Value for Money Strategy 2016/17

Transcription

1 Value for Money Strategy 2016/17 Document Control Information Reviewed by the Strategic Management Team Date of Next Review: August 2017 Approved by the Board of Management: August 2016 The Board of Management (or any person/group with delegated authority from the Board) reserves the right to amend this document at any time should the need arise following consultation with employee representatives. -

2 Glasgow Kelvin College Value for Money Strategy Academic Year 2016/17 1 Introduction and Context The College is aware of the necessity for publicly funded bodies to demonstrate that their decision making, and subsequent service provision, represents Best Value and delivers Value for Money. This is a requirement of the Scottish Public Finance Manual. The Value for Money Strategy outlines the College approach to ensuring that it achieves Best Value and that it can demonstrate continuous improvement in the efficiency and effectiveness of its activities. In the overall context of public funding and Scottish Government allocations of finance to the Further Education sector, it is clear that continuous efficiency improvement is essential if the College is to maintain its financial sustainability. Additionally, the College sector is facing significant cost pressures as the implications of Nationally Negotiated Pay Awards and other changes to the tax and National Insurance system add costs above the rate of inflation. Many of the savings that the College is required to make will contribute to offsetting these cost pressures. The Value for Money Strategy outlines how the College plans to achieve this during session 2016/17 and sets its Value for Money targets for this year. The Value for Money Strategy sits alongside the annual College budget and the Procurement Strategy. The achievement of the actions contained within it will inform the operational planning process. 2 Financial Context The Financial Context facing the College is outlined in detail in the annual budget. The main financial issues facing the College are as a consequence of: reduction in funded student activity levels as outlined in the Glasgow Regional Curriculum and Estates Review; reductions in regional allocations of Student Support and Capital Maintenance funding; increases in staff National Insurance costs and the introduction of the Apprenticeship Levy; the costs of nationally negotiated pay awards which are not fully funded and produce no efficiency gains in terms of productivity; and contribution to the costs of Glasgow Colleges Regional Board. It is anticipated that the funding environment will not improve in the coming years and action will require to be taken on an on-going basis to reduce costs and improve efficiency. In total the main cost pressures and lost income facing the College in 2016/17 are: 1

3 Loss of NI rebate for staff in pension schemes 250,000 Recurring cost of unfunded 2015/16 pay inflation 325,000 Loss of Chinese School and Student Engagement 225,000 grants Potential Reduction in Capital Maintenance Grant 383,000 Estimated inflationary impact of increases in minimum 70,000 wage on contract costs Cost of apprenticeship levy from April ,000 Total impact 2016/17 1,278,000 The following sections outline how the College will respond to this financial context in session 2016/17. 3 Curriculum and Estates Review The regional curriculum and estates review has reduced core funding and teaching activity levels by approximately 12% as the College moves into session 2016/17. The College has therefore had to manage down its scale and overheads. Significant progress was achieved in 2015/16 which will generate savings in 2016/17 onwards: sale of City Campus; and operation of a Voluntary Severance Scheme. These two items were critical to the ability of the College to operate on a sustainable basis. City Campus was vacated and sold on 1 August 2016 and therefore this action has been achieved and the savings will be realised as planned. The Voluntary Severance Scheme has generated significant efficiency savings prior to the start of the year however further severance is likely to be required during the year and team structures will require to be reviewed. This continuing objective is included in the value for money priorities for session 2016/17. Teaching staff who taught on courses which transferred to City of Glasgow and Clyde Colleges have been successfully transferred under TUPE arrangements prior to the start of session 2016/17. 4 Value for Money Objectives 4.1 Procurement The on-going implementation of the Procurement Strategy (which will be revised to take account of the most recent Procurement Reform legislation) will assist in the achievement of value for money. Specifically, the College will re-tender the following services and contracts during session 2016/17, these will be undertaken collaboratively with our two sister Glasgow Colleges where possible: 2

4 Waste Management Security Services Alarm Systems Intruder, fire, CCTV etc Air Handling / Conditioning Service Lift Maintenance Estates Maintenance Trades and specialist Occupational Health Total Approximate Annual Value 55k 230k 60k 26k 19k 150k 30k 570k Additionally it is expected that several key MIS/ICT contracts will be re-tendered during the year. (It is the view of the College that it would be best if a number of these contracts were procured by the Scottish Funding Council on behalf of the sector however it believes that is extremely unlikely to be the case.) 4.2 Non-Staff Costs Non Staff Costs have been reduced very substantially over the past two years and the College budget outlines a further cut of 1m for session 2016/17 and how this will be achieved. The main elements are: Revenue saving from sale of City Campus Reduction in learner engagement costs Reduced rental for Gym Hall Cessation of degree courses 60k Reduction in photocopier, stationery 98k & postage - Admin Saving in gas & water tariffs and 100k repairs - Estates Reduction in software licenses - ICT 58k End Glasgow Rocks Sponsorship & 30k other -Marketing Reduction in SQA Fees - MIS 22k Reduction in TQFE/Development - 20k Organisational Development 600k based on handover on 1 August k 35k Assumes Gym Hall will be fully operational in October 2016 Budget holders will continue to review expenditure thoroughly throughout the year and all orders in excess of 2,000 will continue to be authorised by a member of the Strategic Management Team. There are, however, additional cost pressures in some areas as a consequence of inflation and the impact the increase in the National Minimum Wage is having upon several key contracts. Additional savings will be generated during the year as part of the on-going review of expenditure. Estates expenditure, Administrative costs and ICT maintenance contracts and licenses will be priority areas for detailed consideration. 3

5 4.3 Staff Utilisation The efficient utilisation of staff is fundamental to the efficiency of the College. A step improvement was achieved in this area during session 2015/16, it is essential this is maintained, particularly in the context of the restructure of the teaching faculties. Teaching staff utilisation will be managed carefully within faculties with regular timetable audits performed by members of the Strategic Management Team and the Director of Curriculum. Staff contact time will be managed at contracted weekly levels except where remission has been granted for specific purposes. Temporary staff will only be employed within course teams where necessary to cover teaching commitments. Class sizes will also be carefully monitored as part of the staff utilisation audit process and throughout the student recruitment cycle. 4.4 Restructuring The re-structuring of several teams will take place during session 2016/17. This will focus on teams where changes are required as a result of voluntary severance exercises or the need to review structures to take account of the reduction in scale of the College or changing service requirements as a consequence of Scottish Government or Scottish Funding Council policy. Specifically the following areas will be reviewed during the year: Learner services and Student Funds; and Finance. It is intended that the College will work with City of Glasgow College to create a centralised approach to the administration of Student Support Funds during session 2016/17 with a view to implementation in advance of the 2017/18 year. The objectives of the restructuring exercise will be to create an affordable staffing and management structure which will enable the College to deliver its operational and strategic objectives and maintain its financial viability. Several teams including ICT, Estates and Administration were restructured during session 2015/16. The College has secured financial support for severance costs related to this exercise from the Scottish Funding Council. 4.5 Estates The rationalisation of the College Estate has been achieved. The Estate is now appropriate for the volume of learning and teaching in the College. Priorities now include continuing with the work to rationalise contracts and reduce the number of suppliers. Additionally the College will: continue to review the utilisation of staff in the estates team; calculate baseline KPIs as detailed in the Estates Strategy; develop long term maintenance and replacement plans; 4

6 review the Climate Change Action Plan and seek to reduce the carbon footprint of the College; and make modifications to other campus building to accommodate activity and staff relocation. 4.6 Programme Design, Learner Retention and Attainment Improvement in learner retention and attainment rates is an important aspect of the value for money in respect of the use of College resources. The College will continue to build on the strong progress it has made in implementing its quality improvement action plan, developed in response to the Education Scotland Review during session 2015/16 and 2016/17. The College will review its course design processes and minimum class sizes to ensure teaching activity is efficient and complies with the new credits based funding model. 4.7 Financial Capability The management of budgets will continue to be improved throughout the College by: development of the service provided by the finance team in respect of management accounts; further improvements in the engagement between finance staff and budget holders; and further finance system development work to provide more information to assist with financial planning and monitoring. 4.8 Income Generation & Commercialisation During session 2016/17 the College will seek to review fully the way in which it operates in response to significant work carried out by the Gazelle group in respect of commercialisation. It is anticipated that the College will seek to review the way in which it operates throughout its structure and may consider radical change in this area of activity to consider how it might develop: its role in economic development; its engagement and management employer relationships; the way in which it makes use of its assets for income generation and wider benefits; how social enterprise models might operate and support learning and teaching while developing the employability skills of learners; how work-based learning can be developed to upskill employees; how international activity and experience can benefit learners and the College; and how a culture change can enable the development and growth of nongovernment income streams. The Business Development team will seek to diversify income sources. Targets will be outlined in the team plan. The College will also seek new sources of funding to support Climate Change objectives and the further expansion of the learning network. It will also seek to develop further the Foundation Apprenticeship model and will continue to lead on 5

7 this in partnership with the other Glasgow Colleges. Working in partnership the College will seek to maximise use of European Union resources to support: the learner experience; and the professional learning of staff. It is also recognised that capital grant funding available to the College is likely to be insufficient to enable appropriate replacement of assets including ICT equipment and infrastructure. The College will seek to identify other sources of grant funding to supplement capital funding allocations from the Scottish Funding Council. 4.9 Absence Management The College will continue to implement its absence management procedures rigorously to seek to reduce absence levels. These will be reported routinely to managers and to the Human Resources Committee of the Board of Management. 6