Policy and Resources Committee Minutes 19 May 2020

Minutes of the meeting of the Cardiff University Policy and Resources Committee held on Tuesday 19 May 2020 via videoconference at 12:00

Present: Mr Alastair Gibbons (Chair), Professor Colin Riordan, Dr Carol Bell, Mr Tomos Evans, Professor Karen Holford, Ms Jan Juillerat, Dr Steven Luke, Professor Stuart Palmer, Mr John Shakeshaft and Ms Jackie Yip.

Attendees:        Professor Rudolf Allemann, Professor Gary Baxter (part), Mr Dev Biddlecombe, Ms Katy Dale (Minutes), Mr Tom Hay, Ms Rashi Jain, Ms Alison Jarvis, Ms Julia Lofthouse, Ms Sue Midha, Ms Claire Sanders, Professor Damian Walford Davies (part), Mr Richard Walters (Secretary) and Mr Rob Williams.

Apologies:        Professor Kim Graham.

654 Welcome

The Chair welcomed all to the meeting, especially the new Acting University Secretary Ms Rashi Jain and Ms Claire Sanders in her new role as Interim Chief Operating Officer. The Committee agreed to a revised agenda order.

655 Apologies for Absence

Apologies were provided by Professor Kim Graham.

656 Minutes of Previous Meeting

The minutes of the meeting held on 3 March 2020 (paper 19/609) were confirmed as a true and accurate record and signed by the Chair.

657 Matters Arising

There were no matters arising.

658 Declaration of Interests

The Chair reminded the Committee members of their duty to disclose any potential conflicts of interest and asked if there were any declarations. The Students’ Union President and Vice-President for Education declared an interest in relation to agenda item 10 (Students’ Union Financial Agreement).

659 Report from the Vice-Chancellor

Received and considered paper 19/615, ‘Vice-Chancellor’s Report’. The Vice-Chancellor introduced the paper.

Noted

659.1        that the University had commenced planning for how staff and students could return to the campus and had set up a task force, chaired by the Vice-Chancellor, to bring strategic recommendations on this to UEB; there were a number of sub-groups looking at specific areas in detail (e.g. research, timetabling);

659.2        that the task force was initially looking at opening up the campus for research activities and in line with Welsh Government guidelines; this would mean extending the essential items (e.g. residences and maintenance) to include research applications or research projects that would be damaged if left any longer;

659.3        the task force has surveyed buildings, reviewed toilet provision and disinfection regimes, and investigated the provision of face masks to ensure these are in line with necessary social distancing and hygiene requirements;

659.4        a review of the capacity of residences buildings whilst maintain distancing rules has also been carried out;

659.5        that the University was intending for the majority of staff to continue to work from home at present, to limit any possible spread of the virus;

659.6        that the University wished to ensure there is confidence for students and staff before they return to site and were working carefully on communications around this to ensure messages were clear and honest;

659.7        [Redacted]

659.8        that it was uncertain yet what the implication of the revised clearing programme from UCAS would have on student numbers.

660 Finance Report (Financial Management Accounts)

Received and considered paper 19/638B, ‘Finance Report’. Ms Alison Jarvis introduced the paper.

Noted

660.1        that this was the first financial report since the coronavirus pandemic lockdown had been implemented;

660.2        that the majority of the University’s income was achieved through the first part of the financial year, meaning around 80% of income had been received when the lockdown was implemented;

660.3        that the University had waived residences fees for students who had returned home due to coronavirus, resulting in a loss of £10m; this had been offset by the improvement in non-pay figures due to the slowing of business;

660.4        that £10m had been set aside for issues relating to coronavirus;

660.5        that the accounts until the end of April 2020 had been produced and showed an operating surplus;

660.6        that the Finance team were receiving very regular updates on the University’s cash position;

660.7        [Redacted]

660.8        that the finance team had introduced very tight controls on spending, with any purchases over £20,000 requiring sign off from the Deputy Director of Finance and all purchases below this threshold being reviewed by Finance before approval;

660.9        that the Finance team had commenced work on the commentary for the annual accounts and financial statements;

660.10      [Redacted]

1. [Redacted]
2. [Redacted]
3. [Redacted]

660.11      [Redacted]

661 Capital Investment Programme and Business Case Plan

Received and noted paper 19/620B, ‘Capital Investment plan update’. Mr Rob Williams introduced the paper.

Noted

661.1        that the five key projects were continuing to build but at a slower rate due to social distancing;

661.2        that the other approved projects were currently on hold;

661.3        that UEB had agreed all potential projects are suspended and no action taken at the present time;

661.4        that progress and spend for the CIC was being monitored closely; the University had purchased some materials in advance to allow works to commence as soon as distancing restrictions were relaxed; it was expected some spend on this project would move from this financial year into the 2021/22 financial year;

661.5        that the permanent stop for projects on hold referred to in the paper did not mean a forever stop, but for the next 12 months or so as impacts of the situation being clearer;

661.6        that the University were happy that pausing of the fire strategy works did not affect the compliance of the accommodation buildings and it was recommended an update on this project is provided to the Estates & Infrastructure Committee during the autumn term;

661.7        that the University is in regular communication with the contractors for the CIC and CSL projects to ensure updates on cost and delay implications are regularly received;

661.8        that the Estates team were in discussions with legal advisors on any contractual implications and costs due to delayed or cancelled projects.

Resolved

661.9        that it was proposed the decision on further funding for the CIC is brought to a future meeting when there is more certainty on the finances;

661.10      for the Estates & Infrastructure Committee to receive an update on the fire strategy project during the autumn term;

661.11      those projects currently on hold to remain paused.

662 University Budget 2020/21 and Forward Look

Mr Rob Williams introduced the item.

Noted

662.1        that this meeting of the Committee would usually agree the budget for the next financial year; however the financial position was still uncertain whilst the implications of the coronavirus pandemic are further understood and the student numbers for the next academic year are unknown;

662.2 Tuition Fee Scenario Planning

Received and considered paper 19/639B, ‘2020/21 Budget Tuition Fee Scenario Planning’. Ms Alison Jarvis presented the paper.

.1     that tuition fees account for well over 50% of the University’s income;

.2     that there remained uncertainty over the government support provided to universities, the number of students who would accept a place or continue to study at the University for the next academic year, and how these students would be supported and educated;

.3     the University had therefore proposed three scenarios for consideration, with scenario three taken forward for further development (at this stage pending more information) as representing a realistic downside case:

• Scenario 1: that learning would be blended for the first term, and then moved to face-to-face teaching for the second term;
• Scenario 2: that there would be no teaching at all in term one, with the year commencing with face-to-face teaching from the second term;
• Scenario 3: that teaching would mainly be delivered online for the 2020/21 academic year, with a return to face-to-face teaching in the 2021/22 academic year;

.4     that a pessimistic and optimistic position had been developed for each scenario with scenario 3 showing diminution in fee revenue of £138m and £105m respectively; this also assumed no change in the current fee levels for students or any refunds on fees;

.5     that the situation remained very volatile and further scenario planning would be carried out as the situation became clearer;

.6     that 70% of home undergraduate students have now decided whether they will go to university in September, compared to 90% this time last year;

.7     that international students were less receptive to online delivery, and the University was working hard to determine when students could safely return to campus and to communicate this clearly with international students;

.8     that given the investigations into the possibility of providing small group teaching from September, it was felt that scenario three reflects a more pessimistic position and therefore would be a worst case scenario;

.9     that the teams within Schools and the centre were working well together to plan for the future;

.10   that it would be of benefit to plan for the full programme of studies (i.e. beyond just the next academic year) to enable longer term planning;

662.3 Research income forecast

Received and considered paper 19/640B, ‘2020/21 Budget Research Income Forecast’. Ms Alison Jarvis presented the paper.

.1     that the impact on research is slowly becoming known;

.2     that the University had considered a pessimistic outlook of receiving 60% of the 2019 outlook, and an optimistic outlook of 80%;

.3     that there remained confidence in the provisions from the EU, funding bodies and government bodies, but it was becoming apparent that charities, industry and overseas support were now struggling;

.4     that a number of research awards span several years, and it is expected these will continue into next year;

.5 that there is often a delay between grants being award and coming online, creating a lag in being able to see the impact of the coronavirus pandemic on this area; early indications suggest there is a reduction in applications and this is being reviewed by the research community;

.6     that there is a correlation between teaching income and research income, meaning a reduction in teaching may impact on the ability to be able to fund research;

.7     that it is yet to be known whether future funding will continue to provide 20% for overhead recovery; this is being discussed with UKRI, along with how QR will determine funding for research;

.8     that a recent survey of the University’s research staff showed 24% of researchers are unable to undertake any research activity at present and a further 20% are only at a third capacity; there may therefore come a time when salaries for researchers will not be covered by research income.

Resolved

.9     to model for award applications being made now, to present a more accurate picture of future funding;

662.4 Draft Operating Budget 2020/21

Received and considered paper 19/641B, ‘Draft Operating Budget 2020/21’. Mr Rob Williams Introduced the item.

.1     [Redacted]

.2     that there is as yet no confirmation on further funding from Welsh Government for HEs in Wales;

.3     that as well as a loss in tuition fees, a reduction in student numbers would also impact on the income available from other student activities (e.g. residences, sports etc.);

.4     that the University had modelled Scenario 3 showing an optimistic deficit of £102m and a pessimistic deficit of £211m;

.5     that the University would therefore need to make significant efforts to reduce staff costs and had included in the model, an initial reduction of 10%, as already announced publically;

.6     there was no proposal for voluntary or compulsory redundancy at this stage and this reduction was proposed to be made through a freeze in pay and reduction of agency staff and short time contracts; the University wanted to ensure all changes were fair and consistent;

.7     that discussions were being held with Colleges and Schools regarding achieving savings of around 20% for non-pay costs;

.8     that current planning had only been for the 2020/21 budget but work had started on the 2021/22 budget and would be included in the next iteration;

.9     that there were opportunities to be more aggressive within the other operating expenses and these were being examined in more detail as the situation became clearer;

.10   that there would be a lag before the impact to reduce staff costs was seen and there may therefore be a need to aim for a higher reduction rate; however, there was also a large number of variables within the possible income stream, especially in relation to tuition fees;

.11   that there remained work to be done in examining this at a school level;

662.5 Cashflow Forecast to 31/07/2021

Received and considered paper 19/642B, ‘Cashflow Forecast’.

.1     that the inflows and outflows of cash had been mapped to provide a net outflow figure; this showed the need for the University to take action now due to significant pressure on its liquidity;

.2     that the balances provided in the Appendix related to the end of month figures, which present the worse position due to payroll taking place on the last working day of each month;

.3     that there were four key areas where the University could look to address this issue:

• i.       to increase income levels through grants, an increase in student numbers and an increase in research income; however, a 10% increase in income figures would only provide an additional £17m and so is not enough for long term sustainability;
• ii.       to save on costs for capital construction projects by delaying certain aspects of work;
• iii.       to dispose of assets, although the current situation did not present an ideal market for this;
• iv.       to borrow further to be able to manage through this short period of readjustment;

.4     that the cashflow should cover the next two years, given the likely long-term impacts of the current situation;

.5     that the Revolving Credit Facility (RCF) should either be removed from the cash flow forecast, or if included, then repaid fully in July 2021 as it purpose is to cover seasonal fluctuations in working capital rather than long term funding needs;

.6     that £35m had been set aside for the Bond Repayment Fund (BRF) and therefore needs to be protected, and clearly distinguished from the generally available cash/investment reserves;

.7     that the University was discussing this situation with the auditors and the Audit committee;

.8     that the paper was intended to show the severity of the situation and the University was intending to take action now and in the future to ensure sustainability and avoid depletion of all reserves;

.9     that the severity of this issue clearly showed the need for further savings in the cost base in the event the forecast income levels were realised;

.10   that work was being undertaken to look for possible areas of the estate that could be mothballed or released to ensure information is available should this route be progressed further.

Resolved

.11   for the next iteration to include, inter-alia, cash flow for the next two years and clear adjustments for the RCF and BRF;

.12   for target figures to be included if a figure is unknown, to present a consistent view of figures and actions planned;

.13   for the Chair of Council, Vice-Chancellor and Chief Financial Officer to discuss the situation before the Chair of Council’s meeting with HEFCW later this week.

663 Students’ Union Financial Agreement Annual Review

Received and noted paper 19/617B, ‘SU Financial Agreement Annual Review’. Mr Rob Williams introduced the paper.

Noted

663.1        that no changes were proposed to the Financial Agreement this year;

663.2        that the Students’ Union Block Grant submission would come to the next meeting of the Committee and it was noted that matching the percentage cut to the savings of the University, would have a greater impact on the Students’ Union.

664 2021/22 Tuition Fee Levels

Received and noted paper 19/618B, ‘2021/22 Tuition Fee Levels’. Professor Rudolf Allemann introduced the paper.

Noted

664.1        that this paper was brought to the Committee annually;

664.2        that the University was only able to set tuition fees for international and postgraduate students and in light of the current situation, it had been proposed to maintain these as per 2020/21 levels;

664.3        that this had been approved by UEB.

Resolved

664.4        to recommend to Council approval of the fee levels set in the paper.

665 Annual Report on Joint Ventures

Received and noted paper 19/619B, ‘Annual Report on Joint Ventures’. Mr Rob Williams introduced the paper.

Noted

665.1        that the Committee received this report annually, mainly to provide an opportunity to review the governance arrangements;

665.2        that the Cardiff Medi Centre venture was performing very well and had provided some good lessons learnt for the SPARC building;

665.3        that High Performance Computing Wales Ltd was currently being wound down;

665.4        that the Compound Semiconductor Centre (CSC) had managed well through the coronavirus crisis so far and had been very successful in securing external grants; the shareholder agreement had been discussed and it had been agreed that any future funding for the venture was likely to come from IQE;

665.5        that the CSC venture was on track to deliver the forecasts for the year, in line with the impairment figures previously shared; IQE had impaired the remainder of their investment.

666  Report from the Investment and Banking Sub-Committee

Received and considered paper 19/610B, ‘Report from Chair of Investment and Banking Sub-Committee’. Dr Carol Bell introduced the paper.

Noted

666.1        that discussions around the USS pension scheme had been removed from the agenda at the Chair’s request as there was no update to be provided to the Committee.

Resolved

666.2        to approve the changes to the Treasury Management Practices as detailed in the paper.

667 UEB Decisions Made Under Delegated Authority

Received and noted paper 19/611B, ‘UEB Delegated authority’.

668 Llanrumney Business Case

Received and considered paper 19/614B, ‘Llanrumney Business Case’. The Chief Financial Officer introduced the paper.

Noted

668.1        that the key areas for sport on campus were the fields at Talybont (mainly used for hockey), the fitness centre and studio on Park Place, and the Llanrumney site;

668.2        that the fields on the Llanrumney site were often flooded and thus unable to be used in the winter months;

668.3        that it was proposed to sign an agreement with Cardiff Council and Cardiff City Football Club, with the Council providing 8 acres and one all-weather pitch and the Football Club leasing 16 acres and making 5 pitches available to the University and constructing two all weather pitches;

668.4        the University would therefore move from having one all-weather pitch to four;

668.5        that there was no financial input required from the University at this time;

668.6        that Estates and Infrastructure Sub-Committee had reviewed the paper via correspondence and had the following points:

1. that there was no overarching sports strategy available to analyse this proposal against others;
2. that there was limited detail provided on the other options presented, providing limited opportunity for comparison;
3. that a detailed cost plan of income, expenditure and maintenance costs would assist with ensuring costs implications have been accurately assessed;
4. that there is no property assessment to determine the value of the pitches at the current time and following completion of the project;
5. it is unclear whether savings benefit the University or the student body;
6. there is no detail on whether planning advice has been sought to determine risk level;
7. it would be of benefit to model the expenditure within each of the phases to show how these impact on each other;
8. that it would be of benefit to provide detail of the other facilities for analysis of the finances to be more accurate;
9. to determine whether the hockey pitch upgrade could be included within the agreement to offer economy of scale and avoid impacting on the facilities when the pitch is constructed in 2023.

Resolved

668.7        that the project was supported in principle by the Committee;

668.8        for the Chief Financial Officer and the Estate team to work with Estates and Infrastructure Sub-Committee on the above points before signing of the Memorandum of Agreement.

669 HR Dashboard

Received and considered paper 19/612B, ‘HR Dashboard’. Ms Sue Midha introduced the paper.

Noted

669.1        that this paper contained data cut from 31st January and therefore did not reflect the impact of the coronavirus pandemic;

669.2        that the team were reviewing the submission of this paper for meetings in the next academic year to ensure the data was as up to date as possible;

669.3        that the data showed good progress towards achieving the KPI relating to international staff;

669.4        that there had been reshaping of the FTE profile;

669.5        that headcount had increased and this was partially due to the movement of English Language Programme tutors from casual workers onto full time contracts;

669.6        that turnover had now increased to 13%;

669.7        that the establishment report provided better detail on the changes to headcount and reduction in this was being looked at as part of the implications of the coronavirus pandemic.

670 Staff Survey Results

Received and considered paper 19/613B, ‘Staff Survey Results’. Professor Karen Holford introduced the paper.

Noted

670.1        that the paper provided an update on work undertaken following the results of the staff survey;

670.2        that three key areas for action had been identified, with workstreams on more detailed areas feeding into these:

1. senior leadership visibility and transparency (led by the Vice-Chancellor);
2. culture and engagement (led by Sue Midha);
3. internal communications (led by Claire Sanders);

670.3        that there had already been some improvements on internal communications during the coronavirus pandemic and the team were reviewing the best ways to communicate with staff;

670.4        that it was intended to include communications on this with communications on the recasting of the Way Forward and Transforming Cardiff, to avoid burdening staff with information;

670.5        that the Business School were reviewing the data for benchmarking and to identify areas of best practice.

Resolved

670.6        to review whether the deputation from Cardiff Professors on this topic to Council was still requested.

671 Pay Review

Ms Sue Midha provided an oral update on this item.

671.1        [Redacted]

671.2        that the Vice-Chancellor and Chief Financial Officer have made clear the situation in regards to this year’s review;

671.3         that the pay round for this year had been paused.

672  Any Other Business

Noted

672.1        the IT provision of the University was able to provide for teaching and working from home but there remained a dependency on students' infrastructure to access teaching;

672.2        that a further meeting of the Committee would be held at the end of June to receive the Students’ Union Block Grant and provide an update on the budget position.