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Lambeth College Minutes of Corporation Meeting held on 10 November 2016 at 5.30pm at the

Clapham Centre

ATTENDANCE:

Present:

Mary McCormack (Chair) Michael Smith Bev Jullien Mohammed Seedat Guy Ware Monica Box (Interim Principal) Teum Teklehaimanot Marcus Walsh Jennifer Bufton Kirsty Wadsley Ruth Begusa Charley Hasted Fred Knipe Rob Flinter

In attendance:

Paul Cox Vice Principal Curriculum Richard Allanach Director of Finance – Interim Lynn Forrester-Walker Vice Principal Strategic Planning Interim

Director of Learner Journey (for item 8.3) Clerk to the Corporation – Interim Deputy Clerk to the Corporation

Philip Cuniffe Mary Heslop Shaun Lee Stephen Bagley Skills Funding Agency (Observer)

Apologies noted:

Paul Reid

DECLARATIONS OF INTEREST

There were no declarations of interest.

CHAIR’S INTRODUCTION

The Chair thanked teaching staff, support staff and students for all their efforts before and during the Ofsted inspection this week. The Chair also thanked the Vice Principal Curriculum, the Interim Principal and the whole management team. All college staff had worked well as a team to get the best possible outcome for the College.

The Ofsted inspection is a significant agenda item for the meeting as is Strategic Options. New governors had just had a briefing on the Vauxhall Development and a briefing on financial reporting open to all Governors is being arranged for immediately before the next Board meeting on 15 December.

1. MINUTES FROM PREVIOUS MEETINGS

1.1 Minutes from 29 September 2016

The minutes and confidential minutes from the meeting on the 29th September 2016 were agreed as correct, subject to an amendment to delete the third sentence on page 8 in relation to a query from the support staff Governor on SAR data.

1.2 Matters arising

Student Governors’ Report

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The Vice Principal Curriculum gave a verbal update on the issues of timetabling and late bursary applications that had been identified by the student Governors.

Timetabling: Governors were informed that learners had been consulted on their timetabling preferences and had been able to fully input into the arrangements. A similar approach would be used for 2017/18 timetabling to engage with students.

Bursaries: Governors were informed that although the College was initially slow to set up the bursary application process, the service was now fully up and running with an improved process via a central hub. Students had experienced delays in receiving their bursary money but payments had now started to come through. There were however, a substantial number of payments outstanding.

Governors were concerned that the delays in bursary payments may be affecting students’ ability to attend classes. Governors asked for an update at the next meeting and that management set a target of 80% of bursaries to be paid by the time of the next meeting.

Legality of College continuing to trade

The Interim Clerk gave a verbal update on the legality on the College continuing to trade and the planned insolvency regime. Members were informed that the Further and Higher Education Act 1992 has no provision for FE Colleges to become insolvent.

There had been a Government consultation on insolvency proposals which would

enable Colleges to go into administration. The Technical and Further Education Bill,

once enacted, will establish a clear insolvency framework with procedures broadly in

line with those under the Insolvency Act, including administration arrangements. The

insolvency regime will also give creditors certainty about how their claims will be dealt

with. The DFE will publish guidance for Governors to help them understand their role

once an insolvency regime has been introduced. There will be further consultation on

proposals to make governors liable for wrongful trading. The new regime is expected to

come into effect by late 2018. It is expected that any insolvency regime would only

apply in exceptional circumstances; that area reviews will tackle the financial issues of

colleges and that insolvency is not likely to apply where a merger partner has been

found. In the meantime, the Government believed that Governors and senior managers

should have due regard to creditors as well as providing education to their learners.

The SFA Observer confirmed the position as described and referred to the opportunities for restructuring facilities via the transaction unit arising from area review outcomes.

This would be discussed again under agenda item 7.2 (Management Accounts), when Governors will be asked to conclude whether it is lawful for the College to continue to trade.

2. LEARNER VOICE REPORT

2.1 Report from Student Governors

The Chair thanked student Governors for providing a clear written report that had provided an opportunity to consider the issues before the meeting.

NUS/AoC Student Governor Event: The student Governors informed members that they had attended an NUS/AoC Student Governor event the previous day, which had been

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very useful. They had learnt that a number of other colleges provided SU members with facilities such as tablets and other infrastructure.

Student Union Budget: Governors were informed that the Student Union budget for 2016/17 was £5,000 and that Laura Ryan, Head of Learner Development & Support was the identified manager for the SU to liaise with on the budget.

Link role: The Interim Director of Finance had indicated that he would be willing to identify a finance team member to link with the SU Treasurer and that Student Governors could contact him to progress this further.

SU Office: The Chair asked Managers to investigate the location of the Student Union Office.

SU IT User Account: Student Governors were advised that they could contact the Interim Director of Finance for assistance in raising the request to set up an IT user account for the SU.

3. PRINCIPAL’S REPORT

3.1 Principal’s Report

Governors received a report from the Principal which included updates on organisational structure consolidation, Borough Council support for merger proposals, the draft FE Commissioner’s visit report, the College website and the Director of Business Development role.

Organisational Structure: The Interim Principal reported that two Director Posts had been created to accommodate the October departure of the Vice Principal Quality. The Vice Principal Curriculum had taken on the Quality function in addition to Curriculum. The line management of MIS had moved to the Interim Principal.

FE Commissioner’s Report: Governors were informed that the FE Commissioner’s draft report together with a letter from the Minister of State for Apprenticeships and Skills had been received earlier that afternoon and that copies would be distributed to members later on in the meeting. The report would be brought to the 15 December Board meeting.

Website purchase: Governors were informed that online enrolment was not possible via the current website system. The manual enrolment system currently required learners to fill out several forms with several different staff members in order to complete the enrolment process which results in the risk of data errors within the main ILR. Managers within the Learner Journey/Customer Service area had been investigating new web based platforms to enable online enquiry and enrolment. The preferred website provider at this stage was also the provider for Lewisham and Southwark and South Thames Colleges who have offered positive feedback to date. The cost of renewal of the website would be £38,000.

Low Enrolment Risk: Governors were informed that income projections resulting from low enrolment to date for 2016/17 were depressed by approximately £1 million. The College had yet to submit the R04 that would provide more detail on the funding earned.

Director of Business Development: Governors were informed that David Byford, Director of Business Development would be leaving in December 2017. Governors

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considered that this was a key role at the College and were informed that the College was looking to replace this role, possibly on a secondment basis.

3.2 Conditions for Exceptional Financial Support Payment

Governors received a report on the conditions for the Exceptional Financial Support (EFS) payment for retrospective approval.

The College had applied to receive EFS from the SFA to help the College to continue to trade lawfully. The College had been advised by the SFA that the full financial support requirement would be incremental and dependent upon the progress of the College’s financial recovery plan and performance reviews by the SFA. The EFS payments were to be made in tranches and there was a sign off process for each tranche.

The College received notification on 21st October 2016 of the transfer of the first EFS payment of £1.2m, subject to the signing of a loan agreement by the Interim Principal. The Interim Principal had taken advice on the risks in signing the agreement and had conducted a risk analysis. The conclusion was that the College’s ability to continue to operate in the event that the monies (£1.2 million) were not paid into the bank account within the desired timeframe would be compromised if the agreement was not signed and returned to the SFA in order to release the funds. The risks in not signing were assessed as greater than signing. The signing of the loan agreement fell outside the financial regulations of the College as Board approval had not been given to enter into a significant additional loan arrangement. This was the first opportunity to bring the case for approval to the Board.

Governors supported the view that declining to sign the document at that stage had not been an option as the College was not able to operate without the EFS support.

The SFA Observer confirmed that the College has met the SFA criteria for EFS and outlined the process. The payments are viewed as a loan and that is the nature of the EFS.

Governors queried whether an assessment against the criteria is required for each month’s payment and the SFA Observer informed Governors that this would take the form of a review to ensure that the funding was being used for the purpose agreed. Governors also queried whether the SFA required any security for ESF payments and were informed that this was not required. Later in the meeting, the SFA Observer clarified, in response to a question from the teaching staff Governor, that there was the potential if and when the EFS support was converted to a loan for security to be taken against College premises.

The Board retrospectively APPROVED the Interim Principal’s actions in signing the agreement for £1.2m paid in October and APPROVED the Interim Principal signing Exceptional Financial Support agreements up to the sum of £5.2m in 2016/17 inclusiveof the £1.2m paid in October 2016.

3.3 Vision and Mission Review

Governors received a report on the review of the College’s mission and aims. The purpose of the review at this stage of the academic year was for the Board to have an opportunity to reaffirm its strategic mission and aims rather than revise them. In reaffirming the strategic mission and values, the Board was invited to consider how, in a period of uncertainty for staff, it can use the review to assert its commitment to generating a culture that: cares for and respects community (learners and staff)

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members, encourages innovation and new ideas, values collaboration, communicates openly and promotes ownership at all levels.

The Board AGREED to confirm its commitment to the corporate strategic mission and aims including its strategic commitment to organisational merger. In considering the corporate ethos, the Board affirmed its commitment to sound corporate values.

4. SEARCH AND GOVERNANCE

4.1 Appointment of Vice Chair

The Interim Clerk reminded Governors of the process for the appointment of the Vice Chair and informed them she had received a nomination for Michael Smith as Vice Chair from Mohammed Seedat and Mary McCormack. As there was only one nomination, there was no need for an election. Governors thanked Michael Smith for agreeing to take on this demanding role for another term.

The Board APPROVED the appointment of Michael Smith as Vice Chair for a period of two years with effect from the expiry of his current term as Vice Chair.

4.2 Code of Governance

Governors received a report on the ‘Code of Good Governance for FE Colleges’, produced by the Association of Colleges and developed to assist Boards to meet and exceed basic governance requirements. The Search and Governance Committee had reviewed the code and recommended that the Board formally adopts and self-assesses against the Code. The Chair of the Search and Governance Committee commended the Code, advising Governors that it was worth looking at in detail and is a helpful Governance document.

The Board AGREED to formally adopt the Code and commit in its approach to governance to the Core Values of College Governance (page 4) and the 10 Principal responsibilities of Good Governance (page 5).

The Board also AGREED to use the code as the basis of their self-assessment and that this would be the subject of the next away day in early 2017.

Governors requested that the date of the away day be communicated as soon as possible.

4.3 Report from Search and Governance Committee

Governors received a paper which provided an overview of discussions and recommendations from the Search Committee meeting on 20th October 2016. Governors agreed that the current membership was broadly balanced in relation to its ethnicity, diversity and age profile.

The Board APPROVED:

The appointment of Fred Knipe and Jennifer Bufton as members of AuditCommittee

The appointment of Fred Knipe as Chair of Audit Committee

The appointment of Michael Smith as a member of Remuneration Committee

The Committee membership as set out in appendix 1 and NOTED the proposalto establish sub-committees in the next paper.

The amendment of the Instruments and Articles to set a maximum of two termsof office for Board members (2 x 4 year terms).

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4.4 Proposal to establish sub-committees

Governors received a report which proposed the introduction of a Finance Committee and a Quality and Improvement Committee. These proposals were designed to help ensure that there was an effective level of scrutiny by the Board of College finances and quality.

Attached to the report were draft terms of reference and Governors noted that staff governors were not excluded from being considered for membership of the Finance Committee or the Quality and Improvement Committee. The draft terms of reference were a starting point for the Committees to agree their own terms of reference. The Finance Committee for example, may wish to consider whether the monetary value of projects or contracts are appropriate and whether outstanding invoices/creditors should feature more significantly.

Discussion points included:

Governors noted the need to seek two additional members for the audit committee to ensure quoracy.

It was not considered good practice to have shared membership of Finance and Audit committees and it would be wise to keep audit and finance committees with separate memberships.

There was a need for more financial and accountancy expertise on the committees, although it was not considered essential to have financial expertise for Audit Committee membership.

Governors noted that the vacancies would be considered by the Search and Governance committee who would make proposals to the Board. It is assumed that existing Finance and Quality group members will move to the new committees and this would leave one vacancy for Finance and two vacancies for Quality and Improvement Committee. Kirsty Wadsley had previously indicated willingness to be on the (former) Quality Group and the support staff Governor has indicated he would like to be on the Quality and Improvement Committee.

Governors were asked to contact the Clerk if they would like to be put forward to the Search and Governance Committee as a member for any of the committee vacancies.

Rob Flinter stated that he would be willing to join a sub committee as there was clearly

a need for Audit and Finance Committee membership. He would not however also be

able to commit as a Director of SW4 Catering Ltd or as a member of the Capital Works

group.

The SFA Observer commented that the membership of committees needed to be robust to be able to respond to the College’s financial issues and to strengthen governance as a whole.

The Board AGREED to introduce both a Finance Committee and a Quality and Improvement Committee and to:

Appoint members to the Finance and Quality and Improvement Committees

Request that the appointed members consider and agree the remits anddelegations of the respective Committees and report back to the Corporation

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Agree to amend the powers of delegation in the Instruments and Articlesaccordingly.

5. STRATEGIC OPTIONS UPDATE (CONFIDENTIAL)

6. KEY PERFORMANCE INDICATORS

6.1 KPIs and Targets

The Interim Principal provided the Board with an update on the position against the KPIs. It was noted that these had been reviewed to tie in with the KPIs required as part of the Financial Recovery Implementation Plan.

The key points were:

The financial performance is weaker than planned and low enrolment underpins this. The College is £300k behind on income and this will have an impact for the following year. Although £800k has been saved on staffing costs, the overall loss of income could be up to £1m.

Potential savings are being examined and ideas for cost savings will need to be presented at the SFA case conference. Proposals for cost savings will then be presented to the Board.

Learner achievement for vocational provision has improved slightly, although there is a decline once English and maths is factored in. Apprenticeship outcomes are on target and 20% ahead of the previous year.

The Board COMMENDED the improvement in vocational achievement and NOTED that English and maths depresses the outcomes overall. The Board also NOTED the good achievements in apprenticeships.

2016/17 College Performance Update (half term 1)

The VP Curriculum presented a paper on attendance based on the first six weeks of the academic year and the learner view survey. The attendance data shows an improvement in all areas compared to the same period last year, but attendance in English and maths needs to improve.

In relation to the learner view survey, it was reported that Ofsted inspectors have been impressed with the size of the sample.

The teaching staff Governor raised an issue regarding students missing lessons because of Friday prayer observance and Governors queried the marked absence approach. The Vice Principal Curriculum informed Governors that there was no authorised absence policy to cover this and that the College’s approach was to seek to work with learners so that their studies were not adversely affected. The Interim Principal advised Governors that this is routinely dealt with by Colleges across the country and that staff would be supportive.

The Vice Principal Curriculum was requested to bring the guidance he is developing on this to the next Board meeting.

6.2 KPI Proposal

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The teaching staff Governor presented a document listing the key KPI data that should be reported on to the Board. He stated that he had asked on a number of occasions for information on the number of staff employed at the College and that different figures were used by finance and HR. The Interim Principal confirmed that the College does have a single and accurate establishment list.

Governors thanked the teaching staff Governor for his suggestions and recommended that the KPI lists go to both the Finance Committee and the Quality and Improvement Committee for consideration and review alongside the SFA recommended KPIs.

7. FINANCE

7.1 Enrolment Update (including staffing implications) - CONFIDENTIAL

7.2 Management accounts (including cashflow forecast)

Governors received the Management Accounts for the period ending September 2016. The paper also presented the most recent cash flow forecast for the college, produced in October. Governors noted that the short term management of cash and creditors continues to be a critical activity for the college.

Assessment of whether it is lawful for the College to continue to trade: Governors discussed and reviewed whether it was lawful for the College to continue to trade.

Governors noted the legal aspects which the Interim Clerk had summarised and that legislative change would still need to go through parliament. Part of the judgement in relation to Area Review recommendations is that the College will be expected to be financially sustainable and Governors thought that this was an extra reason to scrutinise merger options more carefully.

Governors asked whether the College had taken legal advice on concluding that it was legal to continue to trade. The Chair confirmed that legal advice had been taken. This had included that if Governors are confident that the SFA will cover essential expenditure in the form of EFS, it would be viewed as reasonable to continue to trade in terms of believing that creditors and staff would be paid. Governors needed to take a balanced decision.

The Board AGREED that there was reasonable assurance to trade in that:

The Government would continue to support the College via EFS payments aslong as the College follows the rules of engagement for financial support –which is monitored via monthly case conferences

There was no current insolvency regime for FE college

Governors were informed that staff costs were below budget and that the College was now gaining control of staff costs. The level of income received from Government for Advanced Learner loans is above the budget that Governors set.

The College will not achieve its income budget for 2016/17 and a more accurate figure will be available for the 15 December Board meeting.

The target ratio for staff costs to income was 70%. This is high for the sector as a whole and the current trajectory is that this will be just below or just above 70% for the year.

At the end of September there was great creditor stress but the level of creditor claims has now been reduced as a result of the EFS.

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The Chair of the Finance Group emphasised the importance of identifying controls to bring the College back into budget. This is important for maintaining credibility with external agencies. It is not unreasonable to assume that financial support would be forthcoming

The SFA Observer assured Governors that regular case conferences have been undertaken to ensure that there are no surprises.

Governors asked how confident they could be that the College has a robust and transparent process for creditors. The Interim Director of Finance advised that the system is as robust as the situation allows. The system is transparent and all invoices that had been approved up to end of August have been paid, with the exception of three large suppliers. The vast majority of suppliers are being paid equally and small traders are being kept informed.

In response to a question on why some staff might have two contracts, Governors were informed that this would be the case where the member of staff is carrying out two roles, such as technician and teacher.

In response to a query from the teaching staff Governor on the year-end target figure of 70% for staff costs ratio against the estimate of 68%, it was clarified that income comes in at different times and is not directly linked on a monthly basis to salary payments.

The Board NOTED the management accounts and paper

7.3 Financial Recovery Plan Update

Governors received an update of the College Financial Recovery Implementation Plan to review progress. Governors noted that the report had been updated to include a monthly update column, with the previous update visible to ensure comparability and the improvements made. Governors also noted that the report had an improved RAG rating system, whereby milestone, not yet reached were now shown as clear, rather than as red.

8. QUALITY AND CURRICULUM

8.1 Self-Assessment Report

Governors received the draft Self-Assessment Report (SAR) for 2015/16.

Governors were informed that it was good practice to undertake external validation on the SAR. Governors agreed that as Ofsted were currently undertaking an inspection and undertaking their own validation of the report during the current week, an additional validation would not be required. Governors considered that an Ofsted validation would be invaluable.

The feedback to date from the team of inspectors who are in College this week is that the College’s judgements are in line with theirs and that the SAR is appropriately critical. As a result of the earlier production of the SAR, it has been possible to produce a Quality Improvement Action Plan (QIAP) much more quickly than previously. Ofsted have seen a strong alignment of the QIAP with the areas that need to improve and a sharper focus than last year.

Feedback from the Ofsted inspection process this week also included that good student behaviour had been noticed and tutorials, Equality and Diversity and safeguarding including Prevent were strong. Inspectors had seen an improved approach on English

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and maths but more work is needed on attendance. A note on the feedback from Ofsted inspectors will be sent to Governors immediately after the feedback is given on 11 November.

In response to questions from Governors on the SAR:

Table 3, page 2 - Construction, Engineering and Dental self assessed at grade 4: At the end of last year, outcomes were lower than expected although there was good performance in some areas. Engineering and Construction areas were combined for the purposes of the SAR as previously they both came under the same manager. In relation to Construction, plumbing does well and electrical does less well. Retention for year 3 Dental was an issue affecting performance but less so for year 2. The structure of the Dental courses is being reviewed and as a result, next year’s outcomes should be better.

Para 10, Page 35 – Data quality and Basic Skills and English and maths: Basic skills and English and maths is across College and forms part of a number of school areas. The VP Curriculum offered to explain the detail of the data to the support staff Governor outside the meeting.

In relation to data quality this year, the College took steps in June and July to develop the capacity to build reports as needed and inspectors have not raised any issues of data not correlating.

The Chair thanked all staff for their hard work for the Ofsted inspection and the Vice Principal Curriculum for his good work as College Nominee.

The Board APPROVED the College 2015/16 Self Assessment Report

8.2 Apprenticeship Activity Update

Governors received an update report on the apprenticeship team, SFA funding allocation, current apprenticeship provision and future plans and opportunities.

Members noted that the Apprenticeship Department had continued to expand in line with the College strategy throughout 2015/16. The focus had been on improving the quality of the provision and an overall success rate of 81.9% had been achieved for apprenticeships that was over 10% above the national bench mark. There were areas to improve on in timely success.

The Board NOTED the report and congratulated the Director Business and Commercial Development on the overall apprenticeship success rates.

8.3 Safeguarding Update

Governors received a Safeguarding Update Report that covered: Safe School Officer, safeguarding disclosures, drug and alcohol awareness and referrals.

Governors requested that the current e-safety software should be re-assessed as suggested by Ofsted inspectors. They also commented that the acquisition of software should have been discussed with the Safeguarding link Governor first and that link Governors should be informed of difficult issues. The alternative to the software used by the College was considered to be a better product, although it is expensive. The Interim Director of Finance confirmed that the software had already been purchased.

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The Board AGREED that a risk assessment of the system that had been purchased should be undertaken and brought back to the Board at its next meeting.

The student Governors raised the issue of the College’s firewalls blocking access to other College’s LGBT support sites.

The Vice Principal Curriculum reported that Safeguarding was an emerging strength in the Ofsted inspection and that Prevent was effective with a good awareness of British Values.

Governors asked whether there had been any increase in the number of Prevent referrals and were informed that these had increased from zero to two and that there were no reasons for concern.

The student Governors were asked whether there had been any negativity amongst students or reputational impact in relation to the recent incident outside the College. The student Governors reported that few students knew about the incident at the time and they didn’t think that there was reputational damage. The College had reacted quickly with an email that assured students that the College was safe and the police presence had made students feel safer. The Director of Learner Journey confirmed that there had been no press coverage or social media in connection with the incident. Governors referred to the police presence outside the College today in connection with a school incident. Governors were informed that Mohammed Seedat had connected the VP Curriculum to a senior officer at the Lambeth police force.

9. CAPITAL

9.1 Capital Projects Update

The Interim Vice Principal Strategic Planning presented an update report on the Vauxhall Project and the Brixton development. In relation to Brixton, there were no issues to bring to the attention of the Board.

The Interim Vice Principal gave additional updates from the paper in relation to the Vauxhall Project. The Development Agreement would be signed within the next 2 weeks and there are only minor issues on its 21 annexes. A bid had been received by Carillion from a residential developer and the initial indication is that the bid is acceptable and would ensure that the land sale and the project would be viable.

A meeting had taken place today with the Lambeth Borough planners. There had been 150 objections to date but the College was advised not to be concerned. The planners wish to make only minor changes to the plans.

There is a concern emerging regarding the lack of progress on the Section 106 which could be a key risk to the viability of the project. The College has asked for an early draft of this which is not yet available.

In response to questions from the teaching staff Governor, Governors were informed that the decision on the hotelier had not yet been taken and that there shouldn’t be a levy for the College to pay on the Section 106.

10. AUDIT

10.1 Audit Committee Minutes 11 October 2016 - CONFIDENTIAL

11. ANY OTHER BUSINESS

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11.2 Review of Confidential items

Governors were asked to agree which items should be treated as confidential and AGREED that the following items were confidential:

Strategic options Update –Agenda item 5.1 Paper I

Enrolment Update – Agenda item 7.1 Paper L

Discussions regarding Auditors Committee – Agenda item 10.1 Paper S

Remuneration – Agenda item 11.1

College Staff, Staff Governors and Student Governors left at this point

11.1 Remuneration – CONFIDENTIAL

The meeting ended at 9.15pm