The Advisory Board
Chief Executive’s Office, Kilwinning
Tuesday 10November 2016 at 10:00
Present:Richard Dennis (RD) / The Accountant in Bankruptcy and
Agency Chief Executive (Chair)
Bryan Jackson(BJ) / Non-executive Board Member
Yvonne MacDermid(YM)
Laurie Manson (LM) / Non-executive Board Member
Non-executive Board Member
In attendance:
Rebecca Crook (RC) / Head of Finance
Lisa Shaw (LS)
Kelly Quigley (KQ) / Head of Governance
Head of DAS & PTD (Agenda item 7 only)
Amanda Dowse(AD) / Secretary
Welcome, introduction, apologies, acceptance of previous minutes and matters arising from previous minutes
1.The Chair welcomed everyone to the meeting. Apologies were noted from John Cook and Kate Dunlop.
The previous action (1) on complaints where AiB show bias is being progressed by Policy and will be recorded in a formal report next reporting year.
2.The previous minutes were agreed.
Declaration of any Conflict of Interest
3.There were no additional conflicts of interest from the previous quarter and these conflicts remain manageable.
Chief Executive Update
4.RD advised that volumes were increasing across all products, although not dramatically and the increase is well within our capacity. The first quarter of 2015-16 had seen BADAS and BASYS going live, resulting in much lower volumes that quarter as the sector adjusted – this would lead to some potentially misleading comparisons as this year returned to trend. There were signs that it had become easier for consumers to access credit in a timeframe that would lead us to expect a steady rise in the numbers..
5.RD advised that AiB have still not been advised what their budget will be set at for 2017/18. SG are unable to commit to figures until the autumn statement is issued on November 23rd.
6.RD did not envisage any immediate impact from Brexit in personal insolvency numbers – such impact as was likely would largely be a reflection of any resultant change in the trajectory of interest rates.
7.RD reported that the IAIR conference would be held in London in 2017. There were 2 projects being taken forward by IAIR at the moment; Director disqualification and principles of regulation of Insolvency Practitioners. RD noted that China had been represented as observers at the last conference and had since indicated that they would want to become involved with IAIR as they develop their own insolvency processes.
Q4 Agency Quarterly Report and Performance Dashboard TAB(16-17)27a,15b
8.BJ asked about two partially upheld complaints. LS advised that these reflected complaints over staff attitudes to correspondents rather than substantive issues. Reviews had found that the situations could have been handled better by staff and steps are in place to review the agency wide standards of service to ensure consistency across all areas. It was noted that the new telephony system may generate more complaints as callers would now not have a direct line to staff, however the new system would offer some protection to staff.
9.The Board discussed BROs and RD advised that there had been a recent BRO made for 10 years. YM asked if someone could ensure she is set up to receive notifications as she had been missed out of some of the press notices.
10.RD advised that all the SG websites were moving to a gov.scot domain and this would require a radical change for AIB. He noted that AiB had already been considering the need for a separate DAS website as the statistics showed this was rarely used. He would keep the Board updated on progress.
11.LM enquired about the RAG status markings within the report and LS advised that this represented progress within the year and not a point in time. RC advised that although the forecasting objective (24) was showing a red status, initial discussion had taken place and work was being done in the background. Similarly, work had not yet commenced for BADAS review. The diligence review has gone out for consultation and it was noted that surprisingly there had been no public controversy sparked over issues surrounding the family home.
Corporate Risk Register TAB(16-17)28
12.LS introduced the register noting there were two main changes to risk from the previous quarter. There was an increase in risk 2 partly due to a change in the SG promotion policy. The requirement to hold generic promotions Boards has now been removed and interviews will be post specific now. It is unlikely to affect less specialist or administrative posts but could impact on specialist posts within AIB. AIB is a strong investor in its staff, however this can sometimes lead to staff moving on as we actively encourage progression. Consequently, there is a flight risk however staff are heavily engaged and therefore this risk can be managed effectively. The development of a skills matrix will signal where transferrable skills lie across the agency. Posts requiring to be filled can be advertised externally at the same time as going out to core SG providing there is a strong business case to support this.
13.LS advised that measures were being taken to mitigate against the impact of term time working. Approval had been given to participate in a young worker development programme and posts would be advertised across local high schools to fill the gap during summer holidays. This would offer paid work experience at the entry level salary, and this is currently higher than the living wage.
14.Risk 10 also showed an increase from the previous quarter. Submissions for the new insolvency contract had been received, however there had been inconsistencies with the data leading to a decision to put a new contract notice out this month. All relevant parties have been notified. It is likely that the current contract will be extended but this should not cause any issues. LS explained that the shared service support from SG Procurement had not been provided at the level anticipated and this has now impacted on the delivery of other contracts. On-going support should not be a problem as resource issues have been addressed. The Chartered Surveyor contract should be in place by the end of November and it is likely that the IT contract will be extended with no significant impact on business.
Financial Monitoring Report TAB(16-17)29
15.RC informed the net surplus at the end of the quarter 2 had been £14k. Fluctuations in bankruptcy recoveries continued and this has had an impact on income being less than budget for the year to date.A change to fee regulations has resulted in a reduction in audit fees for the current year but this will even out over the next three years. All other budget lines are positive with the exception of a negative variance within FHS and Sponsorship of £41k.
16.It was noted that overall the agency was forecasting to be overspent by £135k on resource budget. This includes the cost of making good damage to a third party property. SG have confirmed they will cover this payment should the agency require it.
17.RC advised that an accrual adjustment had been made in respect of work carried out by IP’s but not yet paid but that this had a minimum impact on the overall financial position.
18.Aged debt continued at a similar level to the previous quarter. It was noted that a provision to enable AIB to charge interest for late payment has been added to the draft fees order.
19.RC advised that a managed forecast overspend of £400k on capital was as a result of a delay in the air conditioning being delivered. It was noted that only priority expenditure was being progressed this year andSG are aware of these pressures on budget. YM asked whether the overspends could be viewed negatively from a PR perspective. RD stated that as there are £1.6m in consigned funds available to SG this year they have provided comfort that the budget could be adjusted at the Spring budget revision and therefore the final reported position would be within budget.
Equity Rich PTD’s TAB(16-17)30
20.KQ joined the meeting to discuss the paper. BJ stated it was a fair summary of the current position. It was recognised that Trust Deeds were not subject to the same regulations as for bankruptcies. However the current practice by trustees appears to go against the principles of CONC and treating customers fairly. RD stated that in principle, these are voluntary arrangements and there does not seem to be any legal grounds for challenging proposals. Creditors do not seem to be objecting to the protection of equity rich trust deeds and there seems little AIB can do without regulatory change. A Dear Trustee letter had been issued highlighting the concerns. It was noted that 80% of PTD’s were managed by only 4 firms. Some discussion then ensued about possibilities of raising minimum debt levels, increasing DAS publicity or abandoning Trust Deeds as an option for debt relief. The Non executives felt that this was an area where action needed to be taken, even if it was hard to see what an effective response might look like. In extremis, consideration might even be given to abolishing protected trust deeds in their entirety.
HR Review TAB(16-17)31
21.Lisa Shaw apologised for the delay in providing the detailed HR report as she was awaiting information from core SG. LS informed a final report would be forwarded to members by correspondence once available. Brief discussion was held over preliminary headline figures.
22. The % split between long and short term absence had moved to 50/50 due to staff returning from long term absence. Sickness levels were above SG but had remained static from last quarter. Stress has moved back in to the top three sick leave descriptors. It was acknowledged that as AIB were required to follow SG procedures and policies for managing sickness absence there was little action that managers could take to reduce this.
23.There was a significant intake of staff during the B1 manager recruitment exercise last year and this is now showing as a reduction in turnover. The head count is down mainly due to a reduction in temp staff Flexi and annual leave figures have reduced as expected at this point in the year.
Customer Survey Initial Feedback
24.Responses from the money advice sector have exceeded target however there has been lower responses from other stakeholder groups. LS will report back to the group once more responses have been submitted.
Office Hours Discussion
25.RD advised he had met with Union representatives to discuss ways to achieve flexible employer status. It was recognised it can be difficult to accommodate shorter working hours for staff as this could lead to pressure to cover the hours open to the public. A decision had been made by SMT to cut the hours AIB was open to the public over the festive period as this would have little impact on the business but would benefit staff. RD told the Board that depending on the results of the survey, he was also minded to reduce office hours on Fridays, feeling that this would not impact significantly on service delivery. This would not constitute a change to terms and conditions for staff. LM thought these proposals would make efficient use of resources by re-directing to peak demand times.
AOB, Thanks and Actions
26.RD reminded the Board that they also have the opportunity to speak with our Fraser Figure, Mary McAllan or the Minister, Paul Wheelhouse if they think this is appropriate.
27.RD advised that there had been some work rationalising office space across the SG. From a business continuity perspective this may make it difficult for staff to find office space in the event that AIB building is unavailable. As AIB’s operations are not critical then this could be managed overall and the business continuity plan would reflect this.
28.Papers listed for discussion by exception were the Health and Safety report and the Information Risk report. No discussion was raised on these.
The date of the next meeting is 14th February 2017
Amanda Dowse
Secretary
15 November 2016
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