SEC/2011/2/0149

Minutes of the forty-seventh annual meeting of the Court held on 29 January 2011

PRESENT:

CLASS I: Ex officio members who are Officers of the University

Professor S. Henig (in the chair at the invitation of the Chancellor)

Dr F. Benson Professor M. J. Kosch Sir C. Bonington Ms M. Luxon Professor S. Bradley Professor R. D. McKinlay Dr G. Brown Professor T. J. McMillan Professor A. G. Chetwynd Dr G. Myers Mrs J. Corless Dr J. Owen-Lynch Dr K. Davidson Mr R. Pickles Professor P. J. Diggle Fr H. Pollock Dr P. Dolby Ms C. Powne Mr A. Errington Professor A. Stefanovska Professor A. C. Gatrell Mrs A. Stubbins Mr R. Gould Mr D. Summers Mr B. M. Gray Dr J. Taylor Mr J. Hadfield Mr J. Thornberry Mr J. Hardman Mr F. Wareing Mrs V. Haslam Professor P. W. Wellings Mr J. Hayton Professor J. Whitehead Professor G. Johnes

CLASS II: Other Ex Officio Members

Ms J. Blakemore Mr D. McGuire Ms E. Blanchard Mr J. Mitchell Ms C. Byrne Ms J. Newport County Councillor Ms S. Charles Ms R. Nobes Mr R. Clark Mr E. Ollerenshaw Mr S. Crompton Mr G. Parker Ms R. Essex Mr A. Pearson Mr M. Farmer Ms R. Pickles Mr A. M. Fogden Ms A. Ruttigan Ms J. Gaskell Mr M. Saint Mr R. Goodings Mr P. Smith Mr M. Handley Mr S. Smith Mr A. Harborne Mr O. Susoy Ms L. Houghton Professor H. Thomason Mr R. Hughes Mr O. Trumble Mr S. Jain Ms K. Van-Heerden Mr S. Kahn Mr A. Wilkinson Mr M. Lord Mr M. Windsor Mr P. Macmillan Mr K. Wong Councillor G. Marsland

1 CLASS III: Appointed Members

Mr S. Aitken Mrs J. Humble Mr I. Anderson Mr A. M. Jarman Dr P. Banister Mr S. Langhorn Dr L. J. Banton Professor G. Leech Mr D. Barron Councillor J. R. Mace Chief Superintendent R. Bayly Mr N. Macfarlane Mrs J. A. Beever Mr J. F. D. McMillan Mr G. Beveridge Mrs I. Melling Mrs C. K. Bhamra Ms K. Montgomery Mr R. Bingham Mr T. A. P. Mullarkey Councillor Mrs E. Blamire Fr. Deacon C. Neill Mr I. Brooks Mr A. Pickett Mr W. Brooks Mr M. Pickles Mrs J. Cahalin Mr D. Porter Rt. Revd. M. Campbell Ms G. Rand Mr R. Cartwright Mr N. Richardson Mr W. Charnley Dr E. A. M. Roberts Councillor K. Cleary Mr K. Royales Mrs L. Croston Mr G. F. Rycroft Mr P. Dyer Mr A. Sharman Mr D. Finch Mr M. Smith County Councillor Ms S. Fishwick Ms S. Starkey Mr R. Frankland Ms S. Strachan Mr D. Frost Mrs S. Summers Dr J. Gardner Mr P. Taylor Ms J. Garnett Sir W. Taylor Mr S. Gee Miss E. Tindale Mrs R. Georghiou Mr A. Vann Mrs J. Greenhalgh Mr G. Waller Mr P. Hagopian Mr S. Watson County Councillor Ms J. Hanson Mr G. Webster Mr D. Hogan Revd. M. Weisman Mr F. Hogan Miss R. Wilde Mr S. Holdup Ms H. A. Willes

CLASS IV: Additional Members

Mr A. J. W. Attard Mrs M. E. McClintock Mr W. Bingley Mr I. McCulloch Mr A. C. Bryning Mr W. Nettleford Dr H. A. Cann Mr M. Payne Professor J. P. Davis Mr T. Perkins Dr J. V. Dyer Mr T. Roca Mr D. Galbraith Mr A. Sandham Miss J. Grady Mr B. Sneddon Mrs J. Grocott Lord Taylor of Blackburn Mr M. Hart Mr J. Travis Mrs A. Heynes Mr R. Turner Mr G. A. Johnson Mr R. Walters Mrs A. T. Jones Mr A. Whitaker Lord Judd Mr C. Woodhouse Mr D. Mainwaring

2 OFFICERS IN ATTENDANCE

Miss F. M. Aiken (University Secretary) Mr J. S. W. Dickinson (Senior Assistant Secretary) (Secretary to the Court) Mrs S. Randall-Paley (Director of Finance) Mr M. Swindlehurst (Director of Facilities)

Apologies for absence were received from 37 people.

1. Chairman’s Introduction

1.1 The Chancellor opened the meeting of Court by welcoming members, reflecting on the highlights of 2010 and looking forward to events in 2011 such as the opening of the new Sports Centre. He then requested that the Deputy Pro-Chancellor, Professor Stanley Henig, take the chair on his behalf.

2. Minutes

The minutes of the meeting of the Court held on 30 January 2010 were confirmed subject to a minor amendment in minute 5.8 where it was agreed that the word “agreement" would be changed to “settlement”.

3. Annual Report of the Pro-Chancellor

3.1 Mr Bryan Gray, the Pro-Chancellor, presented his report of the Council’s work, noting that 2010 had been a year of uncertainty with changes in government, higher education frameworks and regional support mechanisms, and with greater change expected following the Browne Review of changes in the funding and fee models, and a government White Paper on higher education due in Spring 2011. In this environment the Council had continued to monitor the University’s Strategic Plan, focusing particularly on internationalisation. It had also overseen capital developments including the completion of the Information Systems Service building, the new Lancaster Institute for Contemporary Arts (LICA), the redevelopment of Bowland Main and the redevelopment of space for Health and Medicine. Council had reviewed its Risk Policy as well as reviewing its role within the institution in the light of the new Financial Memorandum issued by HEFCE. Through the work of the Council, the Pro-Chancellor reported that Court could be confident in Lancaster’s continuing success. There would be challenges in the year ahead, most notably the changes in student funding arrangements, for which Council fully recognised students’ concerns and supported their right to peaceful protest, but Lancaster was in a strong position to secure a positive future. Finally the Pro-Chancellor recorded his personal thanks to Professor Henig for his support during his period of office as Deputy Pro-Chancellor.

3.2 The Court received the Pro-Chancellor’s report.

4. Annual Report of the Vice-Chancellor

4.1 Policy Outlook over the next four years

Professor Paul Wellings, the Vice-Chancellor, presented his ninth annual report. He drew Court’s attention to the 2010 Report and Accounts, noting that the academic year 2009/10 had been one of the finest years on record for the University. He presented an overview of national-level policy development through to 2015. Following the election of the coalition government in mid-2010, the Browne Review of student funding and the government Comprehensive Spending Review in November 2010, he noted that two major decisions had been taken by government with regard to higher education: (1) to allocate flat cash for

3 research over the period of the Comprehensive Spending Review; and (2) to change the basis of teaching grants by reducing the direct funding for teaching via HEFCE and by increasing the capacity for universities to charge higher fees for Home/EU undergraduates. These decisions reflected the coalition’s aims to:

 allow funding to follow students;  allow variation in pricing between institutions, thus creating a market;  allow new private sector entrants into this market;  increase the autonomy of universities.

In addition, the Vice-Chancellor suggested that a fifth aim, to allow greater competition for student numbers, would soon follow. For 2010/11 the budget was set, but 2011/12 would see some reduction of government funding and the budgets would be developed following the normal timetable once funding details were received from HEFCE. From 2012/13 through to 2015 budgets would look very different as state funding for teaching significantly declined on the order of 80%. Lancaster, having anticipated much of these changes of direction, was implementing arrangements to ensure as smooth a transition as possible. Some elements of the changes would be difficult for the sector and many institutions would be required to streamline functions. However, Lancaster had the governance structures in place to allow considered responses to the complex and rapidly changing environment, and recent academic and administrative reforms gave Lancaster the necessary resilience to face the future.

4.2 High performance year

2009/10, the Vice-Chancellor reported had been a high performance year. Financial indicators were strong with a growth rate of 5.6%, a retained surplus of 4.4% and an increased turnover to £178m. The University had been recognised in a number of awards including:

 two THE Prizes for Best Research and Best Finance Team;  short-listed as University of the Year;  a third Queen’s Anniversary Prize for work on Food Security;  league table rankings at their highest ever, including top ten in all three domestic league tables.

In addition, he was delighted to report the award of an OBE to Professor Sue Cox for services to Social Science.

4.3 The student body and experience

The student experience at Lancaster remained strong, as reflected in the National Student Survey results. Entry standards were their highest ever and the widening participation strategy continued to make progress against the framework agreed with OFFA. Applications for 2011/12 were up 31% for home/EU and 52% for international undergraduates, increases that would continue to drive up entry standards. Postgraduate courses also remained popular, as did overseas partnerships, and Professor Steve Bradley had been appointed as Pro-Vice- Chancellor (International) to take forward this latter element.

4.4 New facilities on campus

The campus estate had been transformed, reflecting much hard work over the past six years. 2010 had seen delivery of: refurbished buildings around County College; the new LICA building; and the new Information Systems Services building. 2011 would see the delivery of the Charles Carter Building and the Sports Centre, and the refurbishment of Alexandra Square. Planning was continuing for the development of a wind turbine as part of the overall environmental sustainability policy. In the ten years since 2000 £357m had been spent on the estate and facilities on campus, of which £207m had gone on amenities for students. An additional £177m was planned for the coming triennium.

4 4.5 Conclusion

In conclusion, the Vice-Chancellor declared that 2009/10 had been an exceptional year for Lancaster. Staff had worked hard to improve the standing of the University both in teaching and research. While the new funding context was challenging and brought with it many risks, it was also an environment in which autonomous well-governed institutions could flourish, and he was confident that Lancaster University would continue to be in that group.

4.6 Mr Roger Bingham asked to what extent the University was sustaining its outreach to all age ranges, to which the Vice-Chancellor replied although this was an enormous challenge under the current funding circumstances, the University was committed to its engagements, particularly through its Public Arts.

4.7 In response to a question from Mrs J. Greenhalgh it was confirmed that the Sports Centre was being designed to the highest environmental specifications.

4.8 Mr William Brooks asked whether investment funds for equity for spin-off companies were being considered. He was told that this was being considered within the wider debate regarding knowledge exchange and commercial affairs, for which Council member Professor Harry Thomason was chairing a Council committee that was committed to driving forward the agenda.

4.9 Lord Judd commented that the higher education sector was entering a period of transition and that Court would want to ensure that it did not become a passive observer in the process. He asked how the university was measuring the widening participation and outreach projects to ensure that students from disadvantaged backgrounds would still have access to the full range of university provision and not solely to vocational programmes. The Vice-Chancellor emphasised the Court’s role as a critical colleague. He further recognised that widening participation was a complex area, and gave the Court an assurance that Lancaster continued to perform strongly with regard to widening access. Along with the 1994 Group of Universities, the University had strongly lobbied government to recognise the value of all degrees and not only those in the STEM subjects. Lancaster would continue to develop support mechanisms to allow all students to pursue their chosen subjects and avoid a reductionist utilitarian approach where all degrees were considered solely for their vocational output.

4.10 Sir William Taylor commented that students were the leaders of tomorrow and that extracurricular and non-academic opportunities needed to be maintained to ensure a well rounded student experience. The Vice-Chancellor agreed, noting that student expectations had changed and that extracurricular activity was now key to ensure positive student experiences; a task that was being taken up by Professor Amanda Chetwynd in her role as Pro-Vice-Chancellor (Colleges and the Student Experience).

4.11 Mr Charles Woodhouse enquired if the Vice-Chancellor had any advice for schools regarding academy status, to which he replied that it was a difficult decision that each school would need to make in the light of its own circumstances.

4.12 Mr Jo Hardman commented that the Browne review of student funding had not considered postgraduate provision. The Vice-Chancellor noted that government White Paper was intended to address this issue, but agreed that it was a potential area of national planning vulnerability.

4.13 Mr Andrew Jarman enquired as to how Lancaster was modelling its admissions, particularly with regard to students going to study in the European Union. It was noted from a question from Mr J. Marsden that provision for mature students could be adversely affected by the new direct relationship between students and funding. While the cuts in direct government funding would potentially be offset by changes in tuition fees, it was noted in response to a question from Mr Stuart Langhorn that the University was reviewing its procedures to see if procedural efficiencies could be identified so as to allow more staff time to be dedicated to frontline academic delivery.

5 4.14 In a final question, Professor Peter Diggle asked whether there was benefit in reviewing the level of retained surplus to strategically invest in a time when the majority of the sector was likely to be reducing services in light of government spending cuts. The Vice-Chancellor replied that financial solidity was critical to meet the institution’s strategic vision, but that Council would continue to keep this and other financial matters under review in light of external imperatives.

4.15 The Court thanked the Vice-Chancellor and received his annual report.

5. University accounts as at 31 July 2010

5.1 2009-10 financial results

Mrs Sarah Randall-Paley, Director of Finance, presented to the Court the audited University Accounts as at 31 July 2010. She reported that it had been a strong year with total income of £177.9 m, an increase of £9.5 m increase on the year before. Financial highlights included the achievement of a 4.4% surplus, an improvement of cash generation to £17 m, payroll costs maintained below the 60% threshold at 58.4% and a current asset ratio as of 31 July 2010 of 1.44. The refinancing that had been reported to the Court in 2010 had been completed and the University’s secured credit rating of A+ from Standard & Poor’s was now with a stable outlook.

5.2 Performance indicators and benchmarks

A series of performance indicators and benchmarks were presented indicating that the University was in a strong financial position. The underlying surplus had continued to be above target, having risen by 0.2% to 4.4%. The current assets to liabilities ratio had declined slightly, as from 1.71 to 1.44, owing to ongoing activities within University’s capital programme, but this had been anticipated, and was still well within target. Cash generation had seen a significant improvement from £11.3 m to £17.1 m, while the gross debt to income percentage had increased from 21.7% to 31.6%, but still reflected a low level of debt relative to the University’s peer group. Court was presented with benchmarking data against other universities in the 1994 Group, in which it was demonstrated that Lancaster was in a strong position on key measures viz. cost surplus, current asset ratio, cash flow as percentage of turnover and ratio of debt to income.

5.3 Looking forward

From 2011/12 and onwards it was predicted that there would be government pressures on both teaching and research funding, and increasing pay and pension costs. However, key support for growth plans were in place including: the Management School, LICA, Health & Medicine, the Sports Centre and the Learning Zone. In addition a major focus on process efficiency was under way. The University’s Finance Strategy had been agreed by the Council and had set targets for 2013 as follows:

2008/09 2009/10 2013 Insured value of estate £420 m £440 m £500 m Cash generation £11 m £17 m £23 m Surplus target 4-5% 4-5% 5% Repairs and maintenance £4.6 m £5.9 m £8-9 m Debt to income 21.7% 31.6% less than 50%

In summary 2009/10 had been a good result with improved cash generation. 2010/11 was proceeding smoothly with the out-turn underway almost completed. 2011/12 would be a difficult transition year, with much clarification still required from external sources, and 2012/13 onwards would present a different landscape for higher education in . However, the consistent underpinning financial strategy in place positioned the University strongly to manage change and to continue to prosper.

6 5.4 The Court thanked the Director of Finance and received the audited accounts of the University for the year ending 31 July 2010.

6. Report from the Lancaster University Students Union: Accounts of the LU Students’ Union

6.1 Mr Robbie Pickles, Students’ Union President, presented the annual report of the Students’ Union in what he characterised as the new world of higher education. In anticipation of the changes to fees and funding, he stressed the necessity of the University to welcome and understand the student voice, as well as the role of the Students’ Union in partnership with the University to give this voice agency. In this aspect, he reported the Students’ Union had recently reviewed the roles and remits of its senior officers and revised them to better meet student requirements. He was now in discussions with the University regarding governance arrangements between the University and the Union, and was confident that structures would be developed to instil a real partnership between the two. He referenced, by way of example, a working group under the chair of the Pro-Vice-Chancellor (Colleges and the Student Experience) which was working to develop the University’s student experience strategy and which had included students as the majority of its membership.

6.2 2010 had seen the Students’ Union become an independent registered charity; an act which placed it ahead of its sector colleagues. 2010 had also seen many successes, with large events on the campus designed to celebrate the success of students, not least the triumph in the Roses competition against students from the University of York. On this last point, the President noted that the new Sports Centre would be critical to future success and that the Students’ Union was working closely with Facilities to assure this.

6.3 Partnerships for positive change had been in evidence throughout 2010. Highlights included the Students’ Union’s work with Lancaster’s overseas partners, including Goenka and Sunway. These partnerships provided new opportunities for students which the President was confident his successors would realise.

6.4 While there were many positive developments through 2010, the President drew the Court’s attention to the issue of space, in which he suggested that the University was not keeping up with the demands of the students. The operation of LUSU was being constrained by space inadequacies which would need addressing through 2011. Other areas which the President drew to the Court’s attention as requiring University and Students’ Union further engagement included: student housing, student learning support and health and wellbeing, particularly in the last element with regard to the laying down of the Nurse-led Unit. He stressed the importance of proper dialogue about these and other issues, particularly in the light of future student expectations under the new fees and funding structures.

6.5 He concluded by stressing that the Students’ Union saw its role as a critical friend to the University. The transition years to come would be difficult, as had been acknowledged by previous speakers, and many decisions would need to be made. It was imperative that the Students’ Union be wholly involved in these decisions to ensure that the voices of students upon whom the impact would be most keenly felt were heard. The University could ill afford to select under which limited circumstances it would choose to engage with the Union; a universal partnership recognising the diversity of student needs across all of Lancaster’s student-facing activity was essential to future growth and prosperity. Where this required change in structures and practices, these would need to be implemented, and while not changing might appear in the short-term as a simpler option, the medium to long-term consequences of such an approach would be in neither the University’s nor the students’ interests. The President was confident that the University would make the right choice.

6.6 Mr D. Galbraith noted that under the new arrangements to come students were more likely to consider themselves as consumers and sought assurances that this would not adversely affect academic standards, while Lord Taylor endorsed the Student’ Union President’s commitment to partnership, and Mr Stuart Langhorn suggested that the Students’ Union needed to ensure that it was consistent in it political message. The President gave assurances that the Union would continue to work with the University to ensure that academic standards were

7 maintained as these were in the interests of all concerned. However, in other aspects of the student experience he considered that changes to meet the students’ needs would be required. This message was one that he contended had been the consistent position of the Students’ Union, both locally and nationally and rejected the accusation that this was not the case.

6.7 Fr. Deacon Chris Neill reported that LUSU played a critical role in helping the University remove any instances of bullying of students, and Professor Peter Diggle drew the Court’s attention to the closure of the Nurse-led Unit which the President confirmed had not met with Union support. It was critical that such decisions, if taken in the context of broader strategies, were clearly explained and endorsed to ensure both transparency and engagement.

6.8 The Court thanks the Students’ Union President and received the annual report of the Lancaster University Students’ Union.

7. Higher Education Funding and Fees

7.1 The Court received the final report of the Council appointed working party appointed to investigate the impact of tuition fees along with an extract from the meeting of Council held 18 June 2010 detailing Council’s considerations.

8. Lancaster University and the recent changes to the HE funding model

8.1 Mr Alan Whitaker proposed a motion to establish a Court working group to consider and examine the impact for Lancaster on the new fees level and funding model for Higher Education noting that such a group would offer the opportunity for Court to comment on these areas and a transparency in the decision-making process which would better enable to University to meet the forthcoming challenges. To this end he suggested an amendment to the proposal with the inclusion of a fourth area for consideration, widening participation and fair access. The working group would provide decision makers with access to additional expertise, it would bring a fresh eye to assist the University and provide an external perspective. It was acknowledged that there could be an issue of timing of any recommendations, and that interim reports might need to be considered. Mr Tim Roca, who, along with Mr Michael Payne, seconded the motion, noted that the University needed to engage in a constructive debate regarding this issue and the working group would afford one such venue for this.

8.2 Professor Bob McKinlay, responding on behalf of University management, acknowledged that the issue was significant, but questioned the necessity of an additional working group in the light of both the significant consultation that was already taking place, as well as the formal governance channels within the University that were taking the necessary decisions and included a wide range of persons both internal and external to the University. The timing of the decision-making was also such that flexibility was required in order to allow proper engagement, and it was not clear what role the proposed working group could play.

8.3 In discussion the following points were noted.

 The Students’ Union had not been involved in the development of the motion, and did not consider that the working group was necessary given other governance structures available.

 The working group would allow additional opportunity for external voices.

 The final decision regarding fees would be taken by the Council in order to meet an externally imposed timetable and it was not clear how the timelines proposed for the working group would intersect effectively with that timetable.

8  Student engagement was being strengthened at Lancaster, most recently through the establishment of the Colleges and Student Experience Committee and the Court could have confidence in the University’s commitment to ensuring students’ engagement in discussions.

 The role of the Court was to provide the University with an external perspective and it should aid in any way it could in the defence of the role of students as citizens and not mere consumers.

 It was not clear from the proposal how the working group would meet its intended outcome, and not duplicate other structures. However, if it could add value and bring elements otherwise unavailable to University management, these should be supported.

 Within the formal governance terms of the University there was a danger that a Court working group would create a parallel system which would extend beyond the role of the Court, and could make excessive demands of limited University resources.

8.4 Mr Whitaker, in concluding the debate, thanked the Court for the wide ranging discussion. He reiterated that the proposal was designed to act in the best interests of students, the Court and the University. He drew attention to the working group’s remit as a recommending body and contended that this did not take it beyond the Court’s agreed governance role.

8.5 By a show of hands the motion was declined.

9. Co-options to the Court

The Court agreed:

(a) to approve the following nominations to fill vacancies in Class IV(a) for the period 31 January to the date of the annual meeting of the Court in 2014:

Councillor A. C. Bryning Mr R. J. Cox Dr C. Garner Mrs A. T. Jones Mr H. Owen Ms C. J. Smith

(b) that a further call for nominations to fill the remaining vacancies should be made and the Chair be authorised to confirm additional appointments.

Action: University Secretary

10. Report of the Nominations Committee to Court about appointments to Court

The Court received and noted the report.

11. Court appointments to the Nominations Committee

Document: SEC/2010/2/0021

The Court was reminded that nominations had been invited to fill a vacancy on the Nominations Committee. The following nomination had been received:

Mrs M. E. McClintock

9 The Court approved this appointment.

Action: University Secretary

12. Conclusion

12.1 The Chair thanked all those present for their attendance.

12.2 The Chancellor welcomed the effective work between the University and the Students’ Union that had been demonstrated over the course of the meeting. He thanked Professor Stanley Henig for both this chairing and for all his work with the University, noting that this was his final meeting prior to retirement from his position as Deputy Pro-Chancellor.

12.3 The Chancellor closed the forty-seventh annual meeting of the Court.

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