HIGHLAND NHS BOARD

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MINUTE of MEETING of the ENDOWMENT FUNDS COMMITTEE
Board Room, Assynt House, Inverness / 1 October 2012–11.00 am

PresentMr Ray Stewart, Employee Director (In the Chair)

Mr Bill Brackenridge, Non Executive Director

Mr Mike Evans, Non Executive Director

Mr Ian Gibson, Non-Executive Director

Mr Nick Kenton, Director of Finance

Mr Okain McLennan, Non Executive Director

In AttendanceMr Iain Addison, Head of Area Accounting

Mrs Kelly Dallas, Endowment Support Officer

Mr Brian Mitchell, Board Committee Administrator

1WELCOME, APOLOGIES AND DECLARATION OF INTERESTS

Apologies were received from Mr Garry Coutts, Mrs Gillian McCreath, and Mrs Lyn Wormald.

Members were asked to consider whether they had an interest to declare in relation to any Item on the Agenda for this meeting. The following interests were declared:

  • Ray Stewart – Member of Unite, Staffside Chair and employee of NHS Highland.
  • Nick Kenton – Director of Finance, NHS Board Executive Director, and employee of NHS Highland.
  • All Members – NHS Board Non-Executive Director.

The Committee Noted the declarations of interest.
2MINUTE OF MEETING HELD ON 3 JULY 2012

The Committee Approved the Minute of the Meeting held on 3 July 2012.

3MATTERS ARISING

3.1ARCHIE Foundation

Mr I Gibson advised a meeting had been held with the Chair of the ARCHIE Foundation during which there had been discussion as to the potential impact of reconfiguration activity at Raigmore on the current fundraising campaign. Mr M Evans advised Mr D Cunningham, Chair of the Programme Board had been anxious to move matters forward and as such the Director of Operations for Raigmore had been asked to update him as to the current position. Mr N Kenton advised that the options relating to RaigmoreHospital were subject to relevant option appraisal, the results of which were awaited, and these would be subject to Scottish Government funding arrangements. There had been an indication given that the ARCHIE Programme Board were obliged, as part of conditions relating to certain monetary pledges, to expend resource within a set timescale, understood to be the current financial year. There was a desire to assist the Programme Board where possible.

After discussion, the CommitteeNoted the Chair would seek clarity from the NHS Board Chair and Chief Executive on the various issues involved.

3.2Trustees Report and Financial Statement 2010/2011

Mr O McLennan requested further detail in relation to the cancelled receipt discussed at the previous meeting.

The Committee Noted further detail would be provided.

3.3Review of Current Investment Policy

On the point raised, it was agreed that there would be a review of the current Endowment Funds Investment Policy, at the meeting to be held in January 2013 to which all Trustees would be invited.

The Committee so Noted.

4APPLICATIONS

There had been no applications submitted for consideration at this meeting.

The Committee so Noted.

5INVESTMENT FUNDS

Mr M Ivory spoke to the Committee, advising as to the current economic and market position and stating that, within a volatile market, performance could be considered better than expected, with Government Bonds having performed well and companies in a strong position remaining so. An outline of the current investment outlook was given, highlighting continuing issues within the Euro-zone area, including a slowdown in growth now evident in Germany. The UK economy remained weak. It was stated that in the current climate, investors increasingly had to take greater risks to ensure similar returns. With regard to the NHS Highland, the stated investment objective was to maintain the capital base of the Fund on a long term basis, operating under a medium risk approach, whilst generating an income level as dictated by the NHS Highland Endowment Funds Committee. Mr Ivory advised the current portfolio comprised approximately 70% Equities and 30% cash/Bonds and indicated performance in year to 31 August 2012, detailing those elements that made significant contributions to overall performance, and providing detail as to transactions undertaken. The current asset allocation was outlined, and it was advised that cash holdings would remain at a low level.

There followed short discussion, during which it was advised that the majority of investment in overseas Equities had been placed in the Asian market. In terms of assessment of the position of Fund Managers it was advised that where a Manager was changed this automatically triggered a reassessment of the Fund position. In general, regular weekly assessments were held, with full reviews undertaken as and when required.

Mr M Ivory left the meeting at 11.55am

Mr I Addison advised that the current arrangements for investment services were to be reviewed by April 2013. Mr R Stewart stated there would be a need for Trustees to more fully consider the investment requirements ahead of initiation of tendering procedures for new contract arrangements and suggested this form the major discussion at the next meeting in January 2013.

The Committee:

  • Noted the position relating to management of the NHSH Endowment Fund Portfolio.
  • Thanked Mr Ivory for attending and addressing the meeting.
  • Noted the arrangements for investment services were to be reviewed by April 2013.
  • Agreed there be full discussion by Trustees as to investment requirements at the meeting to be held on 7 January 2013.

6FINANCIAL REPORTS

6.1Financial Position to 31 August 2012

There had been circulated Financial Report outlining that the balance of the Unrestricted Funds as at 31 August 2012 was £4,682,569.69 and that for 2012/2013 Budget Funds, some £198,684.34 remained unspent.

Mr I Addison advised plans had now been received in relation to utilisation of the remaining sum within the Argyll and Bute Staff lottery Fund with a view to his being closed by end March 2013. There was a suggestion that rather than close the Fund in question this could be re-designated as the Argyll and Bute Staff Fund if considered appropriate. It was advised that the negative balance in relation to Fund RAIWCH29 reflected the position whereby a reimbursement of expenditure was awaited from ARCHIE. Similarly in relation to Fund SEHN&A01 reimbursement was awaited from the Friends of the Hospital. It was stated that the outstanding General Budget Fund allocation for the Raigmore Hospital Café, in the region of £60,000, may be returned to the overall General Fund .

The Committee otherwise Noted the financial position.

6.2Inactive Funds Position Statement as at 31 August 2012

There had been circulated update report detailing those Specific Funds where little, or no, activity had been evidenced in the previous two year period and indicating responses to a request for indication of associated spend proposals.

The Committee:

  • Noted the circulated report.
  • Agreed updates be provided to the next meeting where no response had been received.

6.3Exception Reportto 31 August 2012

There had been circulated report detailing expenditure from Endowment Funds in excess of £5,000 to 31 August 2012.

The CommitteeNoted the report.

6.4Donations Received Over £5,000 to 31 August 2012

There had been circulated report detailing donations over £5,000 received to 31 August 2012. It was advised one further donation, in the sum of £15,000 had been received following disposal of land at the former GestoHospitalsite.

The Committee Noted the report.

7REVIEW OF COMMITTEE CONSTITUTION

There had been circulated Endowment Funds Committee Constitution, which was to be reviewed in line with the current review of Standing Orders by the NHS Board. During discussion it was noted that activity regarding consolidation of accounts should be included within the April Workplan. There was agreement that the Director of Finance should be included in the Committee membership.

The CommitteeAgreed the Committee Constitution subject to the amendments discussed.

8NHS SCOTLAND ENDOWMENT FUNDS REVIEW

Mr I Addison spoke to the circulated letter dated 23 August 2012 and Draft Report and Recommendations on Governance and Best Practice for NHS Endowment Funds. He advised the document sought to provide greater clarity as to the role of Trustees, supported much of the activity in NHS Highland, although did not offer a solution to the issue of staff benefits. There followed discussion during which a number of members expressed concern as to various elements of the draft document, including the stated agreed principles for the use of Endowment Funds, and reference to inappropriateness of use for staff benefit.

Mr N Kenton left the meeting at 12.25pm

There was also concern expressed as to the CLO interpretation of relevant legislation and the effect this would have on all NHS Endowment Funds, and indeed on the entire charity sector in Scotland. On the question of Long Service Awards, CLO advice had indicated that this would acceptable where funded from a Specific Fund, at the discretion of Trustees. It was suggested that in Highland an approach should be adopted whereby all relevant documentation relating to the receipt of donations should indicate that ‘individuals may request that no part of an individual donation may be used for the benefit of staff’. This would be in line with the CLO advice referred to and would enable the creation of an appropriate Specific Fund for this purpose.

After discussion, the Committee:

  • Noted the circulated consultation letter and draft report.
  • Agreed a response be drafted including the points discussed relating to Valuing Service Awards and staff benefits issues.

9SCHEDULE OF MEETING DATES FOR 2013

There had been circulated report detailing the provisional schedule of meeting dates for 2013.

The Committee Noted the report.

10ANY OTHER COMPETENT BUSINESS

Mr R Stewart raised the issue of service integration and in particularthe ability of staff who had transferred employment to the Highland Council being able to access relevant NHS Highland Endowment Funds. Mr I Addison advised Children’s services staff can still access Funds through the usual application process. Work continued in relation to arranging the transfer of appropriate Staff Amenity resource etc from Highland Council to NHS Highland.

The Committee Noted the position.

11DATE OF NEXT MEETING

The next scheduled meeting of the Committeewill be held on 7 January 2013 at 11.00am in the Board Room, Assynt House.

The meeting closed at 12.45pm

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