APPROVED

NHS Grampian (NHSG)

Minute of Endowment Committee Meeting

Friday 5 March 2010, 1000-1300

Conference Room, Summerfield House

Present

Mr Raymond Bisset (Chair), Non-Executive Board Member

Cllr Lee Bell, Non-Executive Board Member

Mr Mike Scott, Non-Executive Board Member

Mr Gordon Stephen, Employee Director

In Attendance

Dr David Cameron, Chairman, NHSG

Dr Roelf Dijkhuizen, Medical Director, NHSG

Mr Barry Jenkins, Assistant Director of Finance

Mr Derek Angus, Treasury Accountant

Ms Carol Clark/Mr Mike Connor, Newton Investment Management Ltd - Items4.2/4.3

Mr John Millar, Communications Manager, NHSG - Item 11

Miss Anne-Marie Meconi, Minuting Secretary

Item / Subject / Action
1. / Apologies
Apologies were received from:
Prof Neva Haites, Non-Executive Board Member
Mr Alan Gall, Finance Director, NHSG
2. / Minute of Meeting held on 14 December 09
The Minutes of the above meeting were approved.
3. / Matters Arising
Mr Bisset raised the question of the possibility of appointing one of the two new non-Execs due to be appointed in June to the Committee due to the departure of Mr Ewan Robertsonbecause of management restructuring.
Dr Cameron said that this seemed a sensible suggestion.
Dr Dijkhuizen brought up the subject of GHAT and said that the cut in monies was particularly harsh as they could no longer afford money for fundraising and the likelihood is that GHAT would disappear. He asked if it would be possible for fund-holders to contribute proportionately to continue their funding.
Dr Cameron said that GHAT had been told a year ago that their money would be reduced and that they should start thinking about fundraising but they had done nothing so far. They needed to change their way of operating. If GHAT disappeared the Committee would be blamed for this. They would be receiving £50K from the Committee more than what other areas were receiving.
Dr Dijkhuizen proposed that the complainers should be asked to approach sub-committees to ask for funding. It would be down to the endowment fund holder to release monies.
Cllr Bell said that the Committee could defend themselves and had given GHAT plenty of notice of their reduction in funding due to the financial climate.
It was up to GHAT to seek funding from the specific endowment fund holders.
The Committee agreed to help GHAT approach fund holderswhere the terms of the fund would allow them to make a contribution to GHAT. / BJ/DA
3.1 / Review of action sheet
Mr Bisset went through the action sheet and it was duly updated
Items to come back to the next meeting were:
23.6.08 - Item 4 - Evaluation and Workshop including work plan and constitution
15.12.08 - Item 12 - Position of Board members as endowment trustees
The Committee noted the Action Sheet. / BJ/DA
4. / Investments
4.1 / Review of Investment Portfolio at 31 December 2009
Mr Bisset said that that Newtons projection of investment income was £1.341m. This was achieving the expected income of £1.3m.
Mr Jenkins said that we had seen improvement in the portfolio and would know more once we had Newtons update for the end of February 2010.
4.2/4.3 / Investment Portfolio at 31 December 2009 and Update from Newtons
Carol Clark and Mike Connor join the meeting.
Newtons gave a presentation of their report and the overall financial climate and how the markets had been performing.
Mr Connor went through their report. Markets had rebounded in the last few months with the final quarter being strong and it was a good performance for the whole year.
Equity markets were continuing to do well but bond markets were not so good. Newtons were continuing to avoid investing in companies with high levels of debt.
Ms Clark gave a summary on how Newtons were managing the investments to generate the present target minimum income of £1.3m per year.
Mr Angus said that any investment losses were met from the Endowment Committee Fund. The present loss is£22Kbut MsClark said that this small loss would be cleared by the year end.
Mr Jenkins asked if the benchmark was still relevant and was it correctly weighted. Ms Clark said that since the benchmark had been changed in June Newtons were happy with the benchmark and were not feeling restricted by it.
Mr Bisset thanked Newtons for their update.
Carol Clark and Mike Connor left the meeting.
5. / Update on Future of 403 King Street, Aberdeen
Mr Bisset said that the sale of this property was being marketed by Shepherd Commercial, 35 Queens Road, Aberdeen.
The Committee agreed that the process should proceed.
6. / GAPF Endowment Funding
Mr Stephen said that there were still some individual applications being looked at although the preference was for bids that would benefit groups of staff.
The Committee noted the report.
7. / Donations Received for December and January 2010
Mr Bisset said that the total donations received for the period was £438,682. He went through some of the amounts received.
The Committee noted the report.
8. / Overview of Current Financial Position
8.1 / NHSG Endowment Fund at 31January 2010
Mr Bisset said that the Committee should note that the General Endowment Fund still had a forecasted deficit but that it had been reduced due to approved action.
The Committee noted the report.
8.2 / Endowment Committee Fund at 31January 2010
Mr Angus said that there had been a movement in the expected balance of the Endowment Committee Fund. £109K was money no longer required within commitments. This unspent commitment arose from the monies previously awarded to General Managers and GAPF projects.
£163K was the expected year end balance of the Fund. The Committee agreed the use of available monies for GAPF £25K from this balance for 2010/11.
The Committee agreed the report.
8.3 / General Endowments at 31January 2010
Mr Angus went through the report. The current position is an under spend of £48k with an estimated under spend of £19k for the year.
The amount issued for retirement awards were much higher than what was budgeted for due to the higher number of staff who were retiring. It was possible that the present overspend would increase with the claims to be paid in February and March.Dr Cameron said that we should be aware of the overspend on this budget. Mr Angus said that the reason was that most of the information was on NHSG service but when it comes to retirement then people are given the amount for their length of NHS service. There was some factoring in of funds for these issues on an estimated basis.
Mr Scott asked why there was an underspend re the building and equipment of £15K. Mr Angus said that where some hospitals have surplus general funds, then it goes into equipment.
Mr Jenkins said that over and under spends were being monitored.
Dr Cameron commented that on the grants awarded, GHAT had received the biggest grant.
The Committee noted the report.
8.4 / Rolling cash-flow forecast
Mr Bisset went over the figures on the estimated cash flow.
The Committee noted the report.
9 / Funding Requests
9.1 / Expenditure requests approved from 1 December 09 to 31 January 10
Mr Angus said that the approved expenditure of £792K was nearly twice the amount of donations received for the period and action was being taken to spend the money.
The Committee noted the report.
9.2 / Oncology request for EBUS equipment
Mr Bisset said there was good justification for this equipment and it was noted how the annual maintenance would be met.
Friends of ANCHOR were donating £40K as part of the funding and the Endowment Fund was providing the balance of £20K.
The Committee approved this request.
10 / Draft General Endowment Budget 2010/11
Mr Bisset said that there was a necessity to maximise the income and reduce the expenditure.
The proposal to top slice the investment income and bank interest of £100K per quarter commencing on 1 January 2010 to the Headquarters General Endowment Fund before apportionment over all funds was approved. This was to ensure that there would be a much reduced deficit on general endowment funds. In addition to this it was necessary to reduce expenditure levels.
Mr Angus went through the amended items of the budget and discussed the long service awards for 35 years and the Committee agreed that the award be reduced to the same level as the 25 year award ie£140. GAPF require to be informed of the reduced funding available.
Mr Angus said the research budget would be reduced to £10K and Alison Macleod to be informed.
The Committee noted the amendments to the budget as agreed at the December 2009 meeting. These were on the items of expenditure for research, the Staff Physiotherapy Service, the Grampian Hospital Arts Trust, the treatment of the Investment Advisers fees and the budgeted shortfall on the RACH general endowment fund.
The Committee agreed the report. / DA
DA
11 / Positive Publicity for NHSG Endowments
Mr John Millar, Communications Manager joined the meeting.
Mr Bisset explained that we needed some channel to raise staff awareness to what the Committee does, and the funding and the process of distributing it. The Committee would also like some way of thanking the people of the Northeast as a whole for their generosity in donations/legacies. They do receive a letter of acknowledgement but the Committee felt that a general thank you was needed.
Mr Millar said that he would think of ways of getting this generic thank you across and maybe show some examples ie equipment that had been bought by large donation being used ie EBUS. There would be no time deadline for this to take place.
Mr Stephen said that a short presentation at a Board Seminar would let every non-Exec, who is a trustee of the Committee, be aware of what to say if they are ever challenged re Endowment Committee.
Mr Millar to provide to the next Committee meeting with some ideas.
Dr Cameron to meet with Miss Lesley Hall to get this on the agenda for a Board Seminar.
Mr John Millar left the meeting.
12 / Review of Work Plan
Mr Bisset said that the Work Plan done by Mr Jenkins outlines the action and who is responsible. Mr Jenkins said that this enables the Committee to see what has to done at the quarterly meetings and makes the Committee more responsible for what it does. More focus was on the individuals or departments that we are helping and if there was anyone else who should be asked along to a meeting.
It would be helpful to have feedback from individuals that had received funding for a number of years and this would enable the Committee to see how the money was being used.
The Committee noted the report.
13 / Review of Risk Control Plan
Mr Bisset said that there were two risk items that had stayed the same for a while, Trojan and adverse publicity.
Mr Jenkins said that meetings were continuing to identify alternatives to Trojan.
Adverse publicity would be discussed with Mr Millar on best way forward to get favourable publicity and how to deal with the GHAT issue.
There were no other additional risks.
The Committee noted the report.
14 / AOCB
Cameron Executry
Mr Angus said that the Cameron Executry supported cancer and heart research. DrDijkuizen said that £612K had been allocated by the Committee to train researchers in cancer disease. A programme had been done on how this would work. The money had been approved in principle but it was going to operate differently from the first proposal brought to the Committee but that this would be acceptable.
Mr Angus to meet with Simon Shemilt for presentation onany additional aspects to the next Committee meeting.
Mr Bisset said that as this was Mr Jenkins' last meeting, Mr Bisset would like to thank him for his help with this Committee and to wish him all the best for the future.
14.1 / Report to Board
Mr Bisset asked what the Committee should be reporting on to the Board.
Dr Cameron said that for the investments that it be reported that the market value was now greater than the book value.
Mr Angus said that we had informed all the fundholders that they could not spend more than 80% of their fund balance. Dr Cameron said that this was a positive control that had been put in place and it would be prudent to keep the present restriction. Having this in place had not caused any problems. Mr Angus said that we could leave it as it stands for the moment due to the financial situation.
Make the Board members aware of the general endowment budget.
GHAT - It was decided that as the letter to the Board was an open letter the Board should be fully informed in private of the history of what the Committee had been doing and the way ahead for GHAT.
Mr Bisset thought it would be helpful to have a preface to explain what the Committee does and what it can and cannot control.
Dr Dijkhuizen said that no one knows where the money goes and we needed an "idiot" guide to the Endowments Committee.
Report to the Board to consist of:
- value of investments
- continuing limit of spend on funds
- general endowment budget for 2010/11
17 / Date of Next Meeting
Tuesday 8 June 2010, 1000-1300, Conference Room, Summerfield House

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