3 Members noted the update on the aeronautical project.
Pay Gaps
8.1 The Director of HR presented a report on pay gaps. The following points were highlighted.
8.1.1 The College was required to publish gender pay gap data but had decided to also report on the ethnicity pay gap from March 2021 and the Disability pay gap in March 2022 using the same methodology.
8.1.2 The mean and median pay gaps for gender had both increased this year, by 0.3 and 2.5, respectively. The mean ethnic pay gap had increased by 0.8; the median pay gap was unchanged.
8.1.3 There was little comparative data available for Disability Pay Gap reporting as it was not mandatory, however the College data compared favourably with other data available.
8.1.4 The living wage had impacted on the gender pay gap. The introduction of market supplements in traditionally white male areas (construction and engineering) was likely to have impacted on the ethnicity pay gap.
8.1.5 There was not much change because of the way the pay scales were constructed with a lot of workers employed on lower scale roles. The College continued to employ all its own staff and did not outsource which meant that comparisons with other colleges were not always realistic.
8.2 Governors asked a number of questions including:
8.2.1 The data showed a variation in the median over time; why was this? This was likely to be attributable to use of market supplement which started in 2022/23.
8.2.2 Did the national living wage help close the gaps? It did although it was unlikely to make much impact now unless something radical was done with the pay scales.
8.2.3 Did the College sufficiently understand the trends in the data and which issues were structural? The issues were well understood and the appendix provided more analysis. The College continued to have a predominantly female workforce. In terms of ethnicity there was still more to do to encourage more managers from non-while backgrounds.
8.2.4 What could be done in terms of addressing the gender issue without changing the structure of the workforce? Employing more men in lower paid jobs would affect the data but these roles tended to be part-time or term time only and were less attractive to me.
8.2.5 What had Derby College done that was significantly different? This would be followed up.
8.2.6 Was there an action plan to address the issues? A lot of work had been undertaken including with the Back Leadership Group, the aspiring leaders programme, mentoring and coaching.
8.2.7 Had this been discussed with the unions? It would be followed up with the race equality and disability networks who would be more interested than the unions.
8.3 Members noted the pay gaps report.
HR KPIs
9.1 The Director of HR presented a report on HR KPIs. The following points were highlighted.
9.1.1 The workforce was largely stable showing a slight increase in headcount with 1,100 staff employed or 709 Full Time Equivalent (FTE). This was a reversal of the downward trend over the previous three years.
9.1.2 There had been little movement in the composition of the workforce by protected characteristic.
9.1.3 Sickness levels had gone up slightly but compared well with other colleges. The main reason for illness was musculoskeletal and psychological illness had decreased which was felt to be attributable to the extensive work around wellbeing.
9.1.4 Turnover was low.
9.1.5 There had been some progress in more black applicants being successful in the recruitment process although there remained a drop off when it came to appointment. There was still more work to do around disability.
9.1.6 The casework numbers remained low with most associated with long term sickness.
9.1.7 100% of appraisals had been completed and mandatory training completion was very high.
9.2 Governors asked a number of questions including:
9.2.1 The support and initiatives adopted seemed to be making a difference.
9.2.2 Was there a need to re-induct staff who had been with the College a long time? All staff were now required to complete training on the Employee Standards and Code of Conduct which set out the main expectations for staff. Communications had been invested in and there was already regular training and a range of updates provided to ensure staff were made aware of changes to policies and procedures. There was no resource to conduct a bigger project.
9.2.3 Could some of this be picked up in appraisals? It could.
9.2.4 Was there any intelligence about potential risks in terms of the aging workforce? The College clearly had an older workforce but was trying to equip younger staff to step up as part of succession planning. Some of the low turnover was also partly due to people progressing internally.
9.2.5 What were the levels of union membership and did this present a risk? This would not be known unless industrial action took place but it was not thought to be high. Relations with the unions were good.
9.2.6 The implications of Making Work Pay would need to be considered. Agreed. This would be brought back.
9.3 Members noted the HR KPIs.
9.3.1 The Committee agreed that there was no need for members of staff to leave the meeting for this item given the factual and historical nature of the report.
SPH Pay and Remuneration Annual Report
10.1 The Director of HR presented the Senior Potholder Remuneration Annual Report. The following points were highlighted.
10.1.1 The report described the remuneration of senior postholders and the ELT for the past year.
10.1.2 Decisions had been made by the Corporation in line with the Senior Pay Salary Framework.
10.1.3 The pay multiple for the Principal had gone up as a result of the pay award.
10.2 In response to a question it was confirmed that the Acting Principal’s role on East Midlands Housing was done in his own time.
10.3 Members agreed to recommend the report to the Corporation.
Finance Report (Period 12)
11.1 The Director of Finance presented the finance report (period 10) and summer reforecast. The following points were highlighted.
11.1.1 The year to date result was an EBITDA surplus after restructuring costs of £481k compared to the forecast EBITDA surplus of £783k.
11.1.2 16-18 learner responsive learner numbers were above allocation by 212 overall; the College had received additional in year funding for this.
11.1.3 The College would exceed its AEB allocation and additional funds of £400k were expected to be received post year end. The current predicted year end position showed an increase of 7% compared to the same point last year and was 4% above the allocation.
11.1.4 Apprenticeship income was below target by £151k due to funding relating to end point assessments not being as high as expected. Overall, apprenticeship funding had increased by 15% on the previous year. Work was underway to make sure claims were made in a timely manner.
11.1.5 Grant income had increased as a result of some project income previously designated as capital being recategorised.
11.1.6 Cash was around £4m and lower than it had been but daily cashflow forecasts for the next two years monitored the position carefully.
11.1.7 Although the College had not met one of its three bank covenants for the year, a waiver had been provided by the bank for this covenant.
11.1.8 The College had achieved a ‘requires improvement’ financial health rating based on these accounts.
11.1.9 Work continued to be undertaken on the draft accounts and the final position was subject to the external audit review.
11.1.10 These figures did not include FRS102 pension adjustments relating to enhanced pensions and the Local Government Pension Scheme. These adjustments were not included within the calculations for bank covenants and financial health.
11.2 Governors asked a number of questions including:
11.2.1 How would capital expenditure be designated? Anything under £1k would not be capitalised.
11.2.2 Was there any change in terms of FRS102? It would come out as a surplus but this would be reduced to nil as the asset could not be realised.
11.2.3 Was a clean audit expected? It was.
11.2.4 Why was there a difference between the shift in the EBITDA and the total comprehensive income? The EBITDA had moved more than total comprehensive income because adjustment needed to be made for capital grant release.
11.2.5 Section 5 showed the extent of the investment made and the tangible results to improve the student experience.
11.2.6 What point score was needed to achieve a Good rating? 180 points; a Good rating was predicted for this year although any pay award might impact on the financial position.
11.3 Members noted the period 12 finance report.
Regularity Self Assessment Questionnaire
12.1 The Director of Finance presented the regularity self-assessment questionnaire. The following points were highlighted.
12.1.1 The questionnaire was published annually by the ESFA and looked at the policies and procedures in place to fulfil the accountability requirements.
12.1.2 There had been a lot of changes in the previous year following reclassification. This year’s questionnaire was similar to last year’s.
12.1.3 The questionnaire was used to underpin the External Auditor’s work, and no concerns had been raised at this stage.
12.1.4 The Audit Committee had reviewed and commented on the responses.
12.2 In response to a question it was confirmed that DfE approval was being sought for the interim leadership arrangements.
12.3 Members agreed to recommend the Regularity Self-assessment Questionnaire for signature.
Procurement Changes
13.1 The Director of Finance presented a paper reporting on the implications of the Procurement Act. The following points were highlighted:
13.1.1 The Procurement Act 2023 would come into force on 24 February 2025 and would form the basis of procurement regulation from that date.
13.1.2 The Act applied to all public sector bodies including colleges that procured goods, services or works above certain thresholds. Tenders and contracts above threshold levels would need to be published on a new enhanced tendering platform ‘Find a Tender’ and suppliers would need to be preregistered on the new platform.
13.1.3 Transparency requirements would be the most significant change for the College. Publication of notices would be required from initial procurement planning through active procurement and then throughout the life of active contract management.
13.1.4 There would be greater scrutiny over procurement with the potential for sanctions and claims against the College if it failed to follow the necessary procedures.
13.2 Governors made a number of comments including:
13.2.1 It would be interesting to track if the changes had any impact on which suppliers the College used particularly SMEs.
13.2.2 Without a procurement person this could be an intense workload.
13.2.3 Staff who were involved in order needed to understand the new regime, as did current suppliers. Agreed; training had been provided and additional resources would be shared with relevant staff.
13.2.4 It was unusual not to have a procurement person in an organisation of this size. The amount of discretionary non-pay was very small but additional staff resource would be put in to support the changes.
13.3 Members noted the update on the Procurement Act.
13.4 The Director of Finance presented revised Financial Regulations for approval. The following points were highlighted:
13.4.1 The Financial Regulations had been updated to reflect changes in the Procurement Act.
13.4.2 Following agreement at the Special Corporation meeting on 29 August, some temporary changes to approvals within the Financial Regulations were being made during the interim leadership arrangements. Although the arrangements affected the Financial Regulations, it was not considered practical to formally amend the regulations.
13.5 Members:
13.5.1 Noted the temporary changes to approvals within the Financial Regulations during the interim leadership arrangements.
13.5.2 Approved the changes to the Financial Regulations.
Bad Debt Write Off
14.1 The Director of Finance presented a paper requesting authority to write-off debts that were considered uncollectable. The following points were highlighted:
14.1.1 It was proposed that two debts totalling £4,624 were written off.
14.1.2 The debts had been chased as far as possible and were now considered to be uncollectable.
14.2 Members approved the write-off of uncollectable debt of £4,624.
Committee Self Assessment
15.1 The Director of Governance and Policy presented results of the Committee self assessment. The following points were highlighted.
15.1.1 Overall the self-assessment was generally positive. Impacts were identified and evidenced and governors identified a number of strengths.
15.1.2 Actions and areas for improvement included continuing to review membership; providing workshops on areas of complexity; executive summaries for reports; monitoring policy developments including any impacts of devolution on unprotected Adult Skills Funding; active control and better reporting of capital expenditure.
15.2 Members noted the Committee self-assessment.
Staff Development Activities Report 2023/24
16.1 Members received and noted the report on staff development activities.
Trade Union Facilities Time Report
17.1 Members received and noted the report on trade union facilities time.
Employment Tribunals 2023/24
18.1 Members received and noted the report on employment tribunals.
18.2 In response to a question it was confirmed that Employment Tribunals were a matter for the Principal and so would not routinely be considered by governors.
Treasury Management
19.1 Members received and noted the report on Treasury Management.
Waivers of Financial Regulations
20.1 Members received and noted the report on waivers of financial regulations.
Date of Next Meetings
4 December 2024 (4.30pm - followed by Corporation Christmas Dinner)