THE SIXTH FORM COLLEGE FARNBOROUGH
MINUTES OF THE POLICY AND RESOURCES COMMITTEE
MONDAY 23 NOVEMBER 2009
The meeting opened at 5.05 p.m.
P 09/41 Apologies
Andrew Annette
Members Present
William Bagnall (Chair), James Bacon, Linda Montgomery, Andrew Needham, Jack Nixon, Gregory Trigg, John Guy OBE
Clerk
Richard Compton
In Attendance
Simon Jarvis, Gordon Dodds, Catherine Cole (to agenda item P 09/49).
P 09/42 Minutes of 30 September 2009 meeting
The minutes were agreed and signed by the Chair.
P 09/43 Matters Arising
(a) Approvals by the Corporation, 12 October 2009
(i) Three year financial forecasts, 2009/12 P 09/35
(ii) August and September 2009 finance and management reports P 09/37(a)
(b) 2009 pay settlements - delegation arrangements P 09/37(b)
Dr. Guy reported that the support staff settlement had been ratified and that the teaching staff settlement should be agreed shortly.
P 09/44 Chair’s Business
(a) Association of Colleges conference, Birmingham, November 2009
The Chair and Dr. Guy reported on a successful conference. It had provided good opportunities for networking and valuable breakout sessions.
Speakers had included representatives from Ofsted, MORI and the LSC, and Barbara Cassani from ‘Go’ airline. A particular theme was greater efficiency through simplified procedures. The political cast had included Nick Clegg, David Willetts and Lord Mandelson, and the ill-prepared Iain Wright.
There was an interim feel to the proceedings due partly to the forthcoming General Election. Severe concern remained about the lowering financial scenario and the impact of successive changes in the Machinery of Government.
(b) Collaboration with Farnborough College of Technology (FCOT)
The Committee received the Principal of FCOT’s 2 November letter to Dr. Guy about greater collaboration between the two colleges. She had suggested moving the two institutions into a single business entity, retaining the two distinctive brands (sic) as separate trading operations so that the public would see no change; and creating a management structure to include the part time role of an Executive Chair.
The following points were made during a full discussion:
(i) the College had a distinctive ethos and mission which could be diluted by organizational overlap or merger;
(ii) there was no evidence that the College itself would benefit, and both colleges could maintain their distinctive identities within the wider community;
(iii) the College was prudentially and efficiently run and economies of scale were unlikely;
(iv) organizational change would be particularly undesirable during a period of continuing external turbulence and at a time that a new Principal was being recruited;
(v) co-operation with FCOT has been, however, been very productive and should continue.
Summing up the discussion, the Chair said that there was a very strong consensus that the College should preserve its full independence, particularly at a time that it would be designating under the new statutory system, and that the Corporation should be advised accordingly.
DECISION
The Committee asked the Chair to advise the Corporation of its conclusions at the 7 December meeting.
P 09/45 Designation as a Sixth Form College Corporation
(a) Designation
The Committee had received:
(i) a letter from the Department of Children, Schools and Families inviting the College to be designated as a new legal entity, a sixth form college corporation. The Apprenticeships, Skills, Children and Learning Act had received Royal Assent on 12 May 2009
(ii) a position paper on designation from the Sixth form Colleges Forum
(iii) an agreed protocol between the Local Government Association and the Sixth Form Colleges Forum
Dr. Guy confirmed that the Secretary of State, DCSF, had been accorded a single use power to make designations of colleges by Order in February 2010. All existing sixth from colleges could designate if they so wished. The College would retain its incorporated and charitable stratus and designation should have relatively little impact on its mission and activities.
The Principalship’s strong recommendation was that the College should designate. The Chair proposed that the Committee advise the Corporation accordingly.
DECISION
The Committee recommended to the Corporation that the College formally designate as a sixth form College Corporation under the recently-enacted legislation.
(b) Corporate documents for 2010/11
The Clerk confirmed DCSF advice that the designation order would provide for the continuation of the College body corporate and of the Instrument and Articles of Government.
He would review the new DCSF documentation and associated guidance, and then propose any amendments required to the College’s existing suite of corporate documents, the combined Corporation and Committee Standing Orders and the Committee Terms of Reference.
DECISON
The Committee commissioned the Clerk to bring forward proposals, if necessary, for revision of the College's corporate documents for the new regime, after the new DCSF documents and guidance had been received and assessed.
P 09/46 Machinery of Government Changes
(a) Situation
Dr. Guy confirmed that the turbulence had not abated and that the forthcoming General Election would create another area of uncertainty. It was intended that the LSC would cease to exist on 31 March 2010, but it would be responsible for 2010/11 funding. Dr. Guy would be attending a meeting with the LSC on 7 December.
The Young People's Learning Agency would take over responsibility from 1 April 2010. 2010/11 funding for sixth from colleges would be franked by the host authorities but there was uncertainty over any future discretion that might be accorded to LAs to allocate YPLA funding between institutions by 2012/13.
(b) Correspondence with Hampshire County Council
The Committee received a letter sent by the Principal to the Director of Children’s Services at Hampshire County Council concerning a vulnerable student, and noted Catherine Cole’s proactive involvement in the matter.
P 09/47 Financial Health Forecasts and Implications
(a) LSC Assessments
The Committee received the LSC’s 26 October letter reviewing the financial health gradings for the College, the assessments for 2008/09 and 2009/10 being ‘Good’, and those for 2010/11 and 2011/12 ‘Outstanding.’
Gordon Dodds commented that the gradings for 2008/09 and 2009/10 were affected by technical complications in the calculation of the current ratios at the end of the financial year, which had been the subject of tortuous negotiations with the LSC. The LSC did not moderate the grading in the light of the overdraft facility, as had been earlier agreed.
The Committee expressed severe disappointment at the LSC’s unwillingness to moderate the current ratio scoring, which it considered to be a penalty for prudence, although it acknowledged the comment by the LSC that the strength of the College’s finances was reflected in the Outstanding grade for financial management and control.
(b) Revised cashflow forecast to 2014
Dr, Guy and Gordon Dodds commented on the tabled Strategic Cashflow to 2014, revised on 23 November.
The forecast had been based on the possibility of reduced funding; in particular, no inflation increase in LSC/YPLA funding from 2011 onwards while staff costs would increase by 4% p.a. A further assumption was that the bank loan for Phase 6 would be cleared in January 2010. At this stage, no costs had been removed from the expenditure line.
These pessimistic assumptions, which would probably be unsupportable by institutions with a weaker financial base, could lead to the end of year surplus becoming a deficit of £1 million in 2014. The Principal and Deputy Principal would produce a modified forecast for the Corporation meeting in December.
The Committee considered the implications of paying off the bank loan in January 2010. It noted that the overdraft facility would remain as cover. The inflation assumptions might be unduly severe. The College could now, with successive new builds culminating in Phase 6, absorb more funded students. There were various options for significant cost reductions that would not imperil the College’s central mission.
Summing up the discussions of the forecast, the Chair concluded that there should be sufficient future cover for the Committee to recommend to the Corporation that the bank loan could be paid off in January 2010, thus avoiding further interest payments.
DECISION
The Committee recommended to the Corporation that the Phase 6 bank loan could prudentially be paid off in January 2010.
P 09/48 Annual Report and Statutory Accounts, 2008/09
The Committee received and considered the Corporation members’ report accompanying the accounts, the statements of corporate governance and members’ responsibilities, and the 2008/09 accounts which had been considered by the Audit Committee at its 18 November meeting.
The Audit Committee had also commended the External Auditor’s report to the Corporation.
Dr. Guy commented on various features in the Corporation members’ report. After discussion, this was agreed by the Committee with textual amendments to paras. 5.3, 5.4, 11.2, and 16.1. He summarized the statements of corporate governance and internal control, and of members of the Corporation’s responsibilities.
DECISION
The Committee recommended for Corporation approval;
(a) the Corporation members’ report accompanying the accounts;
(b) the statement of corporate governance and internal control;
(c) the statement of responsibilities of members of the Corporation;
(d) the 2008/09 accounts
P 09/49 Other Finance issues
(a) October 2009 finance and management report
Gordon Dodds summarized the contents of the October report including the cashflow implications. There had been no substantive changes.
DECISION
The Committee approved the October finance and management report under delegated authority.
(b) Content of monthly finance and management reports
Gregory Trigg commented on his discussions with Gordon Dodds about reshaping the financial data supplied to Governors in these reports to produce more targeted and possibly less material.
The Clerk commented that, during past Corporation self-assessments, Governors had expressed a preference for the current substantial suite of documents rather have the material pre-filleted. It would nonetheless be valuable to consider how the material could be condensed and rebalanced.
The Committee welcomed the suggestion and agreed to review the issue at its next meeting.
DECISON
As above.
(c) Local Government Pension Scheme (LGPS)
Gordon Dodds commented seriatim on his analysis (circulated with the agenda) of the Hampshire scheme.
The global recession had inevitably had a significant effect on the value of the fund, although its value was still higher than five years ago and, following signs of a global recovery, there had been a 16% rise in value over the five months to 31 August 2009.
The notional deficit had increased, and the College’s share was £1.7m compared with £920k in the previous year. The changes in names of the top ten holdings reflected the events of the past year (para. 6).
The Committee noted the report on the Hampshire LGPS and thanked Gordon Dodds for his full and incisive analysis.
P 09/50 Artificial Turf Pitch (ATP)
Linda Montgomery commented on the background to the value for money report on a tender from Bowen plc that had been approved by the Principal and herself as the Chair of the Estates Committee.
The report by Cyril Sweett stated that there was a guaranteed maximum price of £549,000; the previous tender had been for £683,000.90. It confirmed that, with Bowen plc’s site set-up already in place, and therefore with a discounted value of the site accommodation, the guaranteed maximum price for the scheme represented a good value for money. The target completion date was 22 March 2010.
The Committee welcomed the value for money report on the ATP.
P 09/51 Risk Management
Simon Jarvis introduced the (tabled) updated Strategic Risk Register
The three highest current risks were all external; inadequate funding of public services in the light of ongoing severe economic difficulties (risk score of 24), further deterioration in revenue funding indicated for 2009/10 (24), and turbulence caused by changes in the Machinery of Government (20).
A new risk was the implications of failure to appoint an outstanding successor as Principal (18). This risk had already been mitigated by the comprehensive and sophisticated approach of the Selection Panel appointed to assess and interview the candidates.
The risk of successive retirements of senior postholders over a relatively short period had been alleviated by the appointment of a new Assistant (now Deputy) Principal Student Services and the ongoing process for the appointment of a new Principal.
DECISION
The Committee commended the updated Strategic Risk Register for Corporation approval.
P 09/52 Any other business
None.
The Chair closed the meeting at 7.35 p.m.