There Being No Further Business the Meeting Closed at 12.20Pm

F/Oct23/M

FINANCE COMMITTEE

Minutes of the meeting of the Finance Committee held on Friday 23rd October at 11.00am at Ruskin College, Dunstan Road, Old Headington, Oxford, OX3 9BZ

Present: In attendance:

Anne Hock (Chair) AH Sally Courtney (Finance Director) SC Bridget Ng’andu BN Paul Di Felice (Vice-Principal) PdF Marva Small MS Katherine Moss (Internal auditor, Critchley’s) Chris Wilkes (Principal) CW Helen Jeffries (Clerk)

Hannah Jones (part)

Action

The Chair welcomed Katherine Moss as an observer at the meeting. The Chair reported that John Fray had resigned from the Finance Committee and as a governor, and thanked him for his contribution. The great help and support that he provided would be missed.

1 Apologies for absence There were no apologies for absence.

2 Declarations of interest There were no declarations of interest.

3 Minutes Received: the minutes of the Finance Committee meeting held on June 19th 2015 Confirmed: as a correct record the minutes of the Finance Committee meeting held on June 19th 2015

4 Matters arising Noted (4.1): a query regarding severance costs. Total severance costs were shown in the draft annual report. Noted (4.2): that the internal audit service (Critchley’s) wished to relate the minute on page 6 under the discussion of the Code of Good Governance “Internal auditors looked at quality of data regularly” to the minutes of the Audit Committee of 5th June “Student data quality in relation to funding would be reported on by the internal audit service after the new Management Information System was installed”. The Principal reported that the new system was in place. Noted (4.3): that the post of Development Officer had been advertised, but that the management team had been unhappy with the quality of the responses. The post would be re-advertised. The College had taken advice from the Director of Development for Oxford Colleges on the advert. The salary offered was £25-30K. The job description would be sent out to the Finance Committee members. Clerk 1 Finance Committee minutes F/Oct23/M As an interim measure the College had considered buying in help from the Oxford Development Office, though it was recognised that the work would need to be specific to Ruskin College. Noted (4.4): that, in the interim, work could be completed on policies on fundraising and the setting up of a Development Committee that the Development Officer would service. Noted (4.5): that the Chair wished to raise the issue of the length of time that it had taken to recruit a Development Officer to the Governing Executive. Noted (4.6): that the role of development also involved two other part-time posts of Trade Union Research and Curriculum Development and Trade Union Education Development Officer. The latter in particular dealing with marketing, social media and the website. Noted (4.7): the Chair’s concern that the College would not be able to fill the post, especially with regard to the expense of living in Oxford. The Chair asked if there was an interim plan. Noted (4.8): that policies and procedures needed to be put in place. The College could consider the use of agency staff. It was felt that this would be too expensive. Noted (4.9): that the College could advertise the post with the trade unions.

MANAGEMENT TEAM REPORTS AND SPECIAL ITEMS

5 Finance Director’s report Received: a report on the financial position to end September 2015. Noted (5.1): that the Catering Letter of Agreement with Wilson Vale and a financial summary for catering were tabled. Noted (5.2): that the College had received its first instalment of money from Student Finance England (c. £330,000), which showed how well Finance staff had worked with students. The Chair expressed thanks to all staff concerned for their hard work. This also showed that academic staff were better aware of finance and were considering funding for students before the student arrived at the College. Noted (5.3): that the payroll forecast was as expected. Noted (5.4): that the College was forecasting a ratio above that of the expected 1:1 in order to meet the existing bank covenant. Noted (5.5): that the management accounts for September showed a financial grade of ‘Satisfactory’ against the Skills Funding Agency (SFA) template. Noted (5.6): that the College had generated in excess of £85k of revenue through summer school bookings, and had already been asked to reserve bookings for next year. There were constant enquiries regarding the use of conference space and rooms and a recent booking for a birthday party had generated £1,100. Noted (5.7): that the Bowen residential block was redecorated during the summer. Occupancy levels were at 70% and the College was considering options to fill the vacancies. Noted (5.8): that the new contract for the café started on 1st September. The College was very pleased with the service to date and food quality had improved. A catering group which would include staff, students and Wilson Vale would meet termly. Noted (5.9): that the annual cost to the College in 2015/16 should be £70k as opposed to £145k in 2014/15. The intention was to drive down costs by generating more external income. The gross profit for last year was 32-33%, this year should realise 46%.

2 F/Oct23/M Noted (5.10): that the Co-operative bank had confirmed that they would offer an overdraft facility for the College and that this would be monitored closely. Noted (5.11): that it would be helpful to distinguish costs such as severance pay from other staff costs. Noted (5.12): a query on the amount of General Running Costs for Learning and Teaching. This was an accrual against sub-contractor costs.

ITEMS TO RECEIVE

6 Overdraft facility from Co-operative Bank Received: a copy of an e-mail regarding the overdraft facility offered to the College by the Co-operative Bank. Noted (6.1): that the College would meet with the bank’s officers next week to confirm the offer. It would be for a six month period and for a maximum of £150k. The lack of cash related to the timing of the payments from SFE-the College would receive £700k in May. Noted (6.2): that the College needed to fundraise for £500k in order to remove pressure on cash flow. Noted (6.3): that the external auditor required the comfort of a facilities letter before signing off the annual accounts.

7 Draft Annual Report and Accounts Received: the draft annual report and accounts for the year ended 31 July 2015. Noted (7.1): that the report should be owned by the Governing Executive, and that it might be worth considering a highlights report with good news stories. This could be part of the Development Officer’s role. Noted (7.2): that the end of year deficit was £564k, of which £540k was depreciation. Noted (7.3): that the balance sheet will be re-stated in line with the HE SORP as scholarships, bursaries and prize funds were currently shown only in the investment line. Cash should be split into another line. Noted (7.4): that the College was currently dealing with concerns from the auditors regarding the method in which the College accounted for funding council learner support income. The College was aware that other colleges used the same method as Ruskin and was unaware of any challenges to them. RSM UK was raising a potential regularity issue. The College was working with its advisers to try to find a way through the issue. However it was difficult to prove that the College had followed SFA funding guidance as the original agreement on the funding was verbal. If the accounts were to be re-stated there was the potential for a large amount of clawback. The amounts referred to were shown in Notes 1 and 23 of the accounts and the balance was shown in the Profit and Loss report. The College had reported in the same way as other colleges. Noted (7.5): that the College had raised the issue at the recovery plan meeting with the SFA. The SFA representatives noted that it was a funding methodology issue and this would be noted in the minutes. It was possible that a joint approach would have to be made to the SFA with RSM UK. Noted (7.6): that the College had pointed out the issue during planning for the audit. Noted (7.7): RSM UK had not raised the issue during the audit. Noted (7.8): that RSM UK may not sign off the accounts without a written funding agreement or they would modify their management letter. Noted (7.9): that the Finance Director had run tests to see how the issue would affect the accounts. If the College had to re-state it would still meet the bank 3 Finance Committee minutes F/Oct23/M covenant but there would be a cash flow problem.

8 Property valuation Received: a copy of the valuation of Stoke House performed by Savills Noted (8.1): that initially the report had not shown all options but that they had now been incorporated. Noted (8.2): that if the property were to be sold for residential development with consent it could raise £1.5-1.9m. Noted (8.3): that there was no guarantee of protected funds for the Specialist Designate Institutions (SDIs) in 2016/17 and beyond, although the SDIs continued to lobby for more funding. Should this be unsuccessful and the College needed a large cash injection, this could be realised by the sale of Stoke House. Noted (8.4): that Committee members were worried that it would be premature to suggest selling Stoke House at this stage. It was suggested that were the College to send the report out to Headington residents it could raise money from them to avoid a sale. Noted (8.5): the Principal’s concern that the College would not be able to raise the cash to pay its commitments if there were a clawback from the SFA and the College entered 2016/17 with a reduction of £1m in its funding. Noted (8.6): that the long term survival of the College needed to be discussed, including its assets. Noted (8.7): that the long term plan was to make HE work viable. Work had been started in the Curriculum Review to make income cover total expenditure, and the College wanted to introduce new self-sufficient courses that would deal with the shrinking FE budget as efficiently as possible. Noted (8.8): Committee concerns that a sale would provide only a short to medium term solution. Noted (8.9): that the Principal pointed out that Area Reviews would halve the number of colleges over the next five years. It was not known when the area review for Oxfordshire would occur. Devolution was also an issue. A devolved SFA budget would mean that the College would have to go to Oxfordshire County Council for funds. There were huge threats to colleges that did not do enough quickly enough. Noted (8.10): that if the SFA were to clawback or severely reduce funds the sale of Stoke House could be an emergency solution. Noted (8.11): that the Finance Committee asked for the Recovery Plan to be developed into a long term strategy showing all options and long-term threats that could be discussed at the Finance Committee in February. Noted (8.12): that the Chair could be available to help with this if needed.

9 Recovery Plan Action Plan Received: an update on the Recovery Plan Action Plan Noted (9.1): that the most recent meeting with the SFA had been good and that they were happy that the College was making progress against the plan. The SFA would no longer require action plan updates to monitor this plan. They were more interested in the financial performance indicators, which would be discussed at the next meeting in February. Noted (9.2): that the College was still under a ‘notice of concern’ until the February after the year in which the College’s financial health was deemed ‘satisfactory’.

10 Development activity Received: a verbal report on development activity and a structure for this

4 F/Oct23/M activity. Noted: that a Development Committee will be formed, this will include members from the Finance Committee and Governing Executive.

11 SORP Received: a verbal report on the FE & HE SORP for 2015/16 Noted (11.1): that this will change next year and has implications for the format of the accounts. Noted (11.2): that the changes came from international financial reporting standards that were cascaded down to the UK charity and public sectors.

12.45 Hannah Jones joined the meeting

12 Marketing strategy Received: a presentation on marketing strategy and activity within the College. The Academic Registrar presented a paper on marketing strategy and activity. Noted (12.1): that the prospectus for 2016 was being mailed out. The photographs had been made more relevant. Noted (12.2): the suggestion to captioning the photographs. Noted (12.3): that the new Short Course brochure for the autumn term was an open-fold brochure, the style of which was appreciated by the College’s partners. Noted (12.4): that the College brand followed through all the material and that more photo shoots with students were to take place as the same students often appeared in the photographs. Noted (12.5): that new memorabilia had been produced. Noted (12.6): that the College had advertised in local community newspapers, which cover a large area. Noted (12.7): that the College could contact housing associations that send material out to residents and link with them. The College had contacts with Green Square. Noted (12.8): the College will employ an external marketing consultant, initially to help improve national marketing, and, in the long term, to increase the overseas marketing. Noted (12.9): that the committee thought that the website could still improve and that there was still scope for development of the Facebook pages. Noted (12.10): that at the end of phase 1 of the consultant’s work, the College would look at what had been effective, including the use of social media and the use of influencers/advocates. Staff may also be involved in raising the profile of the College via positive appearances in the media. Noted (12.11): that the consultant would be paid on a daily basis for work completed and that the brief would be discussed by the management team. Noted (12.12): the Chair’s opinion that the paper did not form a strategy and that it was very general. More detail and focus was needed. Noted (12.13): that background work was needed before a strategy could be decided upon. Noted (12.14): that the College needed to be able to see where marketing money as spent, and what results were gained, in order to determine where to spend money in future. As all educational institutions were vying for the same people, a marketing strategy needed to be honed and give a clear, consistent and repetitive message. Noted (12.15): The consultants were clear about the message and the difference between the HE and FE offer. Phase 1 would feed into the marketing strategy. 5 Finance Committee minutes F/Oct23/M Noted (12.16): that the College should focus on their unique selling point in each area. The purpose of a strategy was to focus on what needed to be done. It needed structure and to be measurable. The Chair thanked the Academic Registrar for the progress made.

STANDING ITEMS

Noted: Meeting dates for 2015/16  5th February 2016  29th April 2016  17th June 2016

There being no further business the meeting closed at 12.20pm

Signed by the Chair of the meeting succeeding that to which these minutes pertain

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