SOUTH EASTERN REGIONAL COLLEGE
Governing Body
Minutes of the meeting of the Governing Body held on Tuesday 5th May
2015 at 6.00 p.m. in the Bangor campus
Item
No
1.
Item
Attendance/ Apologies
Present: Dr R. Davison, Mr D. Lamb, Mr M. Graham, Mr E. Jackson, Mr K. Webb, Mr G.
Hetherington, Mr N. Bodger, Mrs K. Scott, Ms S. Corbett, Ms A. Reid, Mr M. Simcock, Mrs B.
Larkin, Prof A. Woodside, Mrs K. Fraser.
In attendance: Mr T. Martin (Head of Finance), Ms D. Smyth (Secretary to the Governing Body).
Apologies: Mr S. Gallaher, Mr S. Pollard, Mrs H. Reid, Ms L. Martin.
In the Chair: Dr R. Davison.
The Chair welcomed everyone to the meeting.
2.
Declarations of conflicts of interest
The Chair asked if there were any conflicts or perceived conflicts of interest in relation to any
item on the agenda. There were no such declarations.
3.
Minutes
4.1 Minutes of the meeting held on 24th February 2015
The minutes of the meeting held on 24th February were agreed as a true record on the proposal
of Mr Jackson seconded by Mr Graham.
4.
Matters arising:
There were no matters arising.
5.
Chairman’s Business
5.1
Context of the meeting
The Chair said that this would be a very important meeting for the Governing Body. At its
February meeting, the Governing Body was made aware of the reductions in the level of funding
for the sector and some of the implications for SERC. The College had also been made aware of
the FE sector’s intention to avail of the Voluntary Exit Scheme (VES) which would be the main
mechanism to deal with the anticipated College deficits. The Chair continued that the situation
had moved on and, although the final picture was not yet clear, the Governing Body must make
a decision this evening on the VES. He said that SERC faced a considerable deficit in 2015/16
not only because of the reduction in DEL funding but also increased costs and VES was a
valuable mechanism to help achieve a balanced budget. He said that the time-table was agreed
by the Department and College Principals and there was considerable pressure to take this
forward, although reductions in staffing levels could impact on the curriculum offer and on
quality.
The Chair continued that this was a major strategic problem in itself; however, as a Governing
Body we have to think about the future which may involve further reductions by DEL and a
continued rise in costs, with fixed costs constituting an increasing proportion of our overall costs.
Diminishing income, higher costs, staffing reductions – he said that this amounted to a major
1
strategic problem for the Governing Body which would go beyond 2015/16. He said there would
be further discussion on the VES in confidential business.
5.2
Governor replacements
The Chair reported that this had been a long process. There were 28 applications and 16 people
were interviewed over four days. He said that the Governing Body would need two replacement
Governors and was now awaiting the Minister’s decision.
6.
Student Governor Report
Ms Reid said that Aware Defeat Depression had been talking to students and FASA had come
into the College to talk about legal highs.
She concluded by saying that the Student elections would be taking place the week commencing
1st June.
7.
Committee Report – Education
7.1
Report from Committee Chair
The Chair said that Mrs Reid was unwell and was not able to attend the meeting.
He said that there had been an interesting presentation on EU Programmes and a lengthy
discussion on Causes for Concern where members had noted that a young student had recently
died. The Chair continued that the main item of business was the presentation of the
Curriculum Plan. He said that there had been a lengthy debate and concerns were raised with
regard to different elements of the paper and its relationship to the VES. The Curriculum Paper
was to be revised following the discussion and was not approved.
7.2
Minutes of the meeting held on 10th February 2015
These minutes were adopted on the proposal of Dr Davison, seconded by Mrs Scott.
7.3
Minutes (unconfirmed) of the meeting held on 14th April 2015
Mr Jackson queried the figure of £410k on p4 of the minutes and the Principal said that this
figure should be £110k. The minutes were noted.
8.
Committee Report – Audit
8.1
Report from Committee Chair
Mr Lamb said that the management team had referenced the employer checklist in the
Whistleblowing Good Practice Guide with its own policies and procedures and the Committee
was content that everything had been covered.
He continued that, to date, there had been three internal audit reviews this year, and all had
received substantial assurance ratings. The latest one was an IA Review of Payroll and Mr Lamb
said that this was an excellent performance by the College. He said that the Committee had
been updated on the sector wide project to take forward preparations for the implementation of
the new SORP and a further report would be provided later in the year.
Mr Lamb said that there were five key risks and the Committee was content that these were
being addressed effectively. He said that there had been a progress report on the National
Fraud Initiative and members had noted that the majority of matches recommended for
investigation were related to payroll to creditors.
2
Mr Lamb reported that there had been a discussion of the DEL Health Check and the Head of
Finance had reported that the College would not meet its delivery targets this year and had said
that success would be a more valid statistic than enrolments.
8.2
Minutes of the meeting held on 22nd January 2015
These minutes were adopted on the proposal of Mr Hetherington, seconded by Mr Bodger.
8.3
Minutes (unconfirmed) of the meeting held on 24th March 2015
These minutes were noted.
8.4
Whistleblowing Good Practice Guide – checklist
This item had been taken under 8.1.
8.5
DEL Health Check – issue 1
This was noted.
9.
Committee Report – Finance and General Purposes
9.1
Report from Committee Chair
Mr Jackson continued that the Committee had considered a draft budget for 15/16 but made it
clear that there was still substantial uncertainty, for example, the provisional budget assumed
50% of the FE budget reduction would be met by utilising the End Year Flexibility (EYF). He
said that the College anticipated a £2.7m decrease in income for 15/16 which was comprised of
a £1.7m FLU reduction, £550k adjustment to remove invest-to-save funding, £600k reduction in
Steps income and £300k reduction in European project funding. He said that this reduction in
income, combined with inescapable pressures in expenditure of £1,410m plus the £450k deficit
for 14/15, meant that the College would face a funding gap of £4.5m for 15/16. He continued
that the College had planned actions which would have a cumulative positive impact of
£1,265m. Mr Jackson said that the net impact of the funding reductions and inescapable
pressures, less the College interventions was a deficit of £3,248m. The College planned to deal
with this by a pay-bill reduction exercise, the VES.
The major concern was that there was a strategic problem moving forward. The Chair said that
in 12/13 there was a significant deficit and in three out of the last four years the College had a
technical deficit. Looking ahead, this was a strategic issue as the College would receive less
funding. Mr Jackson added that fixed costs were increasing year on year. The Chair said that
there would be an increasingly substantial gap between income and expenditure. The Principal
said that the funding model was inadequate. He said that not one College had managed to
deliver a balanced budget and deliver its targets and the value of the FLU had not changed since
2006/07 and Training for Success had also reduced from £10k to £8 for the 2-year period. The
Principal said that there were also increased staffing costs which were outside the College’s
control, for example, increased employer pension contributions and the College was faced with
other increases such as rates. The Chair asked for clarification of what was included in fixed
costs and the Head of Finance said PPP payments, insurance, rates, etc. The Principal said that
he had raised this with the Department and said that the inflator should be changed from RPI to
CPI and added that it had not been possible to get benchmarked figures. He continued that
SERC’s estate is highly utilised with Ards being the most highly utilised campus. The Chair
commented that Downpatrick was not highly utilised and asked about Newcastle and
Ballynahinch. The Principal said that the PPP bids for Newcastle and Ballynahinch were primarily
designed when FE was delivering hobby and leisure courses and this was no longer the case.
He added that the Steps to Success contracts were being delivered there.
The Chair said that it was clear that, looking forward, it was unlikely that there would be any
substantial increases in funding. On the expenditure side, he said that the VES would help
reduce costs, but continual reductions in staffing was not an appropriate long term answer. He
3
said we would have to look at estate costs and, particularly the fixed costs element. While VES
would assist with the 2015/16 budget, he said the Governing Body would have to consider the
estate carefully. The Chair said that the Principal had indicated that the fixed costs are closely
related to PPP contracts and he felt that the only option was to raise this issue with the
Department. He said that he was aware that the Principal had raised this issue with the
Department on numerous occasions and, he believed, that it was now time for the Governing
Body to voice its concerns to the Department. The Chair asked if SERC’s fixed costs were a
greater proportion of total costs than other Colleges and the Principal added that the
Department also needed to establish what exactly were fixed costs, to ensure consistency across
the sector. He had been arguing for a number of years that the funding model was not working
and that there was a lack of a strategic plan for investment in the sector’s estate. The Principal
continued that the College’s PPP costs were in the region of £3m, whilst some other Colleges
had no PPP contracts at all.
The Chair asked if members were content that this issue was raised with the Department. Mr
Lamb said he was in total agreement and Mr Graham agreed that central government would be
responsible for resolving the issue.
The Head of Finance commented that the College’s PPP contracts were valued at £8m and the
Department paid £5.6m of that. He added, however, that facilities management in the PPP
contracts was cheaper than in the traditional estate.
The Principal said that the facts needed to be established and added that fixed costs for each
College should be determined in a consistent manner across the sector by the Department. He
said that it could then be established how efficient the College was, what actions could be taken
collectively and appropriate benchmarking evidence should be provided. In terms of the
reduction of income, the Principal said that availing of the sector’s VES was the only option, but
that this would impact on the curriculum offer. He said that this was not a long-term solution
and consideration of the estate must be the focus for the Department. The Chair asked the
Principal to provide a draft of a letter to the Department and the Principal agreed to do this.
9.2
Minutes of the meeting held on 9th February 2015
These minutes were adopted on the proposal of Mr Graham, seconded by Mr Simcock.
9.3
Minutes (unconfirmed) of the meeting held on 23rd March 2015
These minutes were noted.
9.4
Capital Equipment Procurement
Mr Jackson said that there were a number of engineering equipment and vehicle testing
equipment tenders which were in excess of £100k. The Finance and General Purposes
Committee had recommended the ratification of this procurement and he proposed that the
Governing Body ratify the procurement. Mr Graham seconded.
9.4.1 Catering, Vending, Cleaning and Ancillary Services
Mr Jackson said that this tender had not been through the Finance and General Purposes due to
timing but it had been forwarded to the Governing Body to avoid any undue delays and said that
the procurement had been through CPD. The Chair queried that only two potential applicants
had bit for the contract. The Head of Finance observed that the new contract was better value
for money. Mr Jackson said that the recommendation of the panel was that the contract should
be awarded to Mount Charles and he proposed the award of contract and Dr Davison seconded.
10.
Committee Report – Staffing
10.1
Report from Committee Chair
4
Mr Graham said that there had been a general discussion about the General Teaching Council
and concerns expressed about the definition of regulated teaching and the lack of engagement
with the FE sector. He continued that there had been some progress made with regard to the
Salisbury Review and the Healthcare Package for staff had gone live in April; he said that this
would hopefully reduce the level of staff absence. Mr Graham reported that there had been a
lengthy discussion on the staff survey which included trend information. He said that there were
some issues of concern – the “sense of belonging” percentage had drifted down and just over
50% of staff felt valued by the College. He added that a Quality Improvement Plan would be
developed and staff focus groups held to explore issues raised. The Principal commented that
other Colleges did not conduct a staff survey. Mr Graham said that it was useful to have 4-year
trend information and the Staffing Committee would continue to monitor this.
The Chair added that the Governing Body had been involved in a staffing issue and it had been
agreed that it would be important to try to draw conclusions from the process. He asked that
the Staffing Committee pick this up. Mr Graham agreed that this would be re-visited.
10.2
Minutes of the meeting held on 12th January 2015
These minutes were adopted on the proposal of Ms Corbett, seconded by Dr Davison.
10.3
Minutes (unconfirmed) of the meeting held on 16th March 2015
These minutes were noted.
11.
Principal’s Business
11.1
Update on budget for 2015/16
The Principal said that there was no additional information other than that covered under the
Finance and General Purposes Committee report.
11.2
Process for handling new Financial Memorandum
The Head of Finance reported that DFP had how approved the final version of the new Financial
Memorandum which would take effect from 1st August. He said that the Department would be
arranging information sessions for Governors in advance of its implementation. The Head of
Finance continued that there would be significantly differing cash drawdown procedures with the
Department either reducing or increasing cash on a quarterly basis. He added that this change
would assist the College. The Chair asked if this would require more information to be
submitted to DEL and the Head of Finance replied that, as cash had been a pressing issue for
the past few years, the College prepared detailed cashflow projections on a monthly basis.
12.
Colleges NI Business
The Principal said that the new structure of the Board was now in place. Previously all Chairs
and Principals had formed the Board, but it had been agreed that it should be three Chairs and
three Principals. However the membership was currently four Principals and two Chairs. He
said that two non-Executive Directors had been appointed and an Independent Chair, Mr Glyn
Roberts, who had been a member of SERC’s Governing Body. The Principal said that the most
recent meeting had had a presentation on the new super Councils and the previous one had had
a presentation from Invest NI. It was the intention of Invest NI to have better co-ordination
between Councils, Invest NI and the FE Sector. The Principal said that, as the Department was
preparing a new strategy, Colleges NI was considering preparing a manifesto which could be
used as a lobbying document. He concluded by saying that it was possible that an FE
conference would be held.
The Chair said it would be helpful if Governors received copies of the minutes of CNI Board
meetings and the Principal said he would arrange this. Mr Lamb asked about the timing of the
5
FE Strategy and the Principal replied that the Minister hoped to have it released shortly. He
added that the focus was on engagement with industry.
13.
Policies for Approval
13.1
Fees Policy (through F & GP Committee)
Mr Jackson said that there were some minor changes as the HE fess had gone up to £2500 from
£2320 (this was a sector agreement) and the early bird discount had been removed. He
proposed the approval of the policy and Mr Hetherington seconded.
13.2
Annual Review of Finance Policies and Procedures (through F & GP Committee)
Mr Jackson said that the F & GP had considered the annual review of Finance Policies and
Procedures and recommended the removal of the Credit Control and Debt Management Policy.
He said that minor changes were also required to the Financial Regulations Policy and Fixed
Assets and Oversees Travel SOPs. Mrs Larkin proposed these changes and Mr Jackson seconded.
14.
Correspondence
There were no items to be taken.
16.
Any other notified business
There were no items to be taken.
17.
Date and Time of next meeting
The next meeting will be a special meeting held on Tuesday 27 th May at 6 p.m. in the Lisburn
campus.
The Staff and Student Governors then left the meeting at 7.40 p.m. and members remained for
confidential business.
................................................... (Chairman)
........................................... (Date)
6