CANTERBURY CHRIST CHURCH UNIVERSITY
MINUTES OF THE MEETING OF THE FINANCE AND GENERAL PURPOSES COMMITTEE HELD AT 3.30PM ON TUESDAY 1 MARCH 2016
IN THE GARDEN ROOM AT THE PRIORY
Present:Mr Frank Martin (Chair), Mr Christopher Calcutt, Dr Gill Perkins,
Mr Krum Tashev (SU President), Ms Deborah Upton, Vice-Chancellor
In Attendance:Mr Paul Bogle (Clerk to the Governing Body)
Mr Stephen Clark (Pro-Chancellor)
Bec Dodd (Mercer)
Mr Cedric Frederick (for item 1 on the agenda)
Mike Harrison (Mercer)
Sir Ian Johnston (for item 1 on the agenda)
Mr David Leah (Director of Finance)
Mrs Heather McCulloch (Committee Officer)
Dr Keith McLay (for item 7 on the agenda)
Mrs Karen Pilgrim (Assistant Director of Finance (Accounting & Regulatory Systems))
Mr Lee Soden (Director of Estates and Facilities Management)
Miss Jenny Wallbank (Observer)
127.Presentation on the University’s Pension Arrangements
Members of the Committee were joined by some members of the HR Committee to receive a presentation on the University’s pension arrangements delivered by the consultancy firm, Mercer. The Director of Finance advised the Committee that the aim of the University was to develop a pensions strategy, and input from Governors following the presentation would be welcomed.
The presentation covered the following areas:
- Overview of the University’s Pension Schemes
- Consideration of Costs and Risks of Participation in the Schemes
- Potential Actions to Mitigate Risks
- Possible Employee Relations Considerations
- High Earners’ Pension Tax Implications
- Developing a Strategy
The Vice-Chancellor acknowledged the current deficit position of the LGPS Scheme but noted the cyclical nature of such arrangements and the potential to move to a surplus position in the future. Mercer accepted that there were a number of variables in the equation including greater life expectancy and potential cures for serious diseases which could happen at any time. They would advise the University to consider its LGPS arrangements even if the scheme was currently in a surplus position due to the risk of employer contributions rising; currently CCCU LGPS contributions were 17.5% but those at some other universities were at levels of 25-30%. Also the defined benefit arrangements were costly.
Mercer pointed out that universities were in the peculiar position of having public sector benefits but with private sector risks. There were also inequities between academic staff and professional services staff arising from the different funding models underpinning their respective schemes. In answer to a question regarding the responses of other universities, Mercer informed the Committee that a number of these were moving towards defined contribution arrangements. The utilities sector was an example outside HE that was moving in this direction.
The Vice-Chancellor concluded that the presentation was designed to give an overview, and the University will take its time to consider its current arrangements and whether any changes were needed in the future. A range of options will be brought before the Committee in due course to be considered for recommendation to the Governing Body. Those policy aspects relating to potential salary supplement would be considered by the Remuneration Committee. He advised that this will be a substantive piece of work which will be approached with an open mind and accorded an appropriate timescale.
NOTED
128.Apologies for Absence
There were none.
129.Declarations of Interest
The Vice-Chancellor declared an interest as a member of the USS Pension Scheme.
130.Chair’s Communications
The Chair expressed his gratitude to all staff involved in the work behind the agenda items on the new Art building and the positive financial position of the University.
131.Minutes of the Meeting of the Finance and General Purposes Committee held on 3 November 2015
The minutes of the meeting of the Finance and General Purposes Committee held on 3 November 2015 were agreed and signed as an accurate record subject to the following amendment.
- Minute 60 Students’ Union 2014/15 Financial Statements and Budget 2015/16, third paragraph change the comma mid-sentence to a full stop to read ‘The aim moving forward was to reduce the size of the subsidy that the Unionreceived from the University. A benchmarking exercise will provide useful information around the level of subsidies for students’ unions in due course.’
132.Matters Arising not appearing elsewhere on the Agenda
132.1Salomons – Relocation Option [Minute 63 refers]
The Director of Estates and Facilities updated members of the Committee with regard to the relocation of Salomons. The Vale House option referred to in the previous minutes was no longer available. A new option was now being considered at 1 Meadow Road in the centre of Tunbridge Wells, which had good parking and transport facilities onsite and close by. A feasibility report had been commissioned. It was noted that the 1980s building required some investment. The University was considering both a leased option of fifteen years with a five year break clause, and an option to purchase the building. The University was in negotiations with the owners of Salomons, and work was ongoing exploring the option of 1 Meadow Road ‘at risk’. A full business case will be brought to the Committee in due course with a view to relocating towards the end of the current year.
The Vice-Chancellor commented that if the University were to lease the building at 1 Meadow Road it would be important to secure a break clause option in view of potential synergies with the proposed Neuro Village in Tunbridge Wells.
NOTED
133.New Art Building – Blue Car Park: Business Case Proposal [Paper H111]
Members of the Committee received Paper H111, New Art Building – Blue Car Park: Business Case Proposal, which was introduced by the Dean of Arts and Humanities. He stated that the proposal was part of the University’s strategy for student number growth; by relocating and merging programmes at Broadstairs with those at Canterbury, it was planned to restore declining student numbers in art and music programmes to their 2011 levels. A number of programmes would be refreshed and new programmes introduced. The expiry of the lease on the Augustine Arts Centre in 2017 had provided an opportunity to reconsider the Fine Art programme in particular, and it had been decided that it was no longer a viable option due to the high cost of suitable space and materials.
A new building was needed to house both the School of Media Art & Design and the School of Music & Performing Arts, not least because there were plans to introduce new joint programmes across these areas. The location of the blue car park, near other arts and humanities provision, was a ‘good fit’ with the ‘clustering’ of faculty provision recommended in the Master Plan.
The Chair welcomed the detailed business case provided in the paper and the clear payback on the initial investment within a short time span of three years. The Director of Finance highlighted the strong financial case for moving forward with the proposal, citing affordability at a cost of £11.1m without increasing the University’s borrowing requirement. There was sufficient capacity at the Canterbury campus to proceed, and a strong argument in favour of ‘kick-starting’ the Master Plan in this way and thus avoiding compromising the timing of the later stages of the Plan.
In terms of next steps the Director of Estates and Facilities confirmed that work would continue ‘at risk’, and the likely challenges would be around both archaeological considerations and planning. There would also be the impact of car parking issues with the loss of the parking facility.
A member of the Committee enquired whether the location of the new facility would enhance the St Gregory’s building and church yard. He was assured that the new architect would include this in the design proposal, which would need to be creative in order to negotiate the challenge of building so close to the road.
The SU President enquired about the teaching experience of the Level 4 Fine Art cohort of students, which would be the final recruitment group of students to the programme. He was informed that their final year would be taught at another location in Canterbury.
The Committee was mindful of the sensitivity around relocating programmes from Broadstairs whilst at the same time wishing to celebrate a good news story; it was agreed that the item remain confidential to the meeting. The Vice-Chancellor advised that new programmes for introduction at the Broadstairs campus were being considered. A more strategic approach was needed with consideration of links to Discovery Park and Further Education Partners. A paper on this will be brought to the June meeting of the Governing Body.
RESOLVED TO RECOMMEND:
that Paper H111 be approved.
134.Mid-Year Review and 6 Month Budget Update [Paper H112]
Members of the Committee received Paper H112, Mid-Year Review and 6 Month Budget Update. The Director of Finance advised that the overall movement on the budget showed an improved bottom line position of £176k. There had though been some material changes to income expectations on particular lines. This reflected the uncertainties of now operating within a more marketised environment for the HE sector. The particular importance of student recruitment and retention in meeting overall income targets was noted.
In terms of costs these had been well managed, notwithstanding some pressures around staff costs. The maintenance costs had increased due to the need to invest in maintaining the older buildings in order not to compromise the student experience. The balance sheet indicated a positive financial position with cash holdings at £22.4m, and higher levels of liquidity.
A member of the Committee queried an overspend on rent and rates, and an underspend on publicity and advertising in the context of trying to recruit sufficient student numbers. The executive explained that the acquisition of additional student accommodation to meet the needs of students recruited through Clearing accounted for the overspend on rent and rates. Publicity and advertising fell under the headings of both staff and non-staff costs and after a rebalancing exercise there would be no overall underspend in this area.
A member of the Committee queried the terminology that represented an underspend on staff costs as ‘better than budget’. The Director of Finance qualified the description as meaning financially better than budget, and he was unaware of any adverse operational impacts around operating the vacancy factor. The Chair recommended the use of the terminology ‘below budget’ as a more accurate description than ‘better than budget’.
RESOLVED TO RECOMMEND:
that the revised budget be adopted by the Governing Body.
135.Emerging Issues for 2016/17 Budget [Oral Report]
The Director of Finance reported that the positive financial forecast for 2015/16 provided a firm basis for the development of the 2017/17 budget and forecasts for the following two years. At its away day recently SMT had considered a range of possible scenarios moving forward. Student number targets had been agreed which were broadly in line with the strategic framework aspirations and associated KPIs. It was though crucial for the University to deliver these planned numbers, and activity was being focused on the conversion of applications into registrations.
There were a number of key priorities emerging including the need for IT investment, redefinition of the academic architecture and the delivery of process improvements identified within the Christ Church Process Improvement Programme (CCPIP). There was a challenge to ensure there was the business capacity for implementation and delivery would be around business capacity and delivery within a constrained budget. The business planning process had ensured a better and more coordinated approach between academic and professional service areas ensuring a greater alignment of the respective priorities. The ending of the rebate on employer national insurance contributions currently allowed within the University’s pension schemes will result in a cost pressure of around £1.5m per annum for the 2016/17 year.
The Director of Finance reported that the business planning process would be completed in May and the outcomes presented to the next meeting of the Committee.
NOTED
136.Master Planning Update [Paper H113]
Members of the Committee received Paper H113, Master Planning Update. The Director of Estates and Facilities reflected on a challenging period around securing planning permission for the development of the North Holmes campus, which was now scheduled for the summer of 2016. He was heartened by the Council’s appointment of DHA Planning Consultants to support them through the planning process. The decision that a full Environmental Impact Assessment (EIA) was required in relation to the development proposals had though pushed back the planning timetable by a few months.
In terms of the historic prison quarter, the Council seemed favourably disposed towards the possible demolition of C-wing, and to the remodelling of the inside of B-wing. The innovative design work of BDP continued to be ongoing alongside the planning process. Although there had been some slippage of time, a huge effort will be made between now and the summer to complete the schedule of technical tasks, surveys and studies required for the planning application. Securing planning permission was the central focus at this time.
The Chair acknowledged that the delay was disappointing, but considered that the more robust process now required would inject a little more certainty around securing the necessary planning permission. He regarded the work with BDP moving forward as the province of the executive.
In response to a question from a member of the Committee, the Director of Estates and Facilities assured members that the University had a good working relationship with Historic England and was consulting with them at each stage. The Committee also noted the importance of a healthy working relationship with the Canterbury Archaeological Trust.
The SU President recommended involving the other sabbatical officers in the Master Planning process. He expressed a concern about the lack of a student space which will not be forthcoming until the later stages of the Plan. The Director of Estates and Facilities acknowledged the point; much will depend on the success of Building 2, the development of the Prison Backland, and its potential to generate sufficient revenue in order to proceed with Building 3, the Student Hub.
NOTED
137.Students’ Union Termly Report [Paper H114]
Members of the Committee received Paper H114, Students’ Union Termly Report. The SU President reported a positive financial position with higher than expected income, though with higher than expected non-pay expenditure. There had been a one-off cost of £20k around adopting a new constitution, which had been incurred through postal communication with all students rather than by email. The requirement to communicate through the post had been a feature of the old constitution, but the revised constitution had removed this requirement.
The SU President also highlighted the success of the bar, café and catering facilities in the Students’ Union building which had achieved a stronger financial position compared to previous years as well as to budget.
The Director of Estates and Facilities explained that the £0.25m subsidy that the Union received from the University was partly to cover core facilities management costs, and partly to cover the commercial activities. He noted that the issue of poor behaviour on the part of a minority of students had receded and, as a result, more students were using the SU commercial facilities. Additionally, the SU space had been rented out in the summer and at Christmas bringing in valuable revenue.
The Director of Estates and Facilities stated that there will be a reduction in the SU subsidy next year, and the SU needed to be explicit about the impact that this would have. The concern of the SU was recorded, and the Chair requested detailed information regarding the effect on the Union’s finances.
NOTED
138.IT Strategy and Policy Group[Paper H115]
- Approved Minutes of the Meeting held on Friday 6 November 2015
- Unconfirmed Minutes of the Meeting held on Thursday 4 February 2016
- Summary Financial Report
Members of the Committee received Paper H115, the minutes and report of the IT Strategy and Policy Group. The Director of Finance reminded the Committee that the IT Strategy and Policy Group was served by four sub-groups covering Learning and Teaching, IT Architecture, Corporate Systems and Marketing/Communications. It was a more sophisticated model of governance designed to assist the prioritisation and planning process.
A member of the Committee highlighted the need for an agile work force with regard to the provision of mobile devices, and also enquired about the ageing student record system interface.
In response, the Director of Finance referred to the core entitlement for staff which, currently, provided for either a fixed PC or a mobile device per member of staff. In terms of the student record system, the University’s software supplier had advised that an update to the interface was possible and this work was being taken forward as a priority.
NOTED
139.Medco (CCCU) Ltd – Minutes of the Board of Directors Meeting held on Thursday 29 October 2015 [Paper H116]
Members of the Committee received Paper H116, Medco (CCCU) Ltd – Minutes of the Board of Directors Meeting held on Thursday 29 October 2015, for information.
NOTED
140.Any Other Business
The Chair noted that it was the final meeting of the Finance and General Purposes Committee that would be attended by the Director of Estates and Facilities before his retirement later this month. He thanked him for his significant contribution to the work of the Universityover a number of years, and particularly around the Master Planning agenda more recently and wished him well for his retirement.
NOTED
141.Date of Next Meeting
The next meeting will be held on Tuesday 31 May 2016 at 4.00pm.
NOTED
The meeting closed at 5.45pm.