Court Minutes 10 February 2021

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 had stated that charities may hold their meetings in this way, including where the governing document was 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.

On behalf of the University Court, the Chair congratulated Pamela Woodburn on her appointment to the role of Chair of Court, having secured the highest number of votes in the ballot for election. Pamela would take up the role with effect from 1 April 2021, but would attend the University Court meeting on 31 March 2021 as an observer. The Chair reported that she had been in contact with Pamela to offer her support with any background matters and initial queries, and that Pamela would participate in introductory discussions with University staff and Court members over the coming weeks and months.

There were no conflicts of interest declared.

There was no other Competent Business identified.

The Chair reported on her attendance at the most recent meeting of the Committee of Scottish Chairs (CSC). The meeting had discussed a wide range of matters, including the following items likely to be of particular interest to Court members:

• Impact of the coronavirus pandemic on staff and student mental health. Of particular note was a presentation from the Principal and Vice-Chancellor of Glasgow Caledonian University which set out a range of responses to the mental health challenges. The presentation slides were available to Court members on request.
• The Turing Scheme being launched to replace the Erasmus exchange programme. While the CSC recognised the potential benefits of the Turing Scheme in providing funding for international opportunities in education and training across the world, members had expressed nevertheless their considerable disappointment at the discontinuation of the Erasmus scheme. Details of the Turing Scheme had not yet been published, and it was suggested that the Scottish Government was considering additional schemes to support student and staff exchange with established European partners.
• Scottish Funding Council (SFC) Review of Coherent Provision and Sustainability. There had been no significant updates since the publication of the phase one report in October 2020. It was not expected that the review would be concluded, or firm outcomes published until after the Scottish Parliament Elections in May 2021. The University Court would be provided with opportunity to engage more fully with the Review at future meetings.

The Principal presented a detailed update on key developments since the previous meeting of the Court on 9 December 2020 (COURT (21) 01). Matters highlighted in particular included the following:

The unconfirmed minutes of the Court meeting held on 9 December 2020 (COURT (20) MINS 06) were APPROVED as an accurate record.

Court CONSIDERED the near final audited strategic report and consolidated financial statements for the University and its subsidiary company for the year ended 31 July 2020 (COURT (21) 02). The external audit report from Ernst and Young (EY) (COURT (21) 04) and internal audit report from Azets (COURT (21) 05) were provided to informmembers’ consideration. Court also CONSIDERED the Letter of Representations to Ernst and Young (Court (21) 03) and delegated authority to the Chair to sign the Letter.

The Director of Operations and Finance delivered a short presentation on the strategic report and financial statements, which had been considered and endorsed by the Finance and Estates Committee (FEC) and the Audit and Risk Committee (ARC). Both FEC and ARC had recommended that the University Court should grant approval. Members were advised that there were some minor points to be finalised in the EY audit report wording, following conclusion of the EY review of pension provisions. As such, it was not possible to ask for final Court approval of the accounts. Court was asked to delegate authority to the Chair and Principal to sign the final accounts, subject to review by the FEC and ARC Conveners. The deadline for submission to the Scottish Funding Council was 28 February 2021.

As noted previously by the Principal (minute 5 refers), the end of year accounts showed an underlying deficit of just over £1m, this being within £100k of the initial (pre-COVID) budget. The University had complied with all bank covenants, and would have complied with the original covenant, prior to the relaxation granted by Barclays. The one off receipt of £1.4 million from Persimmon in August 2020 for reimbursement of infrastructure costs had been accounted for in the 2019-20 accounts. The final reported position had been affected by sizeable adjustments to the valuation of land and buildings and to pension provisions, although neither of these had any immediate impact on cash flows, and the cash position remained relatively strong. After these adjustments, the accounts showed a deficit of £9.5 million.

As in previous years, Court was required to form an opinion on whether the University should prepare its accounts on a going concern basis. A number of 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 indicated that the University could continue in operation for the next twelve months whilst maintaining a minimum cash balance, as required by the bank covenant. Several scenarios indicated a potential breach of the operational leverage covenant at 31 July 2021. However, Barclays had provided a relaxation, which would allow this covenant to be met under all scenarios. SFC had provided a letter indicating its intention to continue to fund the University along broadly similar lines for at least the next year. In addition to the consideration of scenarios, the rolling five-year review of KPIs, indicated that, whilst EBITDA was a little below the five-year average target for long-term financial sustainability, the cash indicators showed a position above the long-term average target.

The Chair thanked the Director of Operations and Finance for the comprehensive paper and presentation. On behalf of Court, she commended the Senior Leadership Team on the successful management of the University’s finances despite the challenges arising from COVID.

The Director of Campus and Commercial Services provided an update on the Land Development project. The first draft of the Full Business Case (FBC) for the Innovation Hub had been submitted to the City Deal Project Management Office prior to the winter break. The FBC had been positively received, with some further information requested from the UK and Scottish Governments. In addition, it was noted that a response from the Westminster Department for Environment, Food and Rural Affairs (DEFRA) was also expected. Once complete and prior to its submission, the FBC would be subject to Finance and Estates Committee and Court approval. Subject to concluding any outstanding responses it was projected that the FBC would be scheduled to go to the June 2021 City Deal Project Committee. The sequencing of meetings to enable that was such that it might be necessary to convene extraordinary meetings of FEC and Court to consider and approve the final submission. In parallel with work on the FBC, the structure of the Joint Venture between the Council and the University continued to be developed, taking account of tax advice. It was expected that an updated timeline for the project would come to the meeting of the Finance and Estates Committee on 10 March 2021.

In response to a specific question, and following the earlier update on the involvement of Edinburgh Napier University (ENU) in the City Deal (minute 5 refers), the Director of Campus and Commercial Services explained that ENU would support QMU with data driven innovation, this being a key strand in the City Deal. The involvement of ENU not only added demonstrably to the academic case, it also strengthened the collaboration across the four Edinburgh based universities.

Guidance for Interim Outcome Agreements for Colleges and Universities for Academic Year 2020-21

Court RECEIVED the minutes of the joint meeting of the Finance and Estates Committee and Audit and Risk Committee held on 26 January 2021 (FEC/AUDIT (21) MINS 01). Matters arising had been discussed elsewhere in the meeting. The Convener reported that the joint meeting format had worked well, and that it had been useful to have representatives from Ernst and Young and Azets in attendance.

Court RECEIVED the minutes of the meeting of the Senate held on 16 December 2020 (SEN (20) MINS 05).

Court RECEIVED the minutes of the meeting of the Health and Safety Committee held on 15 December 2020 (H&S (20) MINS 05). There were no particular matters brought to members’ attention.

Court RECEIVED the 2019-20 Annual Reports of the Finance and Estates Committee (COURT (21) 09) and the Audit and Risk Committee (COURT (21) 10). The reports provided a helpful overview of the operation of the Committees and confirmed that the Committees had effectively discharged their responsibilities in accordance with their terms of reference, as delegated by the University Court.

It was confirmed that the Annual General Meeting would take place prior to the Ordinary meeting on 31 March 2021. Such meeting would be held virtually, in view of the ongoing restrictions relating to travel and to indoor gatherings.

A member commented on the format and presentation of papers, and in particular, the number of documents provided. In discussion, members commented variously on the extent to which the papers were comprehensive and well presented, but also on the potential to reduce the volume. Members acknowledged the need to strike a balance between brevity and provision of the information necessary for good governance. It was noted also that the format and content, and the inclusion of a significant number of the papers was determined by external agencies.