SHEFFIELD HALLAM UNIVERSITY

Transcription

1 SHEFFIELD HALLAM UNIVERSITY FEC/4/16/M FINANCE AND EMPLOYMENT COMMITTEE Minutes of the meeting held on Tuesday 21 June 2016 Present: In Attendance: Mr N MacDonald (Chair) Mr D Bradley Mr S Britland Mr G Dawson Ms J Dean Prof C Husbands Ms J Delaforce, Managing Director of BP&E (observer) Mr R Dewar, Deputy Director of Finance Mr P Dixon, Director of Human Resources Mr P Severs, Director of Finance Mr M Swales, Director of Estates and Facilities (items 10, ) Mr J Williams, Consultant, BP&E (observer) Ms T Goodwill, Governance Services (Minute Secretary) Apologies for absence received from Ms M Munn, Dr S Timothy and Ms E Winders Paper reference FEC/3/16/M Minute reference FEC/16/ FEC/16/ FEC/16/ FEC/16/ FEC/16/ Chair's Opening Remarks The Chair welcomed the following to the meeting: i) Judy Delaforce and John Williams, the consultants who were conducting the 2016 review of Board effectiveness; Robert Dewar, Deputy Director of Finance. Declaration of Interests There were no declarations of interest. Minutes of the meeting held on 4 May 2016 The minutes were approved as a correct record. Matters Arising: Minute 16/37.4 Employee Opinion Survey 2017 The Committee would receive a report in due course on the University's approach to the 2017 survey in the light of the refresh of the University Strategy and People Plan. Action: Director of Human Resources Matters Arising: Minute 16/38.1i Two day national strike by the Universities and Colleges Union (UCU) in May 2016 It was reported that the: i) national strike by UCU on 25 and 26 May 2016 which was in response to the final pay offer from the Universities and Colleges Employers Association (UCEA) created very Page 1 of 10

2 little disruption to the University's delivery of its services and activities to students; University had informed academic staff that they would not be paid for the days on which strike action was taken and declarations of participation in strike action made by academic staff were being collated; i UCU had previously signalled its intention to deem that a trade dispute existed with the University before the first round of national pay negotiations had taken place. The procedural dispute continued; iv) outcomes of consultation on the UCEA final pay offer by each of the other higher education trades unions with their members at the University (UNISON, Unite and GMB) were expected in July A progress report would be made to governors in due course. Action: Director of Human Resources FEC/16/ Matters Arising: Minute 16/42.2 Governors' training needs In connection with the forthcoming treasury management and finance related decisions which the Committee would need to take governors were asked to advise the Clerk to the Board of any training needs in the context of the: i) work to refresh the University Strategy; review of the University's financial plan including consideration of the level and type of borrowing; i implementation of Financial Reporting Standard 102 including the new Statement of Recommended Practice for Higher Education (2015) which was approved by the Board at its meeting in April Action: Director of Finance and Clerk to the Board FEC/4/16/6 FEC/16/ FEC/16/53 Other Urgent Business There was no other urgent business. Financial Plan, Budget 2016/17, HEFCE Financial Forecasts 53.1 The Committee received the report which contained the revenue budget 2016/17, financial projections for 2017/18 and 2018/19, the capital equipment budget for 2016/17, the existing estates plan including long term maintenance and faculty and directorate emerging issues. The HEFCE financial forecasts and commentary were for submission to the Funding Council by 29 July 2016 following approval by the Board of Governors at its meeting in July The Deputy Director of Finance introduced the report and outlined the: i) context for the budget. A refresh of the University Strategy was ongoing and it would inform the review of the University Financial Plan (UFP). The Committee would Page 2 of 10

3 receive a report on the progress of the UFP review at its meeting in September In response to comments from governors it was reported that the covenants in the borrowing facility with Barclays Bank had been reviewed in the context of the budget and UFP. A schedule which reported the University's compliance with the covenants would be added to the budget report for circulation to members of the Board of Governors for the 26 July 2016 Board meeting. A review of the borrowing facility would take place within the timescale of the UFP review; Action: Director of Finance aim of the budget, which combined with the outcomes of the refresh of the University Strategy and the review of the UFP would enable the University to undertake its planning on a long term financially sustainable base in the context of the external economic environment; i construction of the budget which had been generated from an integrated business and financial planning process; iv) assumptions underpinning the budget including those in connection with an apprenticeship levy on employers to be introduced in April 2017; v) annual charges to the income and expenditure account arising from Financial Reporting Standard 102 (FRS102) and the Statement of Recommended Practice for Higher Education (SORP 2015) which were fully adopted in the forecasts. The final FRS102 numbers which related to the non-discretionary pension elements would not be available until September 2016; vi) management of risks including those arising from the recruitment of full-time undergraduate students, fee income, demographic change and increased competition in student markets for 18 year olds. The outcomes of the University's confirmation and clearing over summer 2016 provided an opportunity to assess risks to the budget from student recruitment. Faculty and directorate plans would be reviewed and with the 2016/17 enrolment numbers sufficiently well established at period 3 a reliable statement about the budget delivery could then be made and any in-year mitigating action taken The Committee commented on: i) the commitment to deliver savings in the cost base and/or increase income to achieve at least a breakeven position in 2016 and The surplus had been generated following work across all business areas to identify and prioritise additional initiatives across income, pay and non-pay activities. Achieving a surplus following adoption of FRS 102 and SORP 2015 alongside cash generation, provided confirmation of the strength of the University's financial performance; inflation and the assumptions relating to it were explained; i the incremental increase in tuition fees across four years from 2015/16 to 2018/19 (appendix 1). The reasons for the increase were explained in the context of the number Page 3 of 10

4 of students at the University, changing demographics and the competitive market for full-time undergraduate students; iv) the University's nursing provision, the shortage of and competition for nursing students and the funding policy change from bursaries to loans. It was reported that one of the key strands of the review of the UFP was the sustainability of each income stream; v) capital expenditure (appendix 2). It was reported that the capital plan was consistent with previous reports to the Committee. In response to questions from governors the 2016/17 net expenditure figure for capital equipment expenditure was clarified. The Committee would receive a report later in the meeting about estate capital projects in the capital plan which was being reviewed as part of the UFP review; vi) the financial forecast commentary (appendix 5) to be submitted to HEFCE and in response to questions from governors: a) the loss in 2014/15 in respect of pension schemes was explained; b) the increase in depreciation between 2015/16 and 2016/17 was clarified; c) it was reported that the University's financial indicators were benchmarked The Committee received the investment schedule at 20 June 2016 which was tabled The Committee resolved to recommend to the Board of Governors the: i) approval of the revenue Budget for 2016/17 (appendix 1) and to note the financial projections for 2017/18 and 2018/19 arising and Budget commentary (appendix 3); approval of the capital equipment budget for 2016/17 as detailed in appendix 2; i confirmation of the existing estates plan including long term estates maintenance and faculty and directorate emerging issues (appendix 2), noting that individual projects were subject to separate authorisation as set out in the Financial Regulations; and iv) approval of the submission of the HEFCE forecast (appendix 4) and HEFCE forecast commentary (appendix 5). FEC/4/16/7 FEC/16/ Students' Union Financial Monitoring Period 9 The Committee received the report on how the Students' Union was performing against budget in its core operations at period 9 including the exceptional costs and levels of cash. The Director of Finance explained the changes to costs and cash levels in period 10 (May 2016). Page 4 of 10

5 FEC/4/16/8 FEC/16/ Students' Union Grant At its meeting in May 2016 the Committee discussed the proposed Students' Union grant for 2016/17 (minute FEC/16/44 refers) and requested clarity about the Union's priorities and how the initiatives and its spending of the grant aligned with the objectives in the Union's five year strategy to At its meeting in May 2016 the Board of Governors discussed a report on the University's partnership with the Students' Union including the constitutional, governance and operational relationship between the two. Since then the grant proposal had been discussed again with the Students' Union. The Director of Finance summarised the matters discussed including the challenges for the Union which had informed the approach to the re-presented grant (paragraphs 11 and 12) and a proposal that the University funds specified additional activities (appendix) for one year only Governors commented on: i) the support for the Students' Union arising from the responsibilities of the: a) Pro Vice-Chancellor for Student Experience which was a new University Leadership Team role created by the Vice-Chancellor as part of the refresh of the University Strategy; b) new Chief Executive Officer (CEO) of the Students' Union. Arrangements were in place to recruit and appoint a CEO whose responsibilities would include the management of the permanent staff of the Union. The CEO was accountable to the Students' Union Trustee Board; c) Liaison Committee with representatives from both the University and the Students' Union which would meet for the first time in June 2016; d) 'Link Governor' who would work closely with the Students' Union generally and the sabbatical officers in particular; e) Finance and Employment Committee as specified in its terms of reference. the re-presented grant and risks to the delivery of the Union's objectives in the context of its five year strategy. Owing to the relative short term nature of the sabbatical officers' periods of office the governance arrangements must underpin and maintain the Union's sustainability including financial sustainability At the end of the discussion the Committee reiterated that the effectiveness of the Union's 2016/17 spend in the context of its strategic objectives should be assessed as part of recommending a grant for 2017/18 to the Committee. It was reported that initial work with the Students' Union to validate the grant per student by comparing this with other universities would inform the 2017/18 grant recommendation to the Committee. Action: Director of Finance Page 5 of 10

6 55.4 The Committee resolved to recommend the approval of the 2016/17 Students' Union grant as detailed in paragraph 12 to the Board of Governors. FEC/4/16/9 FEC/4/16/10 FEC/16/ FEC/16/ Orders/Contracts above Approval Threshold Level The Committee noted that: i) there had been no submissions for which Chair's approval has been sought since the last meeting on 4 May 2016; there had been no orders/contracts approved by the Director of Finance since the meeting on 4 May 2016; i the anticipated submission at the next meeting of the Committee on 21 September 2016 would be for outsourced security services. Proposal to dispose of property on the Collegiate Campus The Director of Estates and Facilities introduced the report which described the property on the Collegiate Campus, the reasons for its disposal and estimates of the costs associated with the disposal. The reasons why a more accurate estimate of the costs of the enabling works was yet to be determined were outlined. In response to comments from governors the University's approach to the disposal was explained. Arrangements for communications about the disposal were being progressed with the Directorate of Corporate Affairs The Committee resolved to recommend to the Board of Governors the disposal of the properties as described in paragraphs 21 and 22 of the report. FEC/4/16/11 FEC/4/16/12 FEC/16/ FEC/16/ Owen and Norfolk Chillers: Request for Chair's Action The Committee resolved to ratify Chair's action taken to approve the release of the Norfolk and Owen Chillers funding in the current estates capital plan at the value reported in paragraph 5 of the report. Estate Developments The Committee received the progress report which included a summary of estates major projects showing overall risk status (appendix 1). The Director of Estate and Facilities reported: i) that work was ongoing by the contractor in the new Charles Street building to close out remaining snags and remedy a defect in the atrium's glazing. The University's approach to the negotiation of a settlement of the final account with the contractor was outlined; on the related works to relocate the data centre from Hallamshire Business Park (HBP) to the basement of the Charles Street building. Contractual matters were being progressed with the contractor owing to the delay in the project's timescales and the contractor's remediation work to make the basement waterproof. The date of migration Page 6 of 10

7 of the data centre from HBP would be determined once the remediation work was complete. The University's approach to the contractor's remediation work was outlined; i on the increase in the project costs for the building purchased for the national centre of excellence for food engineering, the core specification requirements of the Customer Sponsor and the project's risks. Governors commented on the: a) award of funding to the University by ERDF (European Regional Development Fund) which had been deferred and was now expected in July 2016; b) viability of delivering the project within budget with the ERDF funding and without the funding; c) Building Research Establishment Environmental Assessment Methodology (BREEAM) rating specified for the building and the rating that had been reported to the ERDF as achievable. The Board of Governors would receive a report on the project at its meeting in July Action: Director of Estates and Facilities iv) that the Science, Technology, Engineering and Mathematics (STEM) project, was on budget and programme timescales; v) that the first phase (blocks A and B) of the space for the Sheffield Institute of Arts (SIA) in the former Head Post Office building was complete. Remediation works to replace defective areas of floor screed on levels 2 and 3 of block A would be implemented over summer 2016 by the developer. A second phase of works (blocks D, E and F) was due to be completed in July The governors' visit to SIA in June 2016 had been well received. Governors commented on: a) the enthusiasm of staff they had met and the impressive spaces created for and in use by the SIA; b) their experiences in the area surrounding the former Head Post Office, the need to improve it and the opportunities to do that. The University's ongoing work with Sheffield City Council, including public realm works, South Yorkshire Police and other City centre stakeholders was outlined; vi) on the programme for the construction of the proposed building for the Advanced Wellbeing Research Centre (AWRC) which would be part of the Olympic Legacy Park on the site of the former Don Valley stadium. The AWRC building would be funded in part by a grant to the University from the Department for Health (DoH) and a response from DoH was expected shortly. The planning and stage 3 design of the proposed building was advancing well but the University would not issue tenders until a response from DoH about the grant was received. Negotiations with Sheffield City Council for the University to acquire the freehold of the AWRC site were ongoing; v on the disposal of Ackley Bank at auction in May The disposal had been approved by the Board of Page 7 of 10

8 FEC/4/16/13 FEC/16/ Governors in February 2008; vi on the additional details in the summary of estates major projects showing overall risk status (appendix). It was suggested that future estate development reports to the Committee and the Board of Governors include the estate schedule from the University Performance Report. Action: Director of Estates and Facilities and Director of Finance Annual review of the Committee s effectiveness The Committee received the report and reviewed: i) its terms of reference (appendix 1). At its meeting in February 2016 the Board of Governors approved the addition of paragraph 6 to the Committee's terms of reference (appendix 1) to clarify the responsibilities of the Committee arising from the Students' Union Code of Practice; the summary of business covered by the Committee (appendix 2); i its application of element 6 of the Committee of University Chairs (CUC) Higher Education Code of Governance (appendix 3) The Committee commented on its effectiveness as follows: i) the Committee's discussions included time for reflection and a constructive and open exchange of views which were welcomed by members; the clarity with which the Committee's business was communicated to the Board of Governors to enable understanding of the business by all members of the Board. The Chair made an oral summary report to the Board on the business covered at a meeting of the Committee and key points for the Board were highlighted, the summary report was supported by the unconfirmed minutes of each Committee meeting and written reports which, having been debated and reflected on by the Committee, may be refined where appropriate prior to issue to the Board; i members of the University's Leadership Team who attended the Committee's meetings commented that: a) given the Committee's central role in the University's governance and decision making processes its challenge of proposals presented by the University Leadership Team was appropriate; b) the Committee's observations were fair and it was supportive. In its discussion of Financial Reporting Standard 102 the Committee had not only considered the technical aspects of the accounting standard it had also suggested that the standard should be implemented in ways which would drive behaviours which supported the University s long-term sustainability; c) the suite of plans which would underpin the delivery of the refreshed University Strategy including the Page 8 of 10

9 people, finance and estate plans were being mapped onto the academic plans and drivers. In response to comments from governors it was reported that virtual learning was one of the elements of the academic plan which would be considered by the Board of Governors at its strategy event in October Action: Vice-Chancellor and University Leadership Team iv) the University's financial plan including the level and type of borrowing in the context of the refreshed University Strategy would be key areas for discussion by the Committee in 2016/17. The Chair invited members of the Finance Directorate's leadership team to be in attendance at meetings with the Director to present and debate items where appropriate; Action: Director of Finance v) the volume of items on the agenda allowed time for focus on strategic matters; vi) the volume of finance and estate matters on the Committee's agendas compared with employment matters. It was reported that the University's People Plan would be a key area for discussion by the Committee in 2016/17. The Committee would receive a report on pensions developments and policy at its meeting in September 2016; Action: Director of Human Resources v the Committee's forward programme of business was reviewed and updated regularly to ensure that the Committee could monitor the strategic development of the University on behalf of the Board of Governors in the areas of employment, finance and estate; Action: Clerk to the Board, Director of Human Resources, Director of Finance and Director of Estates and Facilities 60.3 Equality Act 2010 and element 6 of the Committee of University Chairs (CUC) Higher Education Code of Governance (appendix 3) The University had a duty under the Equality Act 2010 to consider equality and demonstrate how it had been considered and how it impacts on decision making. Element 6 of the Committee of University Chairs (CUC) Higher Education Code of Governance (appendix 3) included specific mention of governing bodies roles in promoting equality and diversity throughout higher education institutions and, to demonstrate a governing body's application of element 6 'requiring its committees to explain within their annual reports how decisions have taken account of the institution's equality and diversity policy' The Committee noted that some but not all reports to the Committee in 2015/16 included reference to equality and diversity matters. In response to comments from governors it was reported that the University was developing a framework for equality analysis which would enable the guidance Page 9 of 10

10 (paragraph 7 to be implemented fully by authors in future reports to the Committee and the Board of Governors. Equality analysis would inform the content of reports and enable the Committee to understand and explain in its future annual reports how its decisions take account of University policy. Action: Clerk to the Board of Governors, Director of Human Resources, Director of Finance and Director of Estates and Facilities Governors commented on the: i) gender balance of Board membership; work by the Nominations Committee to have a Board membership which reflected a diversity of characteristics including a balance in terms of gender; i need to improve the gender balance on the Committee and asked that the matter be brought to the attention of the Nominations Committee. Action: Chair of the Nominations Committee who had left the meeting prior to the annual review of effectiveness item and Chair of the Finance and Employment Committee The Committee s 2015/16 annual report would be made to the October 2016 Board of Governors meeting. Action: Clerk to the Board of Governors FEC/4/16/14 FEC/16/ FEC/16/ Schedule of Meetings and Forward Planning Programme The Committee received the forward planning programme and noted that the next meeting would be held from 1500 until 1730 on Wednesday 21 September Retirements from the Committee and the Board of Governors on 31 July 2016 On behalf of the Committee the Chair thanked each of the following for their contribution to the work of the Committee since 1 August 2010: i) Janet Dean; Stuart Britland. Page 10 of 10