HIGHLAND NHS BOARD
Assynt House
Beechwood Park
Inverness IV2 3BW
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www.nhshighland.scot.nhs.uk
MINUTE of MEETING of the
ENDOWMENT FUNDS COMMITTEE
Board Room, Assynt House, Inverness
30 September 2013 – 11.00 am
Present
Mr Ray Stewart, Employee Director (In the Chair)
Mr Robin Creelman, Non-Executive Director (from 12.45pm)
Mrs Myra Duncan, Non-Executive Director (from 11.10am)
Mr Mike Evans, Non-Executive Director
Mrs Gillian McCreath, Non-Executive Director
Mr Okain McLennan, Non-Executive Director
In Attendance
Mr Iain Addison, Head of Area Accounting
Mrs Kelly Dallas, Endowment Support Officer
Ms Brenda Dunthorne, Head of Finance, Raigmore Hospital (from
11.45am)
Mr Mark Ivory, Adam & Co, Investment Brokers
Mr Brian Mitchell, Board Committee Administrator
Ms Donna Smith, Service Performance & Partnership Manager (from
11.45am)
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WELCOME, APOLOGIES AND DECLARATION OF INTERESTS
Apologies for absence were received from Dr Iain Kennedy, Mr Nick Kenton, Dr Rhona
MacDonald, Mr Adam Palmer, Ms Sarah Wedgwood, Mrs Elaine Wilkinson and Mrs Lyn
Wormald.
Members were asked to consider whether they had an interest to declare in relation to any
Item on the Agenda for this meeting. The following interests were declared:


Ray Stewart – Member of Unite, Staffside Chair and employee of NHS Highland.
All Members – NHS Board Non-Executive Director.
The Committee Noted the declarations of interest.
2
MINUTE OF MEETING HELD ON 1 JULY 2013
The Committee Approved the Minute of the Meeting held on 1 July 2013.
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MATTERS ARISING
3.1
Kyle Court Upgrade, Raigmore Hospital
The Chair advised he had visited the refurbished facilities at Kyle Court and urged other
Committee members to do the same. The upgraded facilities were much improved over that
previously available and had generated positive feedback from patients.
The Committee so Noted.
3.2
Murdo Graham Bequest
At their meeting held on 1 July 2013 the Committee had agreed that legal advice be sought
on potentially changing the existing Restriction in relation to this donation. Mr Addison
confirmed relevant legal advice had been sought and a response was awaited. Should the
conditions of the original donation be upheld then the assistance of the original Solicitor
involved would also be sought.
The Committee so Noted.
3.4
Donation from Novartis Pharmaceuticals UK Ltd
Mrs M Duncan advised that Mr R Creelman had expressed concern in relation to this
donation and the associated potential effect on purchasing behaviour by staff. Mr Addison
advised that Standing Financial Procedures applied to all purchases and as such this was
appropriately controlled.
The Committee so Noted.
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PRESENTATION BY ADAM & CO, INVESTMENT BROKERS
Mr M Ivory advised as to the current economic and market position and outlook, this having
endured a volatile period following a strong start to the year. UK Government Bond yields
had risen over the period to end August 2013 although investment preference at that time
remained in relation to overseas government debt and corporate bonds. Whilst European
economies were showing signs of growth, elections in Germany could lead to investor
uncertainty. It was advised that corporate confidence within Europe was improving and the
circulated report further outlined current dividend yield and yields across relevant asset
classes. With regard to the NHS Highland portfolio and discretionary investment mandate,
this indicated a medium balanced return from income and capital growth over a ten year
period, with a 0.4% fee per annum applying. Mr Ivory advised the current portfolio comprised
approximately 70% Equities and 30% cash/Fixed interest investment and indicated
performance to 31 August 2013, detailing those elements that made significant contributions
to overall performance, and providing detail as to transactions undertaken. The current asset
allocation was outlined, and it was advised that cash holdings would remain at a low level.
There followed short discussion, during which it was acknowledged that overall the current
market position remained volatile. Mr Ivory advised this position was likely to be maintained.
Mr I Addison stated there was a need for discussion as to how best to utilise resource
income from the ARCHIE campaign, in investment terms, and Mr Ivory indicated he would be
willing to further discuss this point.
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On the point raised, Mr I Addison advised the current arrangements for investment services
were for an initial period of three years, with an option for a further year plus one more.
The Committee:


Noted the position relating to management of the NHSH Endowment Fund Portfolio.
Thanked Mr Ivory for attending and addressing the meeting.
Mr M Ivory left the meeting at 11.45 am
5
APPLICATIONS
5.1
Raigmore Hospital – Outpatient Coffee Bar, Reception and Facilities Upgrade
At their meeting held on 1 July 2013 the Committee had agreed to consider this application
subject to provision of greater detail of projected income levels, provision of income and
costs data for the main entrance café prior and post development, and a separation of the
Exchequer and Non-Exchequer elements. The Committee took the opportunity to hold an
initial discussion of the application submitted, and agreed a series of points requiring
clarification to enable this to be fully considered.
Ms Smith and Ms Dunthorne joined the meeting at this point.
There had been circulated an application seeking agreement for investment funding in the
sum of £185,000 for the redesign of the Outpatient Coffee Bar, Reception and Facilities at
Raigmore Hospital. It was noted the overall project cost was £478,000 and that the
proposed contribution from Raigmore Specific Endowment Funds was in the sum of £15,000.
The nature of Raigmore Specific Funds made it difficult to identify appropriate level of
contributions and as such it had been proposed this contribution be made from the General
Fund for Raigmore Hospital. The Committee also noted the communication with the Blood
Transfusion Service regarding a contribution toward provision of a Blood Letting room within
the overall proposal, provision of income trend detail relating to Front Entrance Coffee bar
project, and the proposed repayment phasing of any Endowment Fund contribution. On the
latter point it was proposed that repayment of the investment be over a five year period
based on 11% of income from the Coffee bar. The proposal had been presented to the
Asset Management Group at their meeting held on 11 September 2013 where support for the
project, in principle was given, for consideration as part of the 2014/2015 Capital Plan
process, with agreement that the Endowment Funds Committee further consider the request
for an investment contribution.
During discussion, Ms Smith advised that the opening times for the Coffee bar were to be
extended from 9.00am – 3.30pm to 8.00am - 6.00pm (Monday to Friday), with any proposals
for additional opening hours to be tested prior to full introduction. Financial projections for
the new facility were not entirely based on the increased income levels generated by the
refurbished Zone 5 facility. Increased costs were likely to relate to pay (30%), non-pay (20%)
and the repayment of any Endowment Funds contribution as indicated. It was emphasised
that there were cost implications even if the project did not proceed given the current need
for improvement work in this area and existing environmental health requirements. With
regard to implications for the Ophthalmic clinic area, the proposals involved creation of a
large Main Reception area, meaning the existing Ophthalmic reception desk could be
removed to increase available space in that area. This would improve the patient
experience. Moving forward, it was anticipated that upgrade work would be carried out in
2014/2015. The project phasing plan sought to minimise the associated impact of the work
and would involve a degree of weekend working.
Ms Smith and Ms Dunthorne stepped out of the meeting at this point.
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The Committee took the opportunity to discuss, in private, aspects relating to the request for
a contribution from Endowment Funds.
Ms Smith and Ms Dunthorne rejoined the meeting again at this point.
After discussion, the Committee:



Agreed to make a contribution up to the value of £185,000 towards the overall project.
Agreed the Raigmore Senior Management Team again consider the level of contribution
from Restricted Funds.
Noted the Raigmore Senior Management Team was to consider a voluntary donation of
£43,475 per annum to the Endowment Funds for five years.
Ms Smith and Ms Dunthorne left the meeting at 12.40pm
6
INVESTMENT FUNDS
6.1
Funds Report – Portfolio Valuation
There had been circulated a report indicating that as at 30 June 2013 the NHS Highland
Endowment Funds portfolio market value stood at approximately £7,507,824.88.
The Committee Noted the position in relation to Investment Funds.
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FINANCIAL REPORTS
7.1
Financial Position to 31 August 2013
There had been circulated Financial Report outlining that the balance of the Unrestricted
Funds as at 31 August 2013 was £5,253,217.10 and that for 2013/2014 Budget Funds, some
£151,497.83 remained unspent.
The Committee otherwise Noted the financial position.
7.2
Inactive Funds Position Statement as at 31 August 2013
There had been circulated update report detailing those Specific Funds where little, or no,
activity had been evidenced in the previous two year period and outlining responses to
requests for indication of associated spend proposals. There was also an indication of those
Funds closed since June 2013.
The Committee Noted the circulated report.
7.3
Exception Report to 31 August 2013
There had been circulated report detailing expenditure from Endowment Funds in excess of
£5,000 to 31 August 2013.
The Committee Noted the report.
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7.4
Donations Received Over £5,000 to 31 August 2013
There had been circulated report detailing donations over £5,000 received to 31 August
2013.
Members suggested there be included, in the next NHS Highland Newsletter, a general
statement of appreciation relating to the receipt of donations to Endowment Funds along with
examples of the benefits accrued from such donations.
The Committee otherwise Noted the report.
8
ANY OTHER COMPETENT BUSINESS
8.1
Valedictory
The Committee took the opportunity to thank Mr Stewart, who was chairing his last meeting
of the Committee as Employee Director and Non-Executive Member of the NHS Board, for
his commitment and valuable contribution over the years of his tenure. The Committee
wished Mr Stewart well in his future endeavours.
8.2
ARCHIE Campaign
Mr Addison advised that Mr D Cunningham had indicated the level of donations received to
date had reached £1.16m. Mr Cunningham had offered to attend and present an update to
the next meeting of the Committee. Members welcomed the offer although the view was
expressed this should perhaps be to a future NHS Board Development session.
9
DATE OF NEXT MEETING
The next scheduled meeting of the Committee will be held on 6 January 2014 at 11.00am in
the Board Room, Assynt House.
The meeting closed at 12.50 pm
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