MINUTES of the First Meeting of the 2004/2005 Academic Year
the
COURT
FINANCE COMMITTEE
MINUTES of the first meeting of the 2004/2005 academic year
held on Monday, 4 October 2004, in Room 084, Queen Anne Court, Maritime Greenwich Campus, Old Royal Naval College, Park Row, Greenwich, SE10 9LS
commencing at 5.30 pm.
Present:Mr J R H Loudon (in the Chair)
Mr S Atkinson
Baroness T Blackstone (Vice-Chancellor)
Mr J C Gould
Dr D Quarmby
In attendance:Mrs S Adams (Director of Estates)
Mrs T A Brighton (Minutes Secretary)
Mrs L Cording (University Secretary)
Prof M Cross (PVC, Research, Consultancy & Outreach)
Mr R V T Daly (Director of Finance)
Prof J Humphreys (PVC, Academic Planning)
Mrs A-M Nelson
Prof D Wills (PVC, Resources)
Apologies:Mr S Etherington
04/1WELCOME
The Chairman welcomed Simon Atkinson, Tessa Blackstone and John Gould to the first meeting of the newly-constituted Finance Committee.
04/2DECLARATION OF CONFLICT OF INTERESTS
There were no declarations of conflict of interests.
04/3MINUTES OF THE PREVIOUS MEETING (F 04/1)
04/3.1The minutes of the Finance and Estates Committee meeting held on 14 June 2004 were signed as a true record.
04/3.2The Chairman reported that he wished to put on record that, as part of its deliberations on the Provisional Budget 2004-2005 and Five-Year Forecast (cf minute 03/48), the Committee had considered in detail a number of factors including the long-term objective to build up its reserves to 10% of total income, and the likely longer term benefits from revenue-generating activities and to-up fees.
04/3.3In relation to minute 03/51 on Reporting Financial Performance, the Chairman:
ireminded the Director of Finance of the request to ensure that Tony Martin was kept informed of the outcome of the Committee’s decision on this matter
iirecalled, for the avoidance of doubt, the Committee’s previous decision that all Members of Court would in future receive the quarterly Management Accounts. The format of this information would be left to the discretion of the Director of Finance.
MATTERS ARISING
04/4(i)STUDENTS’ UNION BUDGET
04/4.1The University Secretary recalled that, at the previous meeting, the Students’ Union had submitted a budget based on a higher than agreed subvention. In subsequent correspondence with the Students’ Union, officers had declined to comply with the request of the Committee that the Students’ Union produce a balanced budget for 2004-2005 based on a subvention of £700,000, but had instead proposed a deficit budget of £22K whilst volunteering to make economies up to £10,000. Whilst acknowledging that the Students’ Union provided an invaluable service to the students, Committee Members insisted that the Union, like every other area of the University, would need to maintain a balanced budget and should be reminded of the financial constraints under which everyone within the University was operating.
Noting that the Vice-Chancellor would be meeting shortly with the Students’ Union officers, the Committee requested that the Students’ Union be instructed to present a balanced budget for 2004-2005 based on a subvention of £700,000 for approval to the next meeting of the Committee.
04/5AGENDA ITEMS 2004-2005 (F 04/2)
04/5.1The Committee agreed the list of agenda items for the 2004-2005 session, subject to the inclusion of a new regular item (schedule of major works and capital projects) at each meeting.
04/5.2Noting that the Committee would be reviewing the annual performance of the London Pension Funds Authority (LPFA) at its next meeting, the Committee agreed that a group of representatives (to include James Loudon, Anne-Marie Nelson, David Quarmby and Reginald Daly) should meet LPFA officers in January 2005 to discuss the overall performance of the Fund.
04/6FINANCIAL CONTINGENCY ACTIONS (F 04/3)
04/6.1The Committee considered a report on proposed financial contingency actions to be taken in the event that the agreed budget for 2004-2005 would not be met. The Director of Finance reported that the financial audit was currently taking place and it seemed increasingly likely that the forecast surplus of £500,000 for the 2003-2004 year would be exceeded. The final audited accounts would be presented to the next meeting. Overall, the pleasing results were a general reflection of stringent budget management by Schools and Offices.
04/6.2The Chairman stated that although the forecast outturn for 2004-2005 would indicate a profit as a result of the sale of the Woolwich site, he believed that the Committee should continue to monitor closely the budget in the event of any unforeseen expenditure. It was therefore agreed that, bearing in mind the time constraints involved, Management Accounts for August and September, together with best estimates for October, would be tabled at the next meeting.
04/6.3The Committee agreed to recommend to Court that:
iin the event of a financial shortfall in the 2004-05 financial year, the following contingency actions should be undertaken (in order of priority):
- postponement of appointments to vacant posts
- re-scheduling of discretionary non-salary costs
- re-scheduling of property maintenance projects to August 2005 or later
iithe Finance Committee would review the University’s overall financial performance to determine whether to invoke any of the contingency actions listed above at its January 2005 meeting.
04/7SHORT TERM INVESTMENTS (F 04/5)
04/7.1The Committee considered a report by the Director of Finance outlining the University’s short-term investment arrangements, which appended a copy of the current Credit List and Credit Limits used by fund managers.
04/7.2In discussion the following points were noted:
ithe arrangements for investing funds had remained unaltered since Royal London Cash Management Limited had had first been employed as investment managers in March 1999
iithe fund managers had recently registered difficulty in investing the University’s funds within the agreed credit limits of £3m per UK bank and £2m for non-UK banks and had requested an increase in limits
iiiall banks on the Credit List were required to have a minimum long term rating of AA- from Standards and Poors
ivthe Credit List only contained UK and non-UK banks with no reference to any of the other existing vehicles for investment.
04/7.4Bearing in mind that the University had larger resources to invest than when the policies were first introduced, the Committee resolved to request that the Director of Finance meet with Royal London Cash Management Limited and report back to the next meeting with recommendations relating to:
- options for widening the investment portfolio
- increased levels of credit limits.
04/8NRI STRATEGIC REVIEW
The Vice-Chancellor reported that recent visits to NRI together with presentations from NRI staff had given her a flavour of NRI’s wide-ranging and worthwhile work. In the meantime, she wished to propose that, until a clearer view emerged from DfID on its agricultural research strategy, an interim strategy would be pursued. The Committee discussed how to proceed in the event that the decision from DfID on its agricultural research strategy failed to emerge on the expected timescale. In these circumstances, the Vice-Chancellor confirmed that a decision would not be delayed, and officers would formulate a strategy for the way forward.
04/9TREASURY MANAGEMENT POLICY (F 04/6)
Following detailed consideration, the Committee resolved to recommend to Court for approval the draft Treasury Management Policy subject to the following amplifications:
- inclusion of the policy relating to interest rate swops
- reference to the use of hedging in relation to the effect of foreign currency fluctuations on overseas contracts.
04/10UNIVERSITY ESTATES ISSUES
04/10.1AVERY HILL PROJECT (F 04/7(i))
10.1.1The Committee considered a report outlining proposed building developments at Avery Hill to accommodate staff relocating from Riverside House East when the lease expires in September 2005.
10.1.2The Chairman recalled that a number of options had been considered in detail at the previous meeting and that the new build option at Avery Hill had been selected as representing the most cost-effective way forward. He expressed considerable concern that approval was now being sought for double the original estimated costs.
10.1.3The Director of Estates explained that since submission of the original proposals, the University had received notice from North West Kent College that it would need to quit the premises leased for the print room by July 2005. The proposals now incorporated provision for a replacement print room at an additional estimated cost of £0.5 million, as well as more generous space allocations in the new building.
10.1.4 Following considerable discussion, the Committee concluded that, in order to satisfy itself of the financial merit of the revised proposals, it would be necessary to re-examine the original options for the relocation of the Woolwich staff. The alternative of out-sourcing the print room should also be reviewed. It was noted that planning application for this project and the new Sports/Health building, would need to be submitted by November 2004 to ensure that the projects were delivered on time and that HEFCE funding allocated for the sports/health building project would be used by April 2006. The Committee agreed that officers produce a reworking of the original paper for circulation via correspondence to Members for approval. If the proposals were thought to be contentious, they would be discussed at the November meeting.
04/10.2MEDWAY CAMPUS (F 04/7(ii)
The Committee received a consolidated report on estates development at the Medway Campus.
iUniversities at Medway Project
The Committee received an updated project cashflow forecast and Phase 1 + 2 project strategic programme. It was noted that both the Join Venture Agreement with the University of Kent and the Funding Agreement with SEEDA had now been finalized and signed. Refurbishment work on the Joint Learning Resource Centre had now started and design work for both the Canteen and Circulation Buildings was in hand. The Committee noted that approval for the budget provision for these works would need to be sought at a later meeting.
iiReversionary Lease at Medway
The Committee noted the progress made in recent discussions with DfID. The University had previously signalled interest in acquiring the reversionary sub-lease from DfID in 2014 for one hundred years and, at the advice of its solicitors, would be commissioning an independent valuation of the site prior to making an offer to DfID.
iiiSRIF II – Integrated Engineering Research Centre
The Committee recalled that HEFCE had allocated £814,250 from SRIF II funds in respect of building works and equipment towards the relocation of the Wolfson Centre for bulk solids handling from the Woolwich Dockyard to join its host School (Engineering) at the Medway Campus. The proposed building works were now estimated to be in the region of £900,000 (£300,000 higher than originally projected). The outcome of a bid to the Wolfson Foundation would not be known until January 2005 and, although £100,000 of economies could be made, in order to produce a workable Centre, it would be necessary to cover the financial shortfall of £200,000.
The Committee agreed to recommend to Court that, in the event of the bid to Wolfson Foundation being unsuccessful, capital expenditure up to £200,000 (in addition to the £584,000 SRIF allocation) be approved towards the cost of the Integrated Engineering Research Centre.
04/10.3WOOLWICH (F 04/7(iii))
The Committee received a progress report on the disposal of the Woolwich buildings. Committee Members commended University officers on the successful sale of the Woolwich Island site to Powis Street Estates Limited for £4.2 million. It was further noted that preparations were now under way for the disposal of the Thomas Spencer Hall and the Bathway building.
FORMAL AGENDA
04/11SPIN-OUT COMPANIES (F 04/8)
The Committee approved the establishment of two spin-out companies; Carbon 8 Technologies (ACT and Medway Science Technologies Ltd (MST), noting that the proposals had gone through the agreed processes with UGMT Ltd.
04/12INTERNATIONAL FEE SETTING EXERCISE: 2005/2006 (F 04/9)
The Committee:
iendorsed the proposed 2005-2006 fees for international students as recommended by the University Programmes Fee Group
iinoted the proposed development of the number and range of awards and scholarships (to be centrally administered).
04/13DAVID FUSSEY CHORAL EXHIBITION FUND (F 04/10)
The Committee approved for recommendation to Court the following amendment to the terms of the David Fussey Choral Exhibition Fund:
“Where there is insufficient investment income to meet the agreed payments from the Fund, officers of the University of Greenwich may exercise their discretion in utilising some of the capital, provided that the capital of the Fund never falls below £230,000.”
04/14ESTABLISHMENT OF A NEW BANK ACCOUNT:
re: BANGLADESH CHARS PROJECT (NRI) (F 04/11)
The Committee approved the creation of bank account for NRI’s Bangladesh CHARS Project, noting that the account would be held with the Bank of Scotland and not the University’s bankers, Barclays.
04/15MEMBERSHIP OF UGMT LTD (F 04/12)
The Committee ratified the appointment of Reginald Daly, Director of Finance, as a member of the Board of UGMT Ltd with effect from 15 September 2004.
04/16APPROVAL OF ORDERS OVER £150,000 (F 04/13)
The Committee:
inoted that, in order to avoid anticipated price increases in steel, the Chairman of the Committee had authorised in August 2004, the placing of an order for £146,785 for the supply and installation of a shelving system at the new Medway Learning Resources Centre. These costs would be shared between the University of Greenwich and the University of Kent as part of the Universities at Medway project.
iisubject to the relevant School or Office having sufficient funds for the purchase and to compliance with the University’s Financing and tendering Regulations, the following purchases of items exceeding £150,000:
Estimated
Order Value
£’000
Procurement & Business Services for Schools and Offices
High Volume Photocopiers – hire and copy volume
contract with Xerox Finance of Xerox UK Limited £350,000
External Printing Services SRA2/B2 Size£416,000
Removals Services£160,000
Travel and Associated Services (eg Foreign Exchange)£700,000
04/17BERGMAN OSTERBERG TRUST FUND (F 04/14)
The Committee received the financial statements and annual report for the Bergman Osterberg Trust for the year ended 31 July 2004.
04/18INSURANCE (F 04/15)
The Committee received and noted a report on insurance arrangements.
The meeting ended at 7.55 pm.
T A Brighton
12 October 2004
Lcshare/FinanceCommittee/2004-2005/minutes/2004October4Fmins
Finance Committee 4 October 2004 page 1