Minutes of a meeting of the board of Leicester Corporation: Finance and general purposes committee

Held on 9 May 2024

Present: Danielle Gillett (Chair), Chan Kataria, Lesley Giles, Verity Hancock, Lee Soden, Robert Radford

In attendance: Louise Hazel - Director of Governance and Policy, Shabir Ismail - Deputy Principal/CEO, Della Sewell* - Director of HR, Shaun Curtis - Director of Estates and Campus Services (item 5), Harshad Taylor* - Director of IT (item 4)

* Joined via Teams

1. Declaration of interest

   • 1.1 There were no declarations of interest.

2. Apologies for absence

   • 2.1 There were no apologies for absence.

3. Minutes of previous meetings and matter arising

   • 3.1 The minutes of the meeting held on 7 March 2024 were received and

     agreed.

   • 3.2 The confidential minutes of the meeting held on 7 March 2024 were received and agreed.

4. Digital strategy review

   • 4.1 The Director of IT presented a report on progress with the Digital Strategy. The

     following points were highlighted.

     • 4.1.1 An update on the KPIs in the strategy was given. More IT suites had

       been created than originally planned; a range of capital funding

       sources had enabled this.

     • 4.1.2 There had not yet been movement on the number of MIEEs because

       of staffing changes in the Quality team but this was now being

       progressed.

     • 4.1.3 The uptake of Boxphish (cyber security) training had not been as high

       as planned. This was an important part of the College’s cyber security

       controls and so it would be made mandatory for staff. The cyber

       security attack on the City Council would be cited as an example of the

       risks.

     • 4.1.4 Smoothwall had been implemented and enabled the rapid notifications

       of any concerning issues with different levels of notification according

       to the seriousness of the incident. This was working well.

     • 4.1.5 The SLA target had not been met largely due to staffing issues in the

       IT team earlier in the year but the team was now almost at full

       complement and so it was expected this could be met. There had

       been positive feedback in the staff survey and all tickets were

       resolved.

     • 4.1.6 In terms of accessibility tools, the College would be asking JISC to

       review the tools used from a student and staff point of view; feedback

       from staff and students would also be sought.

     • 4.1.7 Capital investment was still needed. There were now many devices,

       bought during the pandemic which were coming to end of life and/or

       would not work with Windows 11 and needed replacing in order to

       comply with Cyber Essentials (CE) requirements. The cost of replacing

       them was estimated at £524k. The server infrastructure was out of

       support and also needed replacing at a cost of £350k. Capital grants

       would be used wherever possible to fund the new equipment.

     • 4.1.8 A capital budget was being developed which would include the server

       costs. The College was required to hold or be working towards CE but

       the requirements for this and CE+ were now much harder to meet. It

       might be necessary to fund the replacements over two years in order

       to meet CE but achieving CE+ was unlikely to be possible.

   • 4.2 Governors asked a number of questions including:

     • 4.2.1 The new IT rooms looked great but how were they being

       promoted to students so they knew when they could use them?

       Feedback was that they were locked. The rooms had been created

       in response to curriculum need, they were not intended as open

       access and were kept locked to ensure equipment was safe. Students

       could use the libraries which had open access.

     • 4.2.2 How much were they being used? There was high demand and the

       rooms would be fully timetabled for 2024/25 and so utilisation could be

       monitored.

     • 4.2.3 Could spend against the £524k replacement costs be prioritised

       to reduce the costs in 2024/25? This would be done; some spend

       might be pushed into 2025/26.

     • 4.2.4 When would surveys be completed to get views on the

       accessibility tools? A date for this had not been agreed.

     • 4.2.5 What was the worst outcome of delaying the MIEE rollout? This

       did not have any great risk; it was more about enhancing existing skills

       and improving productivity.

     • 4.2.6 At what stage would non-completion of cyber security training be

       escalated? As with other mandatory training, this would be taken up

       the management chain and could ultimately result in disciplinary

       action. This approach was working well with other training. Not all staff

       would be using computers regularly and so it might not be appropriate

       for them to be required to undertake the modules.

     • 4.2.7 What had been the outcome of the internal audit of IT disaster

       recovery? This had been an advisory review. No major concerns

       were raised and the minor recommendations were being actioned

     • 4.2.8 CE was an important and helpful defence but there was a balance

       to be struck between the costs and benefits of CE+. Agreed, few

       colleges had CE+. The College would not compromise on any

       vulnerabilities but needed to balance the investment required with the

       value of having CE+.

     • 4.2.9 What was the impact of not having CE+? There was no major

       impact although the College needed to be at least working towards CE

       to meet its ESFA contract.

     • 4.2.10 Did the KPIs sufficiently capture progress and manage risks, for

       example the staffing issues? The staffing issues had been

       addressed by working with the HR team to introduce market

       supplements which was proving effective.

     • 4.2.11 What performance management and tracking took place? KPI

       monitoring had resulted in interventions. The Digital Strategy

       Committee monitored progress with key priorities and actions and

       reviewed whether additional resources were needed. The ticketing

       system also enabled a triangulation and identification of any potential

       issues for the student or staff experience.

     • 4.2.12 Who was on the Digital Strategy Committee? The Deputy Principal

       and Directors of IT, HR, Governance and Policy and Quality.

       Membership would be extended to include curriculum.

     • 4.2.13 Did the team employ any apprentices? One apprentice would

       shortly be joining the information analysts team.

   • 4.3 Members noted the report on progress with the Digital Strategy and

     requested an update in a year’s time.

5. Capital update

   • 5.1 The Director of Estates and Campus Services presented an update on the

     capital programme. The following points were highlighted.

     • 5.1.1 An update on current capital projects was provided. The majority were

       on track and on budget.

     • 5.1.2 The Office for Students (OfS) funded aeronautical project (£5.58

       million) was in progress, planning was expected to be finalised on 20

       May and tenders would be issues on 13 May with a five week

       deadline. Current cost estimates were indicating a potential overspend

       but it was hard to predict where tenders would come in.

     • 5.1.3 The fabrication and welding project would complete next week.

       Timelines had slipped because the original contractor had gone bust.

     • 5.1.4 The T level electro technical project was due for planning in May.

     • 5.1.5 The APC boundary fence had been delayed in planning for a long time

       but was expected to be completed over the summer

   • 5.2 Governors asked a number of questions including:

     • 5.2.1 Had a new venue for painting and decorating been agreed? It had.

     • 5.2.2 What was the market intelligence about where quotes would

       come in? It was really hard to tell. The OfS project was the one the

       College was most nervous about because of the cost and scale but

       once tenders were in, the position would be clearer. If necessary, the

       OfS might need to be asked for additional funding or the other capital

       commitments might need to be reviewed.

     • 5.2.3 Was the OfS likely to agree this? It was unknown at this stage.

       There was a process which would need to be gone through.

   • 5.3 Members noted the capital update.

6. Holiday pay update - CONFIDENTIAL

7. Finance report (Period 8)

   • 7.1 The Deputy Principal presented the finance report (period 8). The following

     points were highlighted.

     • 7.1.1 The year to date result was an operating deficit after restructuring

       costs of £1,506k compared to the budgeted deficit of £1,390k.

     • 7.1.2 16-18 learner student numbers were above allocation by 214 students,

       and the College would receive additional in year funding for this. Set

       against this would be a clawback for the shortfall in T level students.

     • 7.1.3 Indications were that the College would achieve its AEB target and

       should even exceed it. The data return showed an increase of 13%

       compared to the same point last year.

     • 7.1.4 Apprenticeship income was currently in line with the revised target but

       EPA completion was still uncertain.

     • 7.1.5 HE income overall was expected to fall short of the autumn reforecast

       target following the second census date.

     • 7.1.6 A spring reforecast was undertaken in which the expected Total

       Comprehensive Income after restructuring costs decreased by £156k,

       from a deficit of £946k to a deficit of £1,102k.

     • 7.1.7 Financial health remained ‘requires improvement’. The spring

       reforecast resulted in a breach of one of the bank covenants, although

       an email had now been received confirming that the bank would either

       waive the test for the DSC covenant again for 2024, returning to 1.5%

       thereafter or reduce the testing threshold to 110%, depending on the

       College’s preference. The implications of this were being modelled but

       it was likely that the College would choose the waiver.

   • 7.2 Governors asked a number of questions including:

     • 7.2.1 Was the position still a million down? It was although this was

       planned and the EDITDA was positive so the College was generating

       cash and would move to a more positive position for 2024/25.

     • 7.2.2 Would the waiver be a temporary suspension for this year only? It

       would; it was unlikely the bank would agree it for another year.

     • 7.2.3 It was hard to relate the commentary on capital expenditure with

       the capital update report. Was there confidence that all

       expenditure was captured. The report included projects that ran

       across multiple years whereas the management accounts showed this

       year only. Spend was monitored in year and minor adjustments

       approved by ELT; any material changes would be brought to F&GP.

       There was confidence that all projects were on track.

     • 7.2.4 What was the reason for variance in non-pay? It had been

       assumed that in-year savings would need to be made. Some savings

       had been achieved but there were additional non-pay costs notably

       exam fees.

     • 7.2.5 Was the position likely to improve between now and year end? It

       was unlikely although there would be some movements. The AEB

       remained hard to predict.

8. Members noted the Period 8 finance report.

9. Tuition fees 2024/25

   • 9.1 The Deputy Principal presented the Tuition Fees Policy for 2024/25. The

     following points were highlighted.

     • 9.1.1 The policy was consistent with the ESFA funding guidance for

       2024/25.

     • 9.1.2 Changes proposed included a move to calculating course fees by

       qualifications rather than hourly rate, as required by the EBS

       transformation project.

     • 9.1.3 Fees for unfunded students would be set at the ESFA methodology full

       funded rate.

     • 9.1.4 As part of the EBS changes, instalment plans could not be started at

       enrolment. In order to be able to collect the fee one month before the

       student finished their course, the number of instalments needed to be

       reduced so for students whose fees were greater than £895 they

       would pay over nine instalments, rather than ten.

     • 9.1.5 For unauthorised absence at functional skills, ESOL and skills for life

       exams, students would be charged a £5 non-attendance fee to

       encourage better attendance at exams.

   • 9.2 Members approved the Tuition Fee Policy for 2024/25

10. Bad debt write off

    • 10.1 The Deputy Principal presented a paper requesting authority to write-off debts

      that were considered uncollectable. The following points were highlighted:

      • 10.1.1 It was proposed that one debt of £1,483 was written off.

      • 10.1.2 The debts had been chased as far as possible and were now

        considered to be uncollectable.

      • 10.1.3 During the academic year to date, from 1 August 2023, there had been

        write offs of £14,057. With this recommendation, the cumulative total

        for the year would be £15,540

    • 10.2 Members considered the paper and agreed to approve the write-off of

      uncollectable debt of £1,483.

11. Any other business - CONFIDENTIAL

12. Waivers of financial regulations

    • 12.1 Members received and noted the report on waivers of financial regulations

13. College financial handbook

    • 13.1 Members received and noted the College Financial handbook.

14. ESFA Financial dashboard

    • 14.1 Members received and noted the ESFA Financial dashboard.

15. Dates of next meetings

    • 27 June 2024