The Council

COUN10-M1

Minutes of the meeting of the University Council held on Friday 19 March 2010.

Members:

Sir Bryan Carsberg (Chair); Dr Memis Acar; Dr Jo Aldridge (ab); Dr Anja Baumhoff; John Blackwell; Penny Coates (ab); Dr Sandie Dann; Arthur Deakin (ab); Brian Dent (ab); Gifty Edila; Sir John Gains; Professor Neil Halliwell; Rob Hulme; Sir John Jennings; Jamie Morgado; Jim Murphy; Jim Mutton; Terry Neale; Professor Ric Parker (ab); Professor Richard Parry-Jones (ab); Professor Shirley Pearce; Simon Proffitt; Professor Ian Reid; Mark Sismey-Durrant (ab); Jackie Strong; Nigel Tamplin; Philip Wilkinson-Blake; Alan A Woods; Dr Dominic Wring.

In attendance:

Rob Allen; Professor Morag Bell; Dr Sophie Crouchman; Professor Phill Dickens; Chris Dunbobbin; Professor Chris Linton; Sir Charles McCullough; Dr Jennifer Nutkins; Will Spinks; Caroline Walker; Jon Walker.

Apologies for absence were received from:

Dr Jo Aldridge; Penny Coates; Arthur Deakin; Brian Dent; Professor Ric Parker; Professor Richard Parry-Jones; Mark Sismey-Durrant;

10/01 Chairman’s Introduction

The Chairman welcomed the University Visitor, Sir Charles McCullough, to the meeting.

10/02 Business of the Agenda

Item 16. was unstarred.

10/03 Minutes

Minutes of the Meeting of Council held on 27 November 2009 (COUN09-M7) were CONFIRMED.

10/04 Matters arising from the Minutes (amended)

COUN10-P1 & COUN10-P2

04.1 Further to minute 09/96.4, Council RECEIVED a summary of background information relating to the University’s purchase of the Quality Hotel (now The Link hotel) and APPROVED the loan facility with Lloyds TSB. The following points were noted:

(i) The purchase would not affect the University’s capital programme.

(ii) The interest rate on the loan was at a competitive level.

(iii) The hotel had been purchased in the University’s name, and would be leased to imago Ltd, in return for a rent. Gift aid of profits would benefit the University. Under this arrangement, the University’s charitable status would be unaffected.

04.2 Council NOTED that, on 9 December 2009, the Privy Council had approved changes to the Charter and Statutes.

10/05 University Strategy/Planning

COUN10-P3

Council RECEIVED an update on the University Strategy and Implementation Plans following the Executive Leadership Team Away Day.

It was noted in discussion that initial proposals on the future structure and organisation of the University had been considered by Senate on 27 January 2010. A Project Management Board (PMB), chaired by the Dean of Science, had subsequently been established by Operations Committee with the aim of recommending an action plan to complete the change to a larger cost centre (School) operation. The proposed reorganisation was a sensitive issue, and the PMB would consult widely before producing recommendations for consideration by Senate and Council in June/July 2010. It would be important to ensure that examples of good operational practice in the existing structure were not lost in any move to a school-based structure, and to consider the academic, as well as the financial rationale for the fusion of smaller cost-centres into larger Schools.

10/06 Key Performance Indicators

COUN10-P4

KPIs relating to a number of areas had been updated since the last meeting of Council, and new KPIs for sport and human resources were presented for the first time. The following points were noted:

(i) The proportion of female professorial staff varied considerably by subject, and the subject-mix at Loughborough was such that the overall proportion was relatively low. This was a significant issue for the HE sector as a whole, and the University was involved in a number of national initiatives.

(ii) A full analysis of staff diversity, including ethnicity, was undertaken on a regular basis for Human Resources Committee. It was agreed that this would be included in the papers for the next meeting of Council. ACTION: Director of Human Resources

(iii) It was agreed that relevant benchmarks for the KPIs for human resources would be presented in future reports. ACTION: Director of Human Resources

10/07 University Finance

07.1 University Budget 2009-10

COUN10-P5

Council RECEIVED an update on the University’s budget for the current year. A number of adjustments had been made to the budget considered by Council in November 2009, but the overall surplus forecast remained at £9.5M.

07.2 Financial Climate Briefing 2010-2014

Council RECEIVED a presentation from the Director of Finance on the current and medium-term financial climate. Council was reminded that in November 2009, it had considered a Five Year Plan, in support of the University Strategy Towards 2016. The Plan had assumed cuts in HEFCE income of 5%, 3%, and 3% over the following three years, and had indicated that even with increases in research, advancement and enterprise income, as per the original Silver Scenario, there would be a need to make savings of £14.7M over three years (2-3% each year) in order to avoid going into deficit in 2012-13. Whilst noting the significant uncertainty on which the assumptions contained within the Plan were based, Council had asked that further work be undertaken before it was approved for future planning purposes.

Details of HEFCE grant allocations for 2010-11, and associated advice, had now been published. HEFCE had taken steps to minimise reductions in the core teaching grant, and the University’s allocation had been increased by 1.2% (against a predicted cut of 5%). However, this still represented a real terms cut, taking into account anticipated inflation. The situation beyond 2010-11 remained highly uncertain but indications from HEFCE and the Department for Business Innovation and Skills were that there would be further significant cuts in HE funding. The University’s medium-term forecast, requiring savings over the next three years as described above, was therefore still relevant.

The importance of the Value for Money (VFM) agenda in making the best use of available resources, and operating in the most efficient manner possible was underlined. A number of VFM ideas had been identified so far by the Executive Leadership Team, and the Services Working Together and Simplicity agendas were highlighted. There were a range of other options for reducing expenditure including ‘salami slice’ savings across all support services and departments (although targeted differential savings were viewed as being preferable), and reducing/delaying the capital programme (although this would impact on the University’s ability to achieve its strategy, for limited benefit to recurrent funds). Losing a section of activity would be considered only as a last resort. There were also options for increasing income, for example from increased international student recruitment, and commercial activities. However, while these would have a role in addressing the financial gap, they would not provide a full solution. A number of uncertainties remained, relating to factors such as tuition fees and associated bursaries, research funding, pensions, and the possibility of a new government in May 2010.

Unlike many institutions, Loughborough was starting from a sound financial position. The University had time, therefore, to establish a project structure to allow it to meet the financial challenges that lay ahead, while still delivering on its vision and strategy ‘Towards 2016.’

The following points were noted in discussion:

(i) Operations Committee and ELT were in the initial stages of considering the potential for differential savings targets for separate departments/sections.

(ii) There were challenges associated with the creation of a cost-saving culture amongst all staff. However, there had already been a successful engagement with staff as part of the ongoing “It’s Better Off” campaign to save energy and reduce the University’s carbon footprint. The renegotiation of the University’s contracts with its gas and electricity suppliers had also produced significant savings in this area. Further, the Vice-Chancellor and Director of Finance would shortly be presenting a series of open-sessions for all staff on the financial climate, in which they would promote the VFM agenda, and warn against complacency. It was important that all HoDs, HoSSs, and members of Council helped to promote a cost-saving culture.

(iii) There would be strong competition for research funding in the difficult financial climate that lay ahead, but the University was well placed in terms of its expertise to benefit from a number of forthcoming initiatives.

(iv) For demographic reasons, a greater than normal proportion of staff would be retiring in the next few years. It was likely that this would bring some staff-cost savings in the short term, but it would be important to maintain the calibre of academic staff through new appointments.

07.3 HEFCE Recurrent Grant 2010-11

Council RECEIVED a verbal report from the Director of Finance on the HEFCE recurrent grant for the academic year 2010-11. The University’s grant allocation had been increased by 1.2%, which was a more favourable outcome than the 5% cut that had been anticipated. However, it still represented a real terms cut, given expectations on inflation. Grants for the majority of the sector had seen changes in the range -1% to +2.5% before penalties for over recruitment. It was unlikely that HEFCE would be able to minimise reductions in the core teaching grant in the next two years to the extent that it had in 2010-11, and it was realistic, therefore, to expect that Loughborough’s grant would be cut in real and cash terms in 2011-12 and 2012-13.

10/08 Capital Programme

COUN10-P6

Council RECEIVED a progress report from the Chief Operating Officer, and NOTED the revised Capital Plan as a framework for making decisions on individual major projects, and action taken by Operations Committee. The following points were noted:

(i) The University had received the HEFCE Consultation on Capital Infrastructure Framework (CIF). This had highlighted carbon reduction and improved space utilisation as key requirements for CIF funding.

(ii) There were two Stage 3 Final Project Approvals:

· Hazlerigg Refurbishment. A cost of £3.875M, slightly below the allocated budget, had been achieved and work had commenced the previous week.

· East Park Design Centre. The cost was £21.604M, 13% less than the allocated budget, and work would begin before the end of March 2010.

10/09 Science and Enterprise Park

09.1 Strategy/Vision for the Science Enterprise Park

COUN10-P7

Council NOTED a paper describing: (i) the strategic importance of the Science and Enterprise Park; (ii) the potential benefits to departments of collaboration with tenants; (iii) the history of development; and (iv) the successful completion of SportPark in January 2010.

It was noted in discussion that around 85% of the space in SportPark had already been let. Smaller tenants were being sought to occupy the remaining space.

09.2 Preferred Developer

COUN10-P8

Council NOTED that significant progress had been made in the search for a preferred development partner. Final bids were programmed to be submitted by 7 April 2010, and the Selection Panel would meet on 27 April 2010 to determine which bid to recommend.

Council APPROVED a proposal to DELEGATE AUTHORITY to the Chair to sign a contract with the preferred developer, subject to recommendations from Operations Committee and with the support of the Enterprise Board and Estates Management Committee. This would allow the University to meet its commitment to emda, under the terms of the Funding Agreement, to choose a development partner by the end of May 2010.

Council NOTED that the decision by the Chair was programmed for 17 May 2010.

Council also APPROVED a proposal to DELEGATE AUTHORITY for any consequential amendments to the Funding Agreement with emda that might flow from the development agreement with the developer to Operations Committee.

A correction to paper 8 was noted: The last but two sentence on page three should have read: The recommendation from the Selection Panel will then go to Project Management Board and also to the members of Estates Management Committee and Enterprise Board for approval.

8.3 Lease Surrender – Holywell Park (amended)

COUN10-P9

Council APPROVED:

(i) A recommendation from the Land Strategy Group to accept the surrender of the lease covering National Grid Properties (NGrid) Ltd’s interest in the Charnwood Wing of the Charnwood Building at Holywell Park at a significant premium.

(ii) The transfer of the unencumbered freehold interest from Germanischer Lloyd Industries Ltd (GLIS) for a nominalsum.

10/10 HEFCE Consultations on the Financial Memorandum and Charities Act Regulation Changes

COUN10-P10

Council NOTED that the University had recently contributed to a sector-wide consultation on proposed changes to the Financial Memorandum and on HEFCE’s new role regulating HEIs as charities. Council’s attention was drawn in particular to changes proposed within the draft Financial Memorandum relating to the inclusion of responsibilities of Governors and Chair of Governors, which had implications for the role and responsibilities of Council members. Many of the proposed new requirements were virtually identical to those contained in existing CUC best practice guidance for governing bodies and would not represent a significant change to existing LU practice. However, many institutions saw aspects of the proposals as a threat to their institutional autonomy and further consultation was likely. Once more details were known, Council would receive a full briefing.

10/11 Audit Committee

11.1 Report of Meeting – 11 February 2010

COUN10-P11

Council RECEIVED the report from the meeting of the Audit Committee held on 11 February 2010. It was noted that Audit Committee had received an analysis of the needs, tender process and timetable for securing internal audit services from July 2010, and had agreed that in the longer term some significant changes might be necessary.

11.2 Appointment of Internal Auditors

Council NOTED that Audit Committee had agreed to extend the appointment of KPMG as the University’s Internal Auditors until July 2012.

10/12 Matters for Reports

12.1 Pro-Vice-Chancellor (Research)

COUN10-P12: NOTED

12.2 Pro-Vice-Chancellor (Teaching)

COUN10-P13: NOTED

12.3 Pro-Vice-Chancellor (Enterprise)

COUN10-P14: NOTED

10/13 Chairman’s Report

The Chairman reported on the following meetings which had taken place on 18 March 2010:

(i) Remuneration Committee had considered issues relating to pay and pensions.

· The normal procedures for determining pay levels for senior staff would be followed, but detailed parameters would not be decided upon until July 2010, by which time further financial information would have emerged.

· The tax system as it related to pensions had become more complex in recent years, and there would be a communication to highly paid staff in due course on relevant sources of advice and information.

(ii) Chairman’s Advisory Group had focused primarily on considering the financial prospects for the University.

10/14 Vice-Chancellor's Report

Council RECEIVED a report from the Vice-Chancellor on the following items:

(i) Recent Developments at the University

(ii) Policy Developments for HE in the UK

COUN10-P15

(iii) National Pay Negotiations

The following matters were noted in particular:

· It had been announced on 2 March 2010 that the AstraZeneca site in Loughborough would close by the end of 2011. This was a very serious economic blow for Loughborough and the East Midlands as a whole, as a large number of jobs would be lost to the area, and Council noted its concern for all residents and staff affected by this decision. The University was part of an economic task group, and would also carefully monitor developments for potential impact on the Science and Enterprise Park.

· The University had responded positively to an invitation from the Olympic Park Legacy Company to be involved in a feasibility study relating to the proposed establishment of a centre for higher educational activity on the 2012 London Olympics site. The proposal offered potential opportunities for the University to extend its access to the international student market, to develop partnerships with overseas institutions with similar interests, and to engage in other activities in the capital. Council would receive regular updates on progress.

· The next phase of national pay negotiations was shortly due to start, and Council AGREED that Loughborough should be part of the national negotiating process.

10/15 Appointment of Chair of Council

COUN10-P16

Council RECEIVED an update from the Appointment Working Group for the next Chair of Council. The long list of potential candidates had been reduced to two, and it was anticipated that the Working Group would shortly be in a position to recommend an appointment.

10/16 Nominations Committee

16.1 Council APPROVED revisions to the Terms of Reference of Nominations Committee.

COUN10-P17

16.2 Council APPROVED revisions to role and duties of the Chancellor.

COUN10-P18

16.3 Council APPROVED the re-appointment of Ric Parker as a co-opted member of Council until 31 July 2013.

16.4 Council RECEIVED the report from the meeting of the Nominations Committee held on 26 November 2009.

COUN10-P19

10/17 Senate

COUN10-P20 & COUN10-P21

(This item was unstarred to receive tabled paper COUN10-P21). Council RECEIVED the reports from the meetings held on 27 January and 3 March 2010, and:

17.1 APPROVED Programme Proposals.

17.2 APPROVED the establishment of the Design Research School.

COUN10-P22

10/18 Health, Safety and Environmental Committee - Constitution

Council APPROVED amendments to the constitution of the Health, Safety and Environmental Committee to remove the post of Pro-Vice-Chancellor from the membership of the Committee.

10/19 Membership of Committees

COUN10-P23

Council NOTED membership of Council Members on Committees.

10/20 Radiation Protection Officer’s Annual Report

COUN10-P24

Council RECEIVED the Radiation Protection Officer’s Annual Report.

10/21 Reports of Committees

Council RECEIVED reports from the following Committees:

21.1 Advancement Committee – 10 February 2010 [COUN10-P25]

21.2 Enterprise Board – 9 December 2009 & 10 February 2010 [COUN10-P26]

21.3 Estates Management Committee – 5 November & 14 December 2009 [COUN10-P27]

21.4 Health, Safety and Environmental Committee – 17 February 2010 [COUN10-P28]

21.5 Performance Monitoring Group – 19 November and 1 December 2009 [COUN10-P29]

21.6 Student Experience Committee – 18 November 2009 & 24 February 2010 [COUN10-P30]

21.7 Costing and Pricing Committee – 13 January 2010 [COUN10-P31]

10/22 Date of Next Meeting

Thursday, 8 July 2010 (1.30pm)