UNIVERSITY OF EXETER
CNL/15/55
COUNCIL
A meeting of the Council was held on Thursday 21 May 2015 at 1.30pm in the Council Chamber,
Northcote House.
PRESENT:
Pro-Chancellor, Miss S J Turvill (Chair)
Mr C J Allwood
Provost, Professor J M Kay
Mr G Brown
Dr S Buck
Ms A Conroy
Ms T Costello
Mr R Davies
Professor K E Evans
Ms R Gillies
Ms J Hargadon
Mr P J M Hodges
Mr R M P Hughes
Mr P Lacey
Sir Robin Nicholson
Mr C C Pomfret
Professor T A Quine
Dr A M Shaw
Vice-Chancellor and Chief Executive, Professor Sir Steve Smith
Professor S Tomlinson
Ms S Wilcox
IN ATTENDANCE:
Director of Communication and Corporate Affairs, Mrs J Chafer
Chief Financial Officer, Mr A Connolly
Deputy Vice-Chancellor, Professor M Goodwin
Deputy Vice-Chancellor, Professor N Kaye
Chief Operating Officer, Mr R G Pringle
International Admissions & immigration Compliance Manager, Ms S J Rutterford (in
attendance for discussions under minute 15.44)
Executive Officer, Mrs J Williams
APOLOGIES:
Mr N Bull
Ms J A Marshall
Ms B Rigg
Ms M I Shoebridge
Deputy Vice-Chancellor, Professor N J Talbot
15.39
Declarations of Interest
Members NOTED the register of members’ interests in relation to the business of the agenda
including standing declarations of interest.
15.40
Minutes
The minutes of the meeting held on 16 April 2015 were CONFIRMED (CNL/15/39).
15.41
Matters Arising from the Minutes
It was noted that the Annual Ethics report and Dual Assurance update that had been postponed
from the meeting in April would now be considered at the meeting of Council in July.
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15.42
Vice-Chancellor’s Report
(a) Council RECEIVED a report from the Vice-Chancellor (CNL/15/40), who drew attention to the
following topics:
(i)
Chief Operating Officer Announcement – Geoff Pringle would be retiring as Chief
Operating Officer (COO) at the end of this academic year. The Vice-Chancellor
personally thanked Geoff for his outstanding contribution to the University and for being a
fantastic colleague during his time at Exeter.
It was noted that Jacqui Marshall would take up the role of interim COO from 1 July
2015. She would be supported in the arrangements by Jane Chafer, Andrew Connolly
and Linda Peka. Responsibility for Council and Geoff’s Dual Assurance portfolios would
be managed by these colleagues. This would be temporary and in addition to their
substantive roles. This would enable a gradual handover of responsibilities and
commitments whilst providing continuity until the role of Registrar or COO was recruited
later in the year.
(ii)
The Rolf Luft Award – Professor Andrew Hattersley of the University of Exeter Medical
School had been awarded the prestigious annual Rolf Luft Award by the Karolinska
Institutet for outstanding scientific contribution in endocrinology and diabetes. Council
recorded their congratulations to Professor Hattersley on this much-deserved award.
(iii) Associate Dean for Research, College of Humanities – Following an internal process,
Professor James Clark had been appointed as the Associate Dean for Research in the
College of Humanities. Professor Clark is a historian, whose research explores religion,
learning and book culture in Late Medieval England.
(iv) Appointment of the Lazenby Chaplain – The St Luke’s College Foundation Trustees had
announced that the Reverend Chantal Mason, an alumna of the University, had been
appointed as the University’s Lazenby Chaplain and would take up post on 1 August
2015.
(v) WhatUni Student Choice Awards 2015 – The University had won a prestigious award for
providing the best international student experience of any university in the UK, receiving
the ‘International Student Choice Category’ at the WhatUni Student Choice Awards held
on 23 April 2015. More than 20,000 university students from across the UK had cast
their votes for the awards.
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(vi) Complete University Guide – Exeter had maintained its ranking of 10 in the Complete
University Guide (CUG) 2015. Exeter was also now the top ranking South West
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institution with Bath falling to 12 . Both Surrey and Lancaster had entered the top ten.
Exeter featured in 37 of the 67 subjects covered in this year’s Guide and had 29 subjects
with top ten rankings (78%).
Since the written report was produced some further analysis of Exeter’s subject
performance had been undertaken. Of the 29 subjects with top ten rankings, 11 were
top five and Exeter was number one in Sports Science and Drama. This meant that
Exeter was ranked third overall for the number of subjects in the top ten, behind only
Oxford and Cambridge in this measure.
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Exeter ranked 8 for the percentage of its subjects which were in the top ten and 10 for
the percentage of its subjects which ranked in the top five.
(vii) University of Law – The University had launched a collaboration with the University of
Law (ULaw) to give students the opportunity to complete both the academic stage of
their training and the Legal Practice Course (LPC) at the University of Exeter. From
September 2015, non-law graduates would be able to convert to law after completing a
Graduate Diploma in Law (GDL) course taught by ULaw at the Streatham Campus. The
Legal Practice Course (LPC), which was the next stage of the training for LLB and GDL
graduates wishing to become solicitors, would be offered from September 2016.
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(viii) Athena SWAN awards – The results of the latest Athena SWAN applications had been
announced and the University was successful in all of its November submissions. The
University’s institutional level Bronze was renewed for a further three years. The ViceChancellor thanked Professor Mark Goodwin for his outstanding leadership in this area,
and the team in Human Resources that had worked very hard to deliver the outcomes.
(ix) Outcome of the General Election – The election of a Conservative majority government
evidently resulted in a clear set of opportunities and challenges for the higher education
sector in England. There were four key issues that needed to be focused on and
planned for: Immigration policy, Public Spending cuts, EU referendum and Tuition fees.
(x) Post-election Cabinet Reshuffle: BIS Ministerial Appointments – Exeter Alumnus and MP
for Bromsgrove Sajid Javid had been appointed Secretary of State for the Department of
Business, Innovation and Skills.
Another Exeter Alumnus and MP for Harlow, Robert Halfon, had been appointed Deputy
Chairman of the Conservative Party.
Jo Johnson, brother of Boris Johnson, had been appointed as the new Minister for
Universities and Science, succeeding Greg Clarke who had been promoted to Secretary
of State in the Department for Communities and Local Government.
Locally Ben Bradshaw had been re-elected Labour MP for Exeter with an increased
majority of 7,000. All other seats in Devon and Cornwall had been won by the
Conservative Party, with Sarah Newton being re-elected MP for Truro and Falmouth.
(b) In addition to the written report, the Vice-Chancellor drew attention to the following:
(i)
Re-election to the UCAS Board - The Vice-Chancellor had been re-appointed to the
UCAS Board as Chair for a second four-year term – until 31 August 2019. This was
approved by the Board at its most recent meeting.
(ii)
Cornwall Council - Andrew Kerr, Chief Executive of Cornwall Council, had resigned to
take up the post of Chief Executive of Edinburgh City Council. He was expected to take
up the post later this year. Andrew had shown clear commitment to internationalising
Cornwall and bringing in inward investment, including through supporting the University
in attracting international students to Penryn. The University had every expectation that
it could continue to develop its strategic relationship with the Council under the new
leadership and a meeting had been requested to ensure that momentum did not stall.
(iii) Falmouth and Plymouth Universities - The Vice-Chancellor, Chair of Council and other
senior colleagues had met the leadership teams of both Falmouth and Plymouth
Universities recently to discuss matters of mutual interest.
(iv) Director of Development and Alumni Relations – it had been announced that Sarah
Jarman had decided to leave the University as Director of Development and Alumni
Relations (DARO). The Vice-Chancellor recorded his thanks to Sarah for the
commitment and enthusiasm she had shown in her leadership of DARO and for the
valuable contributions she had made to Exeter and wished her every success for the
future.
(v) Innovation Exeter – Professor Mark Goodwin provided members with
Innovation Exeter:
a briefing on
•
The University was taking a clear leadership role in drawing together a range of
partners to look at how growth in the wider Exeter economy was supported, whilst
building on the knowledge asset provided by the University.
•
Innovation Exeter was the brand under which Exeter would play its economic
anchor role and through which it would support, with partners, the development of
an innovation ecosystem for the wider Exeter area and the economy of the Heart of
the South West Local Enterprise Partnership (HoSW LEP).
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•
This approach would embed the place based innovation agenda within the wider
strategic priorities of the LEP and ensure that the University had a strong voice in
both lobbying for growth funding for the area and University projects. It would also
ensure that this had maximum impact through generating higher level skilled jobs
growth, raising productivity and business development as well as wider cultural
benefits.
•
A number of critical actions had been identified and colleagues were now liaising
with key partners to start to develop these. Meetings had been held with Devon
County Council and Exeter City Council this week, and Exeter City Council had
seconded their Economic Development Director to the University for 12 months from
July to work on this.
•
A series of transformational initiatives would sit at the heart of Innovation Exeter;
with the Global Environmental Futures being one such initiative. Proposals would
be presented to senior civil servants in BIS as well as local politicians in the coming
weeks. There was a need to move swiftly to put Exeter on the map as a place to do
business.
The Vice-Chancellor recorded his gratitude to Professor Goodwin for his leadership in
this area, working with Sean Fielding.
(vi) DLHE Analysis – The Vice-Chancellor was delighted to report that Exeter’s Graduate
Destination Score had improved from 79.6% to 82.4% this year in the DLHE survey.
This was an excellent result and an incredible improvement. The survey investigated
what students were doing six months after graduation. The sector data would not be
published until July 2015 and so colleagues were unable to see how Exeter had
performed compared to its competitors until later this year.
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(vii) Leiden Rankings – the University had heard yesterday that it had been ranked 6 in the
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UK, 8 in Europe and 34 globally in the CWTS Leiden Ranking 2015. Exeter had risen
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24 places since 2014 in the overall rankings (58 globally in 2014).
The Leiden ranking was based on impact (measured by citations) and proportion of
publications in the top 10% most frequently cited (compared with other publications in the
same field). It was probably the best objective measure of quality not quantity in science
subjects based on published work, and ranked the scientific performance of 750 major
universities worldwide.
(viii) The Outlook for Public Finances - the Vice-Chancellor shared with members a briefing
from the Institute for Fiscal Studies (IFS) that had been given at a UUK meeting by Paul
Johnson, Director of the IFS. The briefing considered the outlook for public finances
under the Conservative Government.
15.43
Corporate Strategy (first bite of cherry) (COMMERCIAL IN CONFIDENCE)
15.44
Admissions Update (COMMERCIAL IN CONFIDENCE)
(Sally Rutterford in attendance)
15.45
Finance and Planning (COMMECIAL IN CONFIDENCE)
(a) THIRD FINANCIAL FORECAST 2014/15
(b) DRAFT BUDGET 2015/16 AND LATER YEAR FINANCIAL PLANS TO 2019/20
15.46
The New Accounting Standards: Impact on Financial Statements
Council CONSIDERED a paper on the new accounting standards: impact on financial statements
(CNL/15/45).
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Andrew Connolly introduced the paper and highlighted the following points from it:
•
The last change to accounting standards was made in 2009. However, next year the entire
UK accounting code would be changed with 30 standards being replaced with a single
standard.
•
The paper quantified the impact of the changes on income, net surplus and net assets.
•
One of the changes was the need to account for unused leave at balance sheet as financial
liability. This had not been accounted for in the past as the previous standards had been silent
about it. The new standard made it an explicit requirement.
•
Another change affected the University’s UPP transaction which would come on-balance sheet
as both an asset and a liability – but in an unusual way. It would come on-balance sheet as an
asset and liability that exists for one year and during that year it would be written off entirely.
This would then be repeated each year.
•
The report illustrated the impact of the current USS deficit plan also coming on-balance sheet.
However, that plan had only 7 years to run and was set to recover £2.9bn. The new plan was
expected to be around 17 years and would need to recover £5.3bn. Therefore the balance
sheet impact would be higher than shown in the report.
•
The paper also pointed out that with every new hire who joined USS, the University would face
a large change to the surplus, reflecting the Present Value (PV) of their share of the deficit
recovery plan over 17 years. When staff left the University there would be the opposite effect
with a large capital-like credit.
•
The conversion of the 2013/14 figures in the paper did not reflect the volatility that would be
experienced in the future. For instance when USS had a valuation every three years there
would be a large debit or credit to the statements. Another example of this related to capital
grants. These were currently deferred and released to the surplus over the life of the project.
This meant that the surplus benefited from an annual credit. In future there would not be that
credit as the cash value of grants received would be credited. This would have a significant
impact on the surplus, both up and down, depending on the size of capital grants received
each year.
•
This was not just a financial reporting issue. Next year’s budget and five year plans would
need to be converted in to the new standards. This would be done after the Council meeting
in July but before the first financial forecast for the year.
•
The new standards would afford the opportunity to change and adopt new accounting policy
choices. In July, Council would be invited to approve new accounting policies based on those
set out in this paper. These would be considered by Dual Assurance and the Audit Committee
before Council.
•
Finance Services were well advanced with preparatory work to implement the changes from 1
August 2015. It was vital to have certainty over the financial reporting and that the University’s
auditors accepted the proposals well before the first reporting year in 2015 so that there were
no surprises.
Richard Hughes commented on the changes and noted that there would be issues in measuring
surpluses / deficits. The underlying EBITDA figures would need to be normalised and work done
on how the numbers that could be controlled in the accounts were managed. It would need to be
clear what managers were and weren’t accountable for.
All the University’s property assets would be re-valued and it would be helpful to show the highest
value on the balance sheet. There was also a lot of background work required on covenants with
banks and it would be necessary to come back to Council at some point on this.
In discussion with members the following points were noted:
•
In the short to medium term it was not thought that banks would view Universities as riskier
institutions in terms of rates of interest for debt. Banks had signalled that they were not using
this as an opportunity to re-price.
However, should deficits consistently be reported it was
Page 5 of 7
not clear how they would view the narrative. The pension fund would be an issue and the
sector would face higher pension fund protection levies as a result.
•
Cash balances would actually go up under the new rules due to endowment rules.
•
The change in bank covenants could result in charges by the banks. However, as this was a
sector issue, Universities were discussing this with banks to establish a joint approach.
Council NOTED the report. Council would be asked to approve a set of new accounting policies
for 2015/16 after they had been considered by Dual Assurance and Audit Committee.
15.47
Future Finance Project (COMMERCIAL IN CONFIDENCE)
15.48
Transformation Programme Update
Council RECEIVED a progress report on the Transformation Programme (CNL/15/48).
The paper provided a summary of progress to date across the Transformation Programme and its
associated projects.
Progress across the Efficiency Projects was good; business cases were agreed on four of the nine
projects, with three more to follow by the end of May. Of those four, three were already in the
implementation phase; the fourth would commence implementation at the end of the month.
As per the Transformation Programme business case timeline and roadmap (Appendix 1), the
Revenue Projects were now commencing under the leadership of a new Revenue Generation
Group.
A new senior leadership structure for Professional Services was communicated to the University at
the end of April and progress to establish the new team before the start of the academic year was
on track.
Against the original headroom improvement plan the transformation project was projected to
deliver benefits ahead of the original profile; 34% and 27% ahead of plan in 2015/16 and 2016/17
respectively. Colleagues were also confident that the remaining £9m of the total £25m would be
found through additional savings/existing efficiency and revenue projects as they completed their
scoping phase.
Organisational Development (OD) capacity was being increased with development programmes
focussed on managing change launching to senior managers in Professional Services and
Colleges in the coming weeks.
The University’s OD and Change Team were being established in parallel and would be in place
by the end of July to support a continuous programme of leadership development.
15.49
Infrastructure
(a)
NORTHCOTT THEATRE
Council NOTED that the Chair of Council had APPROVED the release of the sum of £629k
from the Council Capital Strategic Reserve under the new process for this funding line
(CNL/15/49).
This sum was for works to the Northcott Theatre so that it could be utilised for teaching in
2015/16.
To enable the work to be completed by 30 August 2015 in time for timetable scheduling, the
work needed to commence on or around 21 April 2015 as stated in the project PID. This
project arose as mitigation in connection with extending the teaching day from September
2015 and included new lighting and audio visual equipment to the 464 seat theatre space in
addition to some works to the front of house areas.
This was approved by Capital Strategy Group (CSG) at its meeting on 21 April 2015.
It was also noted at CSG that the Council Capital Strategic Reserve line had increased from
£39.6m to £42.4m, due to income from HEFCE TCIF and RCIF grants and the return of
some underspend from other projects.
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(b)
INFRASTRUCTURE PROJECTS
Council RECEIVED a report on infrastructure projects (CNL/15/50).
(c)
CAPITAL STRATEGY GROUP
Council RECEIVED the minutes from the meeting of the Capital Strategy Group held on 21
April 2015 (CNL/15/51).
(d)
15.50
BUILDING A HIGH PERFORMANCE COMPUTING ENVIRONMENT (COMMERCIAL IN
CONFIDENCE)
Affixing the Seal of the University
Council AUTHORISED the fixing of the University seal to the documents listed in CNL/15/53.
15.51
Amendment to Ordinance 21: The Powers of Senate
Council APPROVED the revised wording to Ordinance 21: The Powers of Senate
(CNL/15/54).
15.52
Chair’s Closing Remarks (COMMERCIAL IN CONFIDENCE)
JW/JAL
15 June 2015
M:\Exec Officer\COUNCIL\2014-15\May 2015\Council Minutes 21 May 2015.doc
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