Council Minutes 5 May 2020

Minutes of the Cardiff University extraordinary meeting of Council held on Tuesday 5 May 2020 by Zoom at 14:30.

Present: Professor Stuart Palmer (Chair), Professor Colin Riordan, Professor Rudolf Allemann, Dr Carol Bell, Mr Ricardo Calil, Mr Tomos Evans, Ms Judith Fabian, Professor Dame Janet Finch, Mr Alastair Gibbons, Professor Kim Graham, Mr Michael Hampson, Professor Mary Heimann, Professor Karen Holford, Ms Jan Juillerat, Mr Steven Luke, Ms Lin Phillips, Mr John Shakeshaft, Mr David Simmons, Judge Ray Singh, Dr Janet Wademan, Mrs Agnes Xavier-Phillips, Ms Jackie Yip.

Attendees: Professor Gary Baxter, Mr John Britton, Ms Katy Dale, Mr Thomas Hay, Ms Julia Lofthouse, Mrs Susan Midha, Ms Claire Morgan, Ms Alex Payne, Ms TJ Rawlinson, Ms Karin Russell (Minutes), Mrs Claire Sanders, Professor Damian Walford Davies, Mr Richard Walters and Mr Robert Williams.

Apologies: Mr Paul Baston and Mr Len Richards.

1771 Apologies for absence

The above listed apologies were noted and the meeting was confirmed to have met quorum.

1772 Welcome and preliminaries

The Chair welcomed everyone to the meeting and explained the participation and etiquette of using Zoom.

1773 Declarations of interest

Noted there were no declarations of interest.

1774 Risk Register

Received and considered paper 19/583B, ‘COVID-19 Risk Register’. The Vice-Chancellor was invited to speak to this item.

Noted

1774.1 that the situation was progressing towards a more business as usual phase, with recasting of the leading risks in light of COVID-19;

1774.2 the two leading risks related to the University’s finances and Student Recruitment which were interlinked; mitigating actions had been taken but it was unclear how these risks would develop;

1774.3 in terms of research activity, there was more confidence that this risk could be mitigated as time passed;

1774.4 that in relation to student welfare and wellbeing, mitigating actions could and were being taken;

1774.5 in respect of  teaching and assessment, activity had been shifted online at short notice; however there was now time to be able to plan and assess this activity and review the delivery of teaching for the next session; as such it was felt that the risks in this area could be mitigated;

1774.6 it was confirmed that a taskforce had been established with a view to planning for the re-opening of the campus in September 2020; Welsh Government requirements and guidance would be applied when considering such arrangements;

1774.7 the University was hoping to open its own COVID-19 testing laboratory and were therefore hopeful to be able to screen its own population via this route;

1774.8 work was being undertaken to review disinfection procedures and the requirements for the use of face masks;

1774.9 that there was uncertainty around whether international students would wish to travel if deemed safe to do so; this was further exacerbated by whether restrictions on flights remained in place and affordability should there be a global recession;

1774.10 that if the University managed to recruit 20% of the current figures for international students and 50% home students, this would account for a £100M+ loss;

1774.11 Welsh Government had advised that they did not have the resource to assist Welsh Universities; it was also unclear whether the UK Government would be in a position to provide financial support, or what other measures could be put in place to assist;

1774.12  in general, the University would likely manage in terms of finances this financial year, although this would depend on fee income collected for the third term;

1774.13 in relation to the 2020/21 financial year, financial scenario planning was taking place and an update would be presented to the Policy & Resources Committee on 19th May 2020; there would be a further update to Council at its meeting in July;

1774.14 the Vice-Chancellor stated that there was uncertainty over both IELTS and visa requirements, and these would be taken into account once known;

1774.15 that there may be a requirement to take action before the full effects of COVID-19 are known, to ensure future sustainability;

1774.16 there may also be impacts from the completion of Brexit;

1774.17that if all universities were offering online teaching, the University would need to ensure that it was operating competitively.

1775 Recasting The Way Forward

Received and considered paper 19/581B, ‘Recasting The Way Forward’. The Vice-Chancellor was invited to speak to this item.

Noted

1775.1 the implications of the COVID-19 pandemic required a review of The Way Forward priorities, as progress would be unable to be assessed for some items and there would be constraints on others;

1775.2 accordingly, the Vice-Chancellor had asked owners to reassess and comment on each area of The Way Forward; there would be a wider consultation before agreeing any formal changes, and there was a need to focus on safety and wellbeing of staff and students and the future sustainability of the institution;

1775.3 the Vice-Chancellor confirmed that the University would not cease with efforts towards existing KPIs; they would continue to be monitored and transferred to sub-strategies to allow for a focus on key areas of recovery;

1775.4 in relation to league tables it would be necessary to undertake a piece of work align with the new COVID-19 environment; for example, with respect to the National Student Survey, it was unclear when/if the data would be received going forward; there had been a high response rate for this year’s survey however due to the current circumstances it may not be appropriate to compare the results to those from previous academic years;

1775.5 that the Executive intended to undertake a consultation in respect of The Way Forward throughout May and June, and provide an update to Council at its meeting in July;

1775.6 in relation to the strategic estates plan, the impact on cashflow of these projects had not yet been assessed; however as estimated completion is one or two years’ away, it was expected that conditions may have returned to normal;

1775.7 that it was important that the University did not lose sight of research and the capacity for research which would aid Wales’ economic recovery and that this was centered in Cardiff;

1775.8 that the University’s online provision was broadly in line with competitors; there were also opportunities to develop this provision as a longer term strategy;

1775.9 it was reiterated that bond funding should not be used to support operating losses and that this distinction must be clear going forward;

1775.10 that members of Council supported the proposal to recast The Way Forward in light of the COVID-19 pandemic and looked forward to an update at the July meeting.

1776 COVID-19 impact on Welsh Universities

Received and considered paper 19/580B, ‘COVID-19 impact on Welsh Universities: proposed actions from HEFCW’. The Deputy Vice-Chancellor was invited to speak to this item.

Noted

1776.1 that the key message from HEFCW was that they would employ a light touch approach over the coming months in light of current circumstances;

1776.2 that the paper provided detail of where reporting deadlines, regulatory expectations and audit requirements had been relaxed;

1776.3  Circular ‘W20/11HE - COVID-19 impact on higher education providers: funding, regulation and reporting implications’, released on the 4th May 2020, had been added to the exhibit book for information.

1777 Update on COVID-19 reporting issues

Received a verbal update from the Chief Financial Officer, Robert Williams.

Noted

1777.1 that in terms of finances, HEFCW reporting requirements had not appeared to have been relaxed in the same way as other reporting requirements;

1777.2 that the funding allocation letter from HEFCW was expected in the next few weeks;

1777.3 HEFCW had been understanding of the financial situation resulting from the COVID-19 pandemic, and the Chief Financial Officer has had regular contact with HEFCW.

1778 Update on Cardiff Innovation Campus (CIC) cost increase - Audit Committee discussion

Received and considered paper 19'582B, ‘Draft excerpt from Audit Committee minutes 23.04.2020’.

Noted

1778.1 [Redacted]

1778.2 [Redacted]

1778.3 [Redacted]

1778.4 [Redacted]

1778.5 [Redacted];

1778.6 [Redacted]

1779 External Audit Contract

Received a verbal update from the Chief Financial Officer.

Noted

1779.1 [Redacted]

1779.2 [Redacted]

1779.3 [Redacted]

1779.4 [Redacted]

1779.5 [Redacted]

1780 Revolving credit facility

Received and considered paper 19/584B, ‘Revolving Credit Facility’. The Chief Financial Officer, Robert Williams, was invited to speak to this item.

Noted

1780.1 [Redacted]

1780.2 [Redacted]

1780.3 [Redacted]

1780.4 [Redacted]

1780.5 [Redacted]

1780.6  [Redacted]

1780.7  [Redacted]

Resolved

1780.8 to seek permission from HEFCW to increase the University’s borrowing threshold to accommodate the proposed RCF;

1780.9 to approve the proposal for a £30M three-year RCF with Lloyds Bank, subject to regulatory approval;

1780.10  to delegate authority to the Chief Financial Officer to negotiate and agree the RCF agreement in conjunction with the University’s legal advisers and the Chair of the Investment and Banking Sub-Committee and the Policy and Resources Committee, as appropriate.

1781 Finance update

A verbal report was received from the Chief Financial Officer.

Noted

1781.1 a total of £12M of revenue had been lost from residences, sport and catering operations as a result of the lockdown;

1781.2 there had been costs incurred from supporting COVID-19 activities with NHS Trusts, repatriating staff and students at the start of lockdown, and the provision of remote learning and working for staff and students;

1781.3 there had been savings made due to reduction in travel, recruitment, general expenditure, purchasing and repairs and maintenance;

1781.4 that it was anticipated that the year-end position would be at break even, subject to the levels of fee income received for the third term of the academic year, and that the cash position would likely remain positive
1781.5that the impact of the COVID-19 pandemic would be felt during the 2020/21 academic year, and that a draft budget would be received by the Policy and Resources Committee in May, with a further iteration presented to Council in July for approval;

1781.6 the University was modelling different scenarios based on possible government grant income, learning provision for the 2020/21 academic year and associated tuition fee income levels;

1781.7 that it had been estimated that the reduction in tuition fee income for the 2020/21 academic year could result in a loss of between £120M and £140M, assuming there would be no variation to the £9K tuition fee level;

1781.8 an anticipated reduction of 10%-30% of research income had been modelled, resulting in a loss of approximately £20M-£40M;

1781.9 that the Vice-Chancellor had communicated the financial position and forecast with staff and students, and identified that a 20% reduction in student numbers could equate to a loss of approximately £110M in income, and a year-end deficit of £50M;

1781.10 that the University had asked Schools to review their budgets for 2020/21 with a view to reducing expenditure by 10%, which could save approximately £50M, taking into account respective School sustainability if student numbers fell significantly;

1781.11 the Executive were investigating other sources of funding such as government loan schemes, furlough of staff, divestment of property held, and asset disposal;

1781.12 the situation was constantly evolving and decisions would likely need to be made before the wider impact of the COVID-19 pandemic is known;

1781.13 Council thanked the Vice-Chancellor and members of the University Executive Board for having reduced their salaries to assist during this time.

1782  Any other business

Noted

1782.1 There were no other matters of business.

1783 Date of next meeting

Noted the next meeting was due to take place on 6 July 2020.