Court Minutes 1 December 2021
Confirmed minutes of the meeting of the University Court held at 3.00pm on 1 December 2021 by video conference.
|Court Members||Court Members|
Pamela Woodburn (Chair)
Elaine Acaster OBE
Professor Richard Butt (Mins 20 excepted)
Sir Paul Grice (Mins 20 excepted)
Professor John Harper
Dr Arturo Langa
Dr Andrew Scott
|In Attendance||In Attendance|
Head of Planning
Director of Operations and Finance
University Secretary (Secretary)
Assistant Secretary, Governance and Quality Enhancement (Minute Secretary)
Head of Finance
Director of Campus and Commercial Services
Professor David Stevenson
Dean, Arts, Social Sciences and Management
Welcome and Membership
The Chair welcomed members to the meeting of the University Court, which was being conducted virtually due to restrictions in place during the coronavirus emergency. As advised to members previously, the Office of the Scottish Charity Regulator provided for charities holding their meetings in this way, including where the governing document is silent on the matter. In line with good governance, Court discussion and decisions would be recorded in the usual form of confirmed minutes, approved by members.
A particular welcome was extended to newly appointed member, Amy Cutt. Apologies were noted for Dr Maria Giatsi-Clausen, Frank Lennon OBE, Dr Eurig Scandrett, and Sarah Phillips.
Conflicts of Interest
There were no conflicts of interest declared.
Determination of other Competent Business
There was no other Competent Business identified.
Minutes of the Previous Meeting
Meeting held on 29 September 2021
The unconfirmed minutes of the Court meeting held on 29 September 2021 (COURT (21) MINS 05) were APPROVED as an accurate record. The Chair extended thanks to Elaine Acaster for acting as Chair in her absence.
There were no matters arising.
The Chair reported on her recent participation in QMU events, including the November Community (stakeholder) Forum and the recent Fireside Chat between Dame Prue Leith, Chancellor and Carolyn Currie, QMU’s Entrepreneur in Residence. She had also taken the opportunity to meet with the Principal, Deans, and other QMU staff to learn more about the University. She looked forward to continuing her engagement with the University community in the New Year and extended her thanks to colleagues for their very warm and supportive welcome.
The Chair reported also on her on her attendance at the most recent meeting of the Committee of Scottish Chairs (CSC) Jamie Hepburn for higher Education and Further Education, Youth Employment and Training, had attended the meeting,and the Chairs had welcomed the opportunity to cover a range of matters with him. The following items from the meeting were likely to be of particular interest to Court members:
- Scottish Funding Council(SFC) Review of Coherent Provision and Sustainability: The Scottish Government had responded recently to the recommendations contained in the SFC Review Report, stating that they 'welcome and broadly accept the review recommendations', and 'are content for SFC to explore options for a single quality assurance and enhancement framework for tertiary education'.
- International Education Strategy: The Scottish Government had published its ‘Programme for Government’ earlier in September 2021, with Scotland’s recovery from the pandemic as the main focus. Within the Programme there was provision for a new International Education Strategy, due to be published in June 2022.
Other matters covered at the meeting included the sector’s ongoing response to Covid- 19, the 2021 UK Budget and Spending Review, the review of the Scottish Code of Good HE Governance, the University and College Union (UCU) strike ballot, and the development of widening access indicators beyond that of home postcode.
The Principal provided a report on recent developments, covering matters as noted below. Matters relating to the University’s financial position and the land development project were covered separately on the agenda (Minutes 7, 8, 9 and 11 below refer).
Reflections on semester one
The Principal paid tribute once more to staff and students for their outstanding achievements and flexibility during the past year. He wished to acknowledge also the exceptional support provided by the Scottish Government to the sector in response to the pandemic, reporting that there had been extensive opportunities for engagement with Ministers. The return to campus in semester one was identified as a particular highlight of the past year. Other more recent highlights included the Fireside Chat between Dame Prue Leith, Chancellor and Carolyn Currie, QMU’s Entrepreneur in Residence, as mentioned earlier in the Chair’s report (minute 5 refers), and a recent online conversation about the historical figure Queen Margaret as part of the QMU celebrations around Saint Margaret’s Day.
Planning for semester two
The emergence of the Omicron variant of the coronavirus was being kept under close review in the run up to semester two. At this stage, it was not expected that there would be further restrictions affecting the student experience, beyond travel and quarantine requirements. As such, it was planned to continue with the blended learning model in semester two. However, should it become necessary to revert to online provision, contingency plans were in place. The Principal advised that plans were also in place to support students remaining on campus over the festive closure period.
The Principal provided a further update on staff wellbeing initiatives. A University-wide stress risk assessment had been conducted, and was available to all staff. The stress risk assessment would inform the staff Wellbeing Strategy, which was being developed for publication in 2022. In recognition of the exceptional pressures on staff during the pandemic, the Senior Leadership Team had agreed a number of additional wellbeing days for all staff, the next of which was scheduled just prior to the festive closure period (Thursday, 23 December). Members were advised that strike action was scheduled from 1-3 December 2021, following a University and College Union (UCU) ballot. The strike action would be followed by action short of strike. At this stage, it was too early to gauge the impact of the action on the student experience.
Scottish Funding Council (SFC) Review of Coherent Provision and Sustainability
The Chair had reported previously on this item (minute 5 refers). The Principal added some further reflections, noting in particular that the recommendations from the Review were closely aligned with QMU ambitions for widening participation and collaboration. More generally, he considered that appetite for collaboration was a particularly strong feature of Scottish tertiary education, and this would be conducive to positive engagement with the recommendations. The Review also had a strong focus on skills development for employability. Again, this aligned with current University activity, most recently the development of micro-credentials. The Scottish Government had broadly welcomed the recommendations within the review, including those relating to digital investment, sustainability, enterprise and innovation and research.
The Principal reiterated the position advised at previous meetings of the Court, namely that it would be important to retain the distinctiveness of individual FE and HE providers, noting also that the funding position remained challenging and this would influence the extent to which the sectors could influence positive change.
The planned development of a single quality framework for tertiary education had been subject to particular discussion, and presented some cause for concern across both sectors. The Principal welcomed the response from the Scottish Government to this particular recommendation, in that the Scottish Government acknowledged the strengths of the current arrangements. Members were advised that the Scottish Quality Enhancement Framework for Higher Education was well-established, having first been introduced in 2002 with a particular focus on improving the student experience. Noting that there was an ongoing review of the SQA, members queried whether this would influence the timeline for the development of the single quality framework. It was not expected that this would be the case, however.
Members would have the opportunity at the Court Strategy Day in February 2022 to reflect further on the Review and other external developments, including the Scottish Government’s ‘Programme for Government’, which had been reported on at the previous Court meeting, and the outcomes from the recent COP26 in Glasgow. The Principal committed to continue to provide written updates between meetings to keep members updated on internal and external developments.
Strategic Report and Financial Statements
The Director of Operations and Finance provided an overview of the Strategic Report and Financial Statements for the year ended 31 July 2021. (COURT (21) 32). A number of supporting papers were provided as follows:
- The Letter of Representations to Ernst and Young (COURT (21) 33).
- A letter of variation to the Loan Facility Agreement with Barclays Bank PLC (COURT (21) 34).
- The external audit report from Ernst and Young (COURT (21) 35).
- The annual internal audit report from Azets (COURT (21) 36).
- The Annual Report of the Finance and Estates Committee (COURT (21) 37).
- The Annual Report of the Audit and Risk Committee (COURT (21) 38).
Introducing the papers, the Director of Operations and Finance advised that the audit was complete, subject to final partner review, receipt of the management representations letter and review of any events taking place between the Court meeting and the date of signing the audit report.
An updated version of the accounts had been circulated on 30 November 2021. This showed SAAS hardship funds in the balance sheet, matched by an increase in deferred income. Ernst and Young had also issued an updated audit results report.
The year-end accounts showed an underlying surplus of just under £1m, this being an improvement of £160k from the quarter 4 forecast. An explanation of the movements was provided to Court members in Annex A. Ernst and Young had identified a further adjustment on 30 November 2021 relating to deferral of income, but this fell below the materiality threshold and was noted as an unadjusted difference.
As set out in Annex C, the University had complied with all bank covenants and would have complied also with the pre-Covid original covenants in place before the relaxation granted by Barclays. ‘Below the line’ movements on pension provisions and revaluation loss on buildings were noted, neither of which represented a cash movement. The accounts confirmed overall positive reserves of £73.7 million with a surplus of £10.7million (compared to a deficit of £9.7million in 2020). Unrestricted cash balances had increased by £6.5 million during the year. The QMU Enterprises Ltd Board had met on Monday and approved the accounts for that company.
Members were advised that, as in the previous year, the Court required to form an opinion on whether the University should prepare its accounts on a going concern basis. Members were provided with the definition of a going concern and the assumptions underlying the current forecast, which were set out in Annex B.
As previously indicated, Barclays had agreed a relaxation of the operational leverage covenant at 31 July 2022, and Court was asked to approve the acceptance letter of variation ((COURT (21) 34). Three further scenarios had been considered in which adverse sensitivities were applied to the base forecast, and possible mitigating actions then modelled for each scenario. All scenarios, after taking reasonable mitigating actions, indicated that the University could continue in operation for the period through to 31 July 2023, whilst maintaining a minimum £5m cash balance and meeting the other Barclays bank covenants. In addition to the consideration of scenarios, the rolling five-year review of KPIs indicated that EBITDA and the cash indicators were above the long-term average target.
Based on this analysis, Court was invited to agree the Management Assessment of Going Concern, as set out in Appendix A.
Members were reminded of the Court’s responsibility for the Review of the University’s internal controls. The internal audit annual report (COURT (21) 36) included an opinion that the University’s framework of controls ‘provides reasonable assurance regarding the organisation’s governance framework, internal controls, effective and efficientachievement of objectives and the management of key risks’, this being the highest level of assurance possible. The external audit annual report (COURT (21) 35) included an assessment of the control environment with just one low rated observation around review of fully deprecated assets. The annual report from the Audit and Risk Committee (COURT (21) 38) noted that the Committee’s assessment that ‘the University’s systems provide a reasonable basis for maintaining control and for ensuring the achievement of economy, efficiency and effectiveness, subject to the satisfactory implementation of the recommendations of the internal auditors within a reasonable timescale’. It was noted further that the accounting policies were the same as those in place last year and continued to be considered appropriate.
As a standard part of their audit procedures, Ernst and Young sought management representations from the Court. An updated letter circulated on 23 November 2021, and a signed ’back to back’ letter from the Principal and Director of Finance and Corporate Strategic Development had been lodged with the Chair and the Secretary.
The Chair thanked the Director of Finance and Corporate Strategic Development for the comprehensive overview and detailed set of papers. Court took the following actions, proposed by Ken McGarrity and seconded by Robert Pattullo:
- Court APPROVED the Barclays’ letter of covenant variation and authorised the University Secretary and Director of Finance and Corporate Strategic Development to sign the letter.
- Court endorsed the accounting policies used in preparing the financial statements
- Court determined that it was appropriate for the financial statements to be prepared on a going concern basis and agreed the Management Assessment of Going Concern (App A).
- Court AGREED that the University has in place an appropriate system of internal controls.
- Court APPROVED the letter of representations to be sent to Ernst and Young and authorised the Chair to sign on behalf of Court.
- Court APPROVED the Strategic Report and Financial Statements for the year ended 31 July 2021, and authorised the Chair and the Principal to sign these.
It was requested that, for a future meeting, a historical statement be provided for the previous five years to aid members’ understanding of the adjustments associated with re-evaluation of assets and movements in pension provision.
Financial & KPI Update
KPI Out Turn 2020-21
Court RECEIVED an update on the KPI Outturn for 2020-21 (COURT (21) 39). Introducing the paper, the Head of Planning advised that the commentary focused primarily on information that had not been available at the time of the 2020-21 quarter four report, or had been updated since then. The main updates from the report were as listed below:
- The percentage of applications from SIMD20 postcodes during 2020-21 for entry in 2021-22 was 15.5%. Figures on conversion of application to intake were being finalised. Early indications were that SIMD20 percentage intake was below target, but increased from 2020-21.
- The retention figure for all undergraduate students was just below the 93% target.
- SIMD20 student retention was 89.7% (2% below target), and retention of students from BAME backgrounds was 93% (1% above target).
- The NSS results showed QMU with an overall satisfaction score of 79%. Whilst down from the previous year, this was significantly above the benchmark of 73% and placed QMU third out of the modern universities in Scotland.
- Whilst not directly comparing like with like due to the change of status of EU students, the 2020-21 application figures showed the change in patterns from the baseline from the previous year. As expected, the number of applications from EU Students in 2021-22 had dropped significantly
- The outturn overall surplus figure of £0.98M represented a significant improvement compared to target at the start of the year.
Quarter One Report
Court RECEIVED an update on the Key Performance Indicators for the three months to 31 October 2021. (COURT (21) 40).
Introducing the report, the Head of Planning advised that, at this point in the cycle, much of the KPI data was either unavailable or highly indicative. The key indicator available was student numbers. Undergraduate student numbers were slightly below target for home fee students, but the potential shortfall in fee income was likely to be offset by strong RUK (including new students from the Republic of Ireland) and international numbers. Postgraduate numbers would be finalised following the January intake. Whilst the January intake appeared healthy, based on the September intake and current projections, there was a risk of falling short of the target on postgraduate numbers (by around 5%). The situation, along with the fee impact, would be clearer at quarter two. Initial calculations indicated that, overall, SFC funded places would be filled.
COURT RECEIVED a report on the financial position for the three months to 31 October 2021, and on the 2021/22 financial position. (COURT (21) 41).
At this early stage in the financial year, the main purpose of the report was to bring to members’ attention any matters with potential to impact significantly on the forecast outturn for the year. No significant issues had been identified, although tuition fee levels were being kept under review, particularly in relation to January 2022 postgraduate intakes. A fuller report would be provided at Quarter two, once there was a clearer indication about semester 2 recruitment.
Five Year Financial Strategy
Court RECEIVED an update on development of a five-year Financial Strategy (COURT (21) 42).
The paper provided an update on the Senior Leadership Team’s (SLT) initial thoughts around the development of the Strategy, which would be subject to further detailed consideration as part of the SLT Strategy Day in January 2022 in preparation for the Court Strategy Day in February 2022.
The Strategy included six underpinning principles and suggested outcomes. Key areas addressed were as follows: running and maintaining current functions, including maintaining current productive capacity; developing new or enhanced functions; and investment to support development and growth.
Particular progress was highlighted in relation to seeking a partner to develop the University’s online offering, and in relation to developing further international teaching partnerships. These activities focused on expanding areas, where there was evidence of demand and where QMU also had a strong track record.
The plans for the five year Strategy recognised also the increasing importance of commercial activity, some of which would be facilitated by the development of the Edinburgh Innovation Park and Hub. Whilst it was important to operate in a cost- effective way, the Strategy would provide for investment in developing and maintaining productive capacity, including staffing and infrastructure, both physical and digital.
Court members welcomed the more strategic five year approach and looked forward to a more in-depth discussion at the February Court Strategy Day. It was suggested that it could be helpful to provide some more granular detail on the academic portfolio to help evaluate growth capacity. In relation to this, the Deputy Principal advised that the growth areas identified were premised on developing existing areas of expertise in new markets, rather than moving into new academic disciplines.
Court REVIEWED the University’s Corporate Risk Register and Risk Management Strategy (Court (21) 43).
The Head of Planning reminded members that the Audit and Risk Committee had been developing a comprehensive Risk Management Strategy, taking into consideration the outcomes from a recent risk management audit. The audit had resulted in a largely positive report, within which a number of areas of good practice were identified. The report also highlighted one area for improvement, this being the need to develop a fully comprehensive risk management process, including a risk escalation process. In making this recommendation, the auditors had acknowledged that many aspects of such a risk management process were already in place, including risk impact thresholds, a tolerance matrix and assessment process.
The development of the Strategy also included consideration of risk appetite at University level and across strategic risk areas, the latter of which had been the subject of a workshop facilitated by the University’s internal auditors (Azets). This year, the Corporate Risk Register had also been updated to take into account the Risk Management Strategy. The Risk Register now included specific links to the University’s Strategic Plan and suggested acceptable levels of risk for the risk areas identified.
The main points to note in the Corporate Risk Register were highlighted as follows:
- Actions for further control had been reviewed and would now only show where specific additional actions were necessary to manage a risk.
- The revised Risk Register included both reactions to circumstances and risks associated with new activities and developments being undertaken by the University.
- Covid remained the main risk, and the impact of Brexit remained a high risk.
- The risk associated with securing student placements had increased. This was due to a combination of the Covid-19 impact and the University being asked to increase activity in allied health profession areas. In response to this latter point, it was noted that programme teams were actively considering alternative placement opportunities to the more traditional NHS settings, for example in care homes. In relation to scheduling placements, the Student President requested that, where possible, Wednesday afternoons be kept free from timetabled activities to allow students to participate in sports and other co- and extra-curricular activities.
Court welcomed the improved clarity within the Risk Register. Members sought clarification on the relationship with the Outcome Agreement, in response to which it was advised that the risk of not complying with Outcome Agreement targets had been carefully considered and was reflected in the Register. The appetite for innovation and investment in environmental and social responsibility was welcomed, although members noted that budget constraints which were referenced explicitly under this area, applied more broadly across the Register.
Court RECEIVED an update on the land development project and in particular, progress with the Edinburgh Innovation Park (EIP) and its first phase Hub (Court (21) 44).
The Director of Campus and Commercial Services provided updates as follows:
- Progress with the key components of the Local Development Plan (LDP) was ongoing, including good progress against construction activity. It was envisaged that it would take up to 20 years to complete the entire Development, with the LDP scheduled for review in 2025.
- QMU had presented outline proposals for a Commercial Zone, to be located on the site of its existing car park, within the University Masterplan Delivery Strategy. The next stage would be to present a planning application.
- Work would start shortly on the construction of an extended junction on the A1 at QMU. Completion of the junction would be a key step in enabling the EIP and Commercial Zone. Whilst there would undoubtedly be some disruption to local residents and the QMU community, every effort would be made to keep this to a minimum.
- An internal University resource plan had been implemented to address the resource implications of the overall land development and QMU commitment to lead the Hub development.
- A structure for internal University governance of the land development had been approved and implemented
- A Project Execution Plan (PEP) had been prepared jointly by QMU and Currie & Brown (Construction Consultants) for the phase 1 Hub Development.
- The University had formed a subsidiary company (NEWCO) to undertake initial stage project activity on behalf of the Joint Venture (JV) partners, while the formal JV and related corporate structure was created in parallel. In response to a question about governance, it was confirmed that the Finance and Estates Committee had delegated authority from the Court to establish the company.
- The lead consultants to the project had been instructed by QMU, on behalf of the JV, to commence the initial the project works as noted in the paper, subject to Court approval of their appointment. The selected consultants were Currie & Brown as Project Managers & Cost Consultants and CAMSCI as Commercial Advisers.
- A first draft of the JV Agreement was now available with a target date for completion of February 2022. A formal project meeting between QMU and East Lothian Council was scheduled for 21 December 2021 to review project progress.
It was NOTED that a dedicated Microsoft TEAMS page was being created for the land development project, which would be accessible to all Court members to supplement the formal reports to Court meetings.
The Chair thanked the Director of Campus and Commercial Services for the comprehensive update and supporting papers. Members were pleased to NOTE the progress with the land development project and the EIP Hub, as set out in the paper and Appendix B, which provided an overview of project milestones. Project progress would be kept under review as part of the regular reporting arrangements to the Court.
Court APPROVED the consultant appointments as presented in Appendix C, noting that the consultants had been procured through the appropriate procedures which included consideration of alternative providers.
Scottish Funding Outcome Agreement
Outcome Agreement Guidance
Court NOTED the Guidance for Outcome Agreements for Colleges and Universities for Academic Year 2021-22. (Court (21) 45).
Court RECEIVED the Queen Margaret University Self-Evaluation for Academic Session 2020-21 as submitted to the SFC on 30 November 2021. (Court (21) 46). The Self-Evaluation reported on progress towards meeting the targets established in the Outcome Agreement. The University Secretary advised that there had been good progress during the reporting period, despite the inevitable challenges arising from the ongoing coronavirus pandemic. There was much to celebrate within the KPIs in relation to ongoing ‘business as usual’. There had also been significant enhancement activity in relation to the academic portfolio, student experience and wider operation of the University.
Outcome Agreement 2021-22
Court RECEIVED the draft Outcome Agreement for 2021-22 (Court (21) 47).
An extension to the 30 November 2021 submission deadline had been agreed with the SFC to allow for discussion and subsequent follow-up from the Court meeting. The University Secretary reminded members that the Outcome Agreement Guidance (minute 12.1 refers) set the overall context the Outcome Agreement, and that specific prompt questions had helpfully been included to support institutions with the development process.
Members provided preliminary feedback, noting that there was a good balance between the immediate response to the pandemic and the longer-term challenges and opportunities. It was acknowledged that the targets were ambitious but also realistic. One suggestion for further development was that consideration might be given to celebrating more explicitly the University’s strengths and recent achievements to make these more visible to an external audience. There was particular discussion around the decline in number of direct entrants, explanation for which was provided in the Agreement. A small typographical error was also highlighted. Further comments were invited and could be submitted to the University Secretary in writing. There would also be further consultation with the Trades Unions prior to the submission date.
Compliance with UK Concordats
Court RECEIVED a report on the University’s compliance with the UK Concordat to Support Research Integrity, and the Concordat to Support the Career Development of Researchers. (Court (21) 48). It was advised that, as a signatory to the UK Concordat to Support Research Integrity, and the Concordat to Support the Career Development of Researchers, the University was required to report annual progress to its governing body.
Court NOTED a report on areas of compliance activity from July to October 2021. (Court (21) 49). The report provided an overview of the following: complaints; requests made under the Data Protection Act 2018; requests made under the Environmental Information (Scotland) Regulations 2004; requests made under the Freedom of Information (Scotland) Act 2002; and activity related to the Counter-Terrorism & Security Act 2015.
Finance and Estates Committee/Audit and Risk Committee
Court RECEIVED the minutes of the joint meeting of the Finance and Estates Committee and Audit and Risk Committee held on 18 November 2021 (FEC/AUDIT (21) MINS 05). There were no matters brought to members’ attention.
Court RECEIVED the minutes of the meeting of the Senate held on 27 October 2021 (SEN (21) MINS 04). There were no matters brought to members’ attention.
Health and Safety Committee
Court RECEIVED the minutes of the meeting of the Health and Safety Committee held on 6 October 2021 (H&S (21) 03). There were no matters brought to members’ attention
Equality and Diversity Committee
Court RECEIVED the minutes of the meeting of the Equality and Diversity Committee held on 14 October 2021 (EDC (21) MINS 05).
Court APPROVED the minutes of the meeting of the Nominations Committee held on 5 November 2021 (NOM (21) MINS 02)
Senior Management Remuneration Committee
Members RECEIVED Confirmed minutes of the Senior Management Remuneration Committee held on Wednesday, 3 November 2021, and Unconfirmed Minutes of the Reconvened meeting of the Committee held on Monday, 15 November 2021.
Members NOTED the report of the meeting held with student and staff members of the University Court on 10 November 2021.
In line with the Committee’s Terms of Reference, the Committee had considered written recommendations in relation to the performance and remuneration of members of the Senior Leadership Team. Such consideration included review of the achievement of objectives established for individuals included in the scope of the review, and members’ eligibility for the National Annual Pay Award, as applied to all members of staff within the University.
The University Court APPROVED the Committee’s recommendation that each member subject to the provisions of the Senior Management Remuneration Review policy receive the National Annual Pay Award for 2021-22 under the provisions of the Policy.
The University Court APPROVED the Committee’s recommendation concerning the revised role profile and salary attached to the Director of Campus Development and Operations, with revised salary to be backdated to 1 November 2021 in recognition that the duties of the role were being performed at that date.
Member Retiral - Cynthia Guthrie
On behalf of the Court, the Chair expressed her sincere thanks to Cynthia Guthrie, who was attending her final meeting of the University Court, having served for 6 years with distinction. Over the period of her tenure, the Court had benefitted immensely from Cynthia’s considerable management experience, gained across major organisations in several different sectors, and from her governance experience gained as a former governor of West Lothian College. Despite the many calls on her time, Cynthia had been a highly committed member of the Court and of the Finance and Estates Committee, both of which have benefited from her insight and business acumen. While Cynthia would no longer serve on the Court, it was expected that she would continue to contribute actively to Scotland’s political conversation, and that her strong sense of public duty would continue to be realised. Thanking the Chair for her comments, Cynthia expressed her very best wishes to the University.
Date of Future Meeting
The University Court would meet on the following dates in Session 2021-22:
23 February 2022 – Strategy Day (to be confirmed)
27 April 2022 at 3.00 pm (arrangements to be confirmed) 22 June 2022 at 3.00 pm (arrangements to be confirmed)