Court Minutes 17 April 2024

The Chair welcomed members to the meeting of the University Court. Particular welcome was extended to new lay member, Ellenore Hobkirk, who was attending her first formal meeting.

Apologies were noted as having been received from Sir Paul Grice and Garvin Sealy.

There were no conflicts of interest declared.

There was no Other Competent Business identified.

4.1 Minutes of the previous meeting

The Unconfirmed minutes of the meeting of the University Court held on 21 February 2024 (paper Court (24) MINS 01) were APPROVED as an accurate record. 

4.2 Matters arising

There were no matters arising from the minutes.

The Chair reported on her regular internal and external engagement with the university senior leadership, with members of the University community, and with wider stakeholders.

In terms of internal engagement, amongst the subjects discussed at her regular meetings with the Principal, had been the development of the Performance Report and Key Performance Indicators (minute 9 refers). She had also met with the Secretary to discuss preparations for the annual Stakeholder Engagement Event, which was scheduled to take place on campus following the conclusion of the Court Strategy Day being held later in the day. The Chair extended her thanks to the Secretary, and to the Director of Marketing and Communications and other contributors, for their hard work in organising the event. This was an important and enjoyable occurrence in the annual calendar of University activities.

Since the previous meeting, the Chair had also convened business of the Nominations Committee, and had been delighted to contribute to the induction of recently appointed lay members. Further, she had attended the inauguration of QMU’s Outdoor Learning Hub and Discovery Trail which had been opened officially by Graeme Dey MSP, Minister for Higher and Further Education on 19 March 2024. The Chair encouraged Court members to take the opportunity to visit the Hub during one of the scheduled tours within the Stakeholder Engagement Event.

In terms of external engagement, the Chair reported on discussions at the most recent meeting of the Committee of Scottish Chairs As on previous occasions, the meeting had provided an extremely useful opportunity for networking and informal discussion with the other Chairs of governing bodies. It was clear that many were addressing significant challenges. The Minister for Higher and Further Education, Graeme Dey MSP, has been present at the meeting and engaged in discussion with the Chairs around matters of policy development and implementation, and the financial pressures affecting the sector. Areas of discussion included the potential for more shared initiatives within and across the FE and HE sectors.

Finally, the Chair reported on a recent meeting with Calum Campbell, Chief Executive NHS Lothian, and Professor John Connaghan CBE, Chief Executive NHS Scotland regarding the possible establishment of a clinical diagnostic facility on campus to ease pressures on the NHS Lothian estate. Discussions between the Chair, the senior leadership and the NHS remained at an early stage but had been positive thus far and aligned well with the land development project, giving grounds for cautious optimism.

As the Principal was absent through illness, the Principal’s report was withdrawn from the agenda. It was suggested that the Principal might cover matters intended for the meeting in his next written communication to members.

Secretary’s note: A detailed briefing report from the Principal was circulated to members on 23 May 2024 which covered matters for their attention.

Court RECEIVED the Period 8 financial report for 2023-24 and accompanying narrative (paper Court (24) 09).

Introducing the report, the Chief Operations Officer drew to members’ attention the year-to-end forecast deficit of £1.0m. This forecast position had improved since the quarter two report by £0.3m due to further savings within Other Operating Expenses. However, these were partially offset by adverse movements on staff costs. The overall result for Period 8 was a surplus of £0.2m, and cash reserves remained healthy at around £21m.

The Voluntary Exit Scheme had closed recently with twenty-three applications. At this stage, a number had been accepted, a number declined, and a number were remained pending consideration. The recurrent annual saving of those accepted to date was expected to be around £250k with a one-off cost of £220k. Responding to a related query, the Chief Operations Officer confirmed that the vacancy saving target within the budget was 7%, and that, at this stage, not all areas of the University had achieved this target.

The Chief Operations Officer advised that, had she been able to be present, the meeting would have been the final meeting of the Court attended by the Director of Finance, Andrea Saunders. He wished to put on record his thanks to the Director for her contribution since joining the University. Members were advised that, following a robust interview process with external representation, an Interim Director of Finance with significant relevant experience, including experience of the Higher Education sector, had been appointed for a nine-month period with effect from 22 April 2024.

The Chief Operations Officer confirmed that the budget setting progress was in progress, and that the outcome of that work would be presented to the June meeting of the Court. It was intended that the narrative accompanying the budget would include the rationale and detail of the planned approach to refinancing of the Barclays loan, drawing on input from the Interim Director. One suggested was that the borrowing would take the form of a revolving loan, which offered greater flexibility. A report would also be provided to the June meeting on the process for the year end audit. Discussions had commenced with Ernst and Young to confirm the detail of the approach, and were expected to conclude shortly.

The Chair thanked the Chief Operations Officer for the overview, noting that it was positive to see the reduction in forecast deficit, albeit there remained some outstanding concerns with the forecast.

Members discussed the financial report and wider context in detail. The requested for cash flow projections in future reports was reiterated, as was the need for further detail on the impact of capital expenditure represented by Project Galileo, Future Spaces and CCTV system replacement. In discussion, the following matters were highlighted:

Project Galileo

At its most recent meeting on 19 March 2024, the Audit and Risk Committee (ARC) had received a detailed presentation on Project Galileo, and members had considered at length the progress report and risk mitigations. The project was reported as being on track against agreed deliverables and milestones, with the ‘go-live’ date for the new system identified as 3 June 2024.

ARC members had expressed concern on the ‘go-live’ date, and explored in detail the rationale for not holding off the launch until the start of the financial year, with the ‘old’ system being disabled after the end of the financial year ie 31 July. In response, members had been advised that, in assessing and managing the project risks, the project team had judged that the availability of two supported systems in June provided an overriding rationale for the June ‘go live’ date. In terms of risk management, an August launch date carried the risk that any necessary ‘roll-back’ would be to a system unsupported by the software provider. Staffing levels within the Finance Team would also be insufficient to run two systems in parallel. It was reported that transactions could, however, be exported from the new ERP system to the old Finance system if necessary.

In updating Court members on the matter, the Chief Operations Officer acknowledged the risks introduced by the departure of the Director of Finance, but sought to provide reassurance on the basis that the Interim Director had significant relevant prior experience in bringing such a project to completion. That experience would be supplemented by support from the Finance Team at Edinburgh Napier University (ENU) which had approached on the basis of its recent system implementation experience.

In responding to residual concerns and comments expressed by Court members on both the timing of the new system launch, and on the extent to which the current system would be unsupported, the Chief Operations Officer confirmed that the University had only rarely had need to access support from the vendor over the lifetime of the contract. He expressed confidence that the mitigations represented by the Interim Director’s experience and background, coupled with the ENU support, would be sufficient for the University to identify and respond to any implementation issues.

Members were advised that an update would come to the next meeting of the Audit and Risk Committee, and to the June meeting of the Court, both of which were scheduled shortly after the ‘go live’ date. Any unforeseen issues arising in the interim would be escalated to the Chair and wider Court membership, as appropriate. The Audit and Risk Committee would also maintain oversight of the implications for the Ernst and Young audit, since this would need to take account of both the old and new systems, introducing a complication to the audit process.

Financial reporting

Members identified the potential for enhancement to existing financial reporting arrangements as follows:

Capital expenditure and Cash flow: At its meeting on 7 March 2024, the Finance and Estates Committee (FEC) had requested provision of capital expenditure and cash flow reporting to future meetings. Whilst members appreciated that cash reserves were typically healthy, the extent of suggested planned investment in Project Galileo, in CCTV replacement, and in Future Spaces would undoubtedly impact. It would be particularly

important for the Court to receive such information during periods of significant investment, and to be advised of any risks.

Student fees income: The importance of student numbers as the driver of income was recognised and restated in members’ discussion, along with the extent to which current systems and processes provided vital support to student fee income projection and reporting. There had been some recent challenges in this area, including projections for online numbers, which operated on a ‘carousel’ model with six associated entry points per academic year, and projections for some TNE provision. It was planned that these issues would be addressed through both the new finance system and a planned facility to model student number projection and income, and generate live dashboard information. In the meantime, associated work on business processes and allocation of income was being undertaken through the SUMS Target Operating Model and TRAC analysis.

Finance Team resourcing

Responding to concerns about potential delay in appointment to the permanent role of Director of Finance, the Chief Operations Officer confirmed that the role description was being finalised, and that moving quickly to recruitment was a priority for the senior leadership. In the meantime, the staff complement in Finance had been strengthened in terms both of size and expertise. Discussion with the incoming Interim Director regarding potential additional consultancy requirements, specifically around the loan refinancing, was a priority.

The Chair thanked members for their contribution to a robust discussion. A detailed update would come to the next meeting of the Court in June. In the meantime, discussions would continue, as necessary, between the Chair, senior leadership, and the Conveners of the Finance and Estates and Audit and Risk Committees.

Court RECEIVED an update on the Land Development Project (paper Court (24) 10).

Introducing the paper, the Chief Operations Officer advised that the Hub development continued to progress in accordance with the contracted programme and agreed cost. The procurement strategy for client equipment was in development. Pre-launch marketing activity was underway to build the Hub’s market presence through the construction period. Enquiries arising following the launch of the Hub’s website were being recorded to enable the Hub team to measure market response and market trends. In parallel, operational budget and cash flow was being considered by the Joint Venture partners, utilising data from the Hub design alongside information from benchmark developments. Regarding the wider Innovation Park, the University and the Joint Venture continued to progress discussions with the local authority in advance of making a submission to the updated Local Development Plan.

The Chair invited court members who were present to report on the recent hosting of a visit from real estate and investment consultants, the purpose of which was to obtain insight into the opportunities presented by the Land Development Project for the University and Joint Venture, and its economic potential relative to competing local developments. The feedback suggested that the development was well placed geographically, relative to competitor sites that had been visited and that the real estate fundamentals were strong. The QMU offer was the only one with incubator space and it

would be important to build into that the 'university offer'. Support had been offered to articulate the proposition offered by the Hub and the wider Innovation Park and commercial zone, the underpinning imperative being to foreground the benefits for all partners and the wider community. It was reiterated to members that the development of an NHS facility referenced earlier in the Chair’s report (minute 5 refers) would fall within the scope of the land development project, improving service user access to clinics, and introducing new opportunities for student placement. In this context, the Chair advised that Professor Jeanne Freeman, former Scottish Cabinet Secretary for Health and Social Care, had been engaged in the early discussions and was also undertaking consultancy on behalf of the University.

Court RECEIVED a substantially reworked version of the Performance Report and revised suite of Key Performance Indicators originally presented to the February meeting of the Court (paper Court (24) 11).

Introducing the report, the Head of Strategic Planning and Policy Development reiterated that the purpose of the report was to track and provide commentary on performance against the delivery of the primary goals set out in the Strategic Plan, to including commentary on enabling activities, and updates on agreed performance indicators. Reports would be presented to the Court twice a year, this being the first such report, with some reportable items falling in the first report and others in the second, according to the timing of data becoming available. Key financial performance information would continue to be provided to the Court through discrete detailed financial reports to Court. The reporting format was a work in progress, and members were encouraged to provide any feedback to the Secretary.

The Chair commended the report and thanked members of the senior team for their contributions to developing the new format. In discussion of content, members sought clarification and covered points as noted below:

Viability threshold: Clarification was sought on the suggestion, arising from a recent portfolio review, that the programme viability threshold had been met by a reported 68% of undergraduate, and 47% of postgraduate, programmes. The Deputy Principal clarified that threshold viability indicators were indicative rather than absolute, and that programme viability was influenced by a number of factors, including the extent of modules shared across a programme. This level of detail was not captured in the narrative of the performance report. Indicative viability thresholds served as the starting point for a conversation, and by way of example, recent such conversation had resulted in a number of programmes being withdrawn from the portfolio. Members welcomed the reassurance provided, and the commitment to strengthen the narrative around viability in future reports.

Retention: There appeared to be a disconnect between the number and percentage of full-time Scottish-domiciled entrants returning to study in year two. The Secretary undertook to revisit this and ensure an update to the next version of the report.

TRAC Return: It was confirmed that a draft of the TRAC return was available, and that further work was being undertaken on the indirect costs. Whilst the TRAC return provided useful intelligence, including sector benchmarking, there were some limitations to the reporting format, which considered expenditure against public and non-public funding but without any breakdown of student fees group, for example.

The Chair looked forward to the next update, noting that future reports would help track progress against the baseline established in the first cycle.

Court NOTED a report on the following areas of compliance activity from 1 January 2024 to 31 March 2024 (paper Court (24) 12):

1. Complaints.

2. Requests made under the Data Protection Act 2018.

3. Requests made under the Environmental Information (Scotland) Regulations 2004.

4. Requests made under the Freedom of Information (Scotland) Act 2002.

5. Activity related to the Counter-Terrorism & Security Act 2015.

Thanks were extended to the Policy Adviser (Governance and Compliance) for his work on the paper.

Members NOTED discussion concerning procurement of a replacement CCTV system, including that, while the cost would not materialise within the 2023-24 financial year, there would be an impact on the University’s cash position, and on depreciation.

The University Court APPROVED the recommendation from the Finance and Estates Committee (FEC) in the matter of the tender for the appointment of a contractor to deliver CCTV replacement works.

11.2 Future Spaces Procurement (minute 5.2 refers)

Court members noted that the works associated with the Future Spaces project, which was costed at £2.1 million in total, had recently been put out to tender, with a response deadline of 11 April 2024. As set out in the FEC minutes, certain elements of the works, which fell within the University’s ongoing infrastructure investment, were time sensitive. Members were advised in particular that work to teaching spaces and to the Learning Resource Centre would need to be completed in advance of the start of the 2024-25 academic session, and ideally before the September 2024 Open Day. It had been planned originally that the FEC would meet and confirm the preferred supplier in a timescale that would provide for recommendation to the Court meeting on 17 April 2024. As this had not proved possible, it was proposed that an extraordinary meeting to consider the matter would take place towards the end of April 2024.

Given the time sensitivities, the Court AGREED to provide to the Chair of Court with delegated authority to consider, and if appropriate, APPROVE a recommendation from the Finance and Estates Committee on the appointment of the preferred bidder.

Court RECEIVED the unconfirmed minutes of the meeting of the Senate held on 13 March 2024 (paper SEN (23) MINS 01). There were no specific items brought to members’ attention.

COURT RECEIVED the unconfirmed minutes of the meeting of the Audit and Risk Committee held on 14 December 2023 (paper HSC (23) MINS 04). There were no matters brought to members’ attention. However, the Vice-Chair took the opportunity to commend the quality of the minutes, following the introduction of professional secretariat support from the Division of Governance and Quality Enhancement. This applied also to the minutes of the Finance and Estate Committee.

COURT RECEIVED the unconfirmed minutes of the meeting of the Audit and Risk Committee and Diversity Committee held on 19 March 2024 (Paper AUDIT (24) MINS 01). There were no matters brought to members’ attention.

Court RECEIVED the minutes of the meeting of the meeting of the Health and Safety Committee held on 27 March 2024 (paper HSC (24) MINS 01). There were no matters brought to members’ attention.

Court RECEIVED the minutes of the meeting of the meeting of the Nominations Committee held on 15 March 2024 (paper NOM (24) MINS 01). The following matters were brought to members’ attention:

16.1 Governor Investment Scheme (GIVE) (minute 4.1 refers)

Members were pleased to note that the GIVE scheme would launch on 1 May 2024, and that the application period would then remain open for a period of two months, to 1 July 2024. The scheme would accommodate up to two participants for a period of a year, after which point, they would be eligible for membership of the University Court on the occasion of a vacancy.

16.2 Court membership (minute 5.2.1 refers)

Court APPROVED the following extensions of period of office:

Steven Hendry and Garvin Sealy to be re-appointed to a second and final period of office to 31 May 2027.

16.3 Appointments to Court Standing Committees (minute 5.2.2refers)

Court APPROVED the following recommendation:

Andrew Watson to be appointed to the forthcoming vacancy in the Convenership of the Finance and Estates Committee.

It was advised that vacancies on the Nominations Committee and on the Senior Management Remuneration Committee arising from Robert Pattullo’s retiral had been held over, with further consideration to be given following the forthcoming lay member recruitment round.

16.4 Directorships of QMU Enterprises Limited

Court APPROVED the following recommendations:

· Jacqueline Morrison to be appointed to the Directorship of QMU Enterprises Limited.

· Jonathan Matthews (Head of Financial Reporting and Analysis) be asked to act as Company Secretary and Director of QMU Enterprises Limited on an interim basis.

16.5 Chancellor of the University (minute 6 refers)

Members were advised that Dame Prue Leith would formally stand down as Chancellor in July 2024, having served with distinction for a period of seven years from the date of her installation (July 2017). The arrangements for the appointment of a successor Chancellor of the University would be overseen by the Nominations Committee, whose terms of reference stated that it will ‘receive and consider nominations and applications for the role of Chancellor and to make recommendation to the Court accordingly’ (clause 10).

The Secretary explained that the position of Chancellor was not open to advertisement or formal recruitment but involved formal notice/call to staff and students for potential candidates who would meet the agreed characteristics or criteria. Thereafter, the Nominations Committee would consider nominees put forward, and agree a preferred candidate based on the characteristics agreed for the post-holder. The preferred candidate would be recommended for approval by the Court.

Members were advised that, although it would be preferable to be able to announce a successor to Dame Prue Leith shortly after her agreed date for demitting office, there was no requirement or pressure to do so, given the ceremonial nature of the role, with the key duty being conferment of awards at Graduation 2025.

The Chair marked the retiral of lay member Robert Pattullo. Robert had served with distinction for six years, not just as a Board member, but as Convener of the Finance and Estates Committee, and as a member of the Audit and Risk Committee and the Nominations Committee. The University had benefitted hugely from Robert’s contributions and wide-ranging professional expertise, and the Chair extended her particular thanks to Robert for his support to her since taking up the post of Chair. Members looked forward to seeing Robert at the graduation in July 2024.

Robert thanked the Chair, Court members and University staff and students for making him feel so welcome during his tenure. He had very much enjoyed his time with QMU, and in particular, witnessing the University grow and flourish over the years. He wished the Court and the University well for the future

The University Court would meet next on Wednesday, 19 June 2024 at 3.00 pm.

Dates of meetings in Academic Session 2024-25 would be circulated to members shortly.

Court NOTED the link to the Court Member Information repository, including past papers.