1. Estimates 1998/99
The Bursar introduced a revised budget for 1998/99 which showed a forecast out-turn (surplus after transfers) of £334k. A cash flow forecast was also presented.
International student recruitment at undergraduate level had been down by some 55 students against 1997 (paper RES98-P46 refers). A loss of income of £500k had already been budgeted and provided returning student numbers held up, there would be no significant change in the forecast out-turn. The figure for research grants and contracts was based on Faculty business plans drawn up during the spring. It was to be hoped this might increase, as income from this source had been £17.5M in 1997/98; signs were promising, but even so the bottom-line would not change significantly because of the effect of direct costs.
The Residential Organisation was facing a potential loss of £250k from empty rooms in student halls but hoped to offset this by improvements in other areas of its budget. Members expressed concern at the situation. Exchange students had been told they could not be allocated rooms in hall as there were no vacancies and the Students’ Union had spent a lot of time and effort in helping students to find off-campus accommodation in the town. The student members were concerned that the loss of income should not be passed on to students through higher hall fees. It was reported that the SPVC had been asked to investigate the situation and bring forward proposals to avoid any recurrence in the future. The Committee asked to be updated at its next meeting.
As indicated in the paper, the accounting treatment of depreciation on fixed assets inherited from LCAD was under discussion with the auditors and might result in a reduction of some £100k in the costs currently shown, depending on outcome.
Attention was drawn to the fact that the budgeted surplus was less than the figure of £2M which Council had agreed at its July 1998 meeting should be allocated from current income to the building fund on an annual basis. The transfer to the building fund in the budget presented would be achieved in full only by transfers from reserves. It was noted that the budget had effectively been set before Council had determined its policy on re-building the reserves. It was accepted that Council’s decisions must be adhered to. It was pointed out that the consolidated University accounts would show a net surplus from associated companies of some £600k during 1997/98 and this factor was not taken into account in the budget presented.
The cash-flow forecast reflected expenditure on capital developments which was outside the revenue budget.
The Committee received a progress report on the Engineering Project and attention was drawn to the design modifications that had been made to take account of the suggestions from the Wolfson Foundation. Estates Management Committee had recommended approval of the revised design and planning permission was being sought.
The costs for the revised scheme were now estimated at £15.5M. A contingency sum of £250k was also proposed. The University contribution would be £10.67M.
The procurement route proposed for the project meant that work would be tendered in packages over a period. Council would need to be satisfied that a reliable budget could be established before giving authorisation for the procurement. It was proposed that a final decision be taken at meetings of this Committee and Council in February 1999 and that in the interim design work should continue so that firm tenders for approximately 60% of the estimated costs of the project could be presented by that time. Whilst the remaining costs would still be independent professional estimates, the proportion tendered by then should give a clear indication of the state of the construction market and a guide to the reliability of the remaining estimates. The Committee was invited to recommend the release of further funds to pay for the additional design work and preparation of tender packages: because the total funds so released would exceed £1M, this would require Council approval. It was noted that the Chair had already authorised additional expenditure on fees up to a maximum of £100k on behalf of the Committee pending the current meeting.
The question was raised whether Council approval would be sought at the same time for any aspect of Centre Site Phase 2, which was part of the wider strategy. It was noted that a report on the Centre Site Phase 2 had been presented to the Estates Management Committee, and early cost estimates were in the region of £3M, excluding the redevelopment of the AAETS building which was not essential to the fulfilment of centre site requirements. Whereas this figure was significantly in excess of the sum earmarked, there were good prospects of raising the balance from external sources including HEFCE initiatives. It was important in considering the Engineering Project not to lose sight of the larger picture, but it would be a little while before the academic strategy for the development of the centre site was complete and it would be premature to put forward any scheme at the present time.
A member entered a plea that an accurate estimate of the costs of furniture and fittings be included in the budget for any building development.
It was RESOLVED to RECOMMEND to Council:
This work would be necessary to bring the project to the point where building could begin. It was noted that Council would also be invited to appoint a small group of its members to monitor the progress of the procurement process.
This item to be treated as commercial in confidence. Abridged Minute
The Committee received and considered a report from the Finance Systems Project Group and a presentation from the Project Manager.
The Finance System would be a vital first step but only part of the University’s potential Enterprise Resource Planning Strategy for the future, which would extend to other systems.
The live running date for the new system was 1 August 1999. In response to queries from members it was noted that there would be no parallel running: the new system would be pre-tested around existing systems in June/July 1999 so that it was proven before it went ‘on-line’. There would be significant training implications, both in terms of systems training and financial management training, but the latter particularly would postdate the installation. Written input was noted from the Chair of Council: it was essential to tie the chosen supplier down tightly; the University’s specification must be water-tight; operation of the new system must be proven before going on-line; and contingency planning was needed. Consultation with existing users would take place as the choice between the two preferred suppliers was determined.
It was RESOLVED:
The Committee received an update on capital developments from the Bursar and Finance Officer.
It was noted that three new projects had been included in the plan: the new finance system, the enterprise resource planning system and additional playing fields. Although Forest Court redevelopment was included, it was possible this might be progressed via a Private Finance Initiative scheme, and it would not then require funding as shown.
It was emphasised that both the finance system and the enterprise resource planning system would be expected to result in process improvement savings. The same applied to the current pilot of purchasing cards: it was essential that the benefits were realised in real terms.
In response to a question, the Committee was informed that the Athletics Centre project would provide for the extension of the sprint corridor and the re-laying of the floor of the PE Centre to take running spikes.
It might be necessary to include at a future date plans for extending Burleigh Court. A feasibility study was being undertaken in the context of other developments at the west end of the campus. The case would have to be fully justified within the business plans for Burleigh Court.
Attention was drawn to the phasing of long-term loans which meant that annualised servicing costs would marginally breach the HEFCE 4% threshold in 2000/01 and 2001/02 on current forecasts.
The Committee considered proposals concerning 1999/2000 UK/EU undergraduate intakes. It was proposed in effect that the approved Faculty targets for 1998 be retained for 1999. It would be open to Faculties to consider virement between their departments if desired. The Pro-Vice-Chancellor (Teaching) informed the Committee that the Student Admissions and Recruitment Team would be giving strategic consideration to the distribution of student numbers across the University as part of the current planning round.
It was pointed out that the early statistics on the 1998 intake position had suggested that the University was about 3% above MASN; subsequently the figures had settled at 1.5% above MASN. If this ‘leakage’ could be anticipated it should be taken into account in setting initial targets which are designed to achieve the desired final targets for the December census point.
On the understanding that the overall distribution of numbers would be reviewed, it was RESOLVED to RECOMMEND to Senate that the proposed intakes for 1999/2000 be approved as set out in the agenda paper.
Secretary's Note: Action has been taken since the meeting in the light of paragraph 2 above and revised targets are recommended to Senate with the approval of the Vice-Chancellor on behalf of the Committee.
The Committee noted the nineteenth report of the Sub-Committee.
The Committee RECOMMENDED to Council that approval be given to the proposals of the Estates Management Committee concerning the carrying and wearing of identity cards by staff and students and APPROVED other recommendations of the Committee from its meetings held on 18 August and 15 October 1998 as set out in the agenda papers.
Secretary's Note: The recommendations in respect of Identity Cards appear elsewhere on the Senate agenda for note.
The Committee RECOMMENDED to Council that the fee remission policy previously in place in LCAD in respect of FE students should continue.
The Committee noted the nineteenth report of the Sub-Committee.
The Committee noted reports from the Estates Management Committee meetings of 18 August and 15 October 1998.
The Committee noted reports from the ACE Monitoring Sub-Committee meetings held on 17 June and 6 October 1998.
The Committee noted a report.
The 1998 Financial Forecasts as submitted to HEFCE were noted.
November 1998