Transparency data

SLC Board meeting minutes 28 April 2022

Updated 3 March 2023

1. Attendees

1.1 Present

• Peter Lauener (PL) - Chair (by videoconference)

• Paula Sussex (PS) - Chief Executive Officer

• Mary Curnock Cook (MCC) - Non-Executive Director (by videoconference)

• Simon Devonshire (SD) - Non-Executive Director (by videoconference)

• Gary Page (GP) - Non-Executive Director (by videoconference)

• Charlotte Moar (CM)- Non-Executive Director (by videoconference)

• Stephen Tetlow (ST) - Non-Executive Director (by videoconference)

• Andrew Wathey (AW) – Non-Executive Director (by videoconference)

• Rona Ruthen (RR) – Non-Executive Director (by videoconference)

• David Wallace (DW) - Deputy Chief Executive Officer

• Audrey McColl (AM) - Chief Financial Officer (by videoconference)

• Gary Womersley (GW) - Company Secretary

1.2 Also in attendance

• Paul Kett (PK) – DfE (by videoconference)

• Anne Spinali (AS) - DfE (by videoconference)

• Ailsa Harris (AH) - DfE (by videoconference)

• Lorna Caldwell (LC) – Scottish Government (by videoconference)

• Chris Williams (CW) - Welsh Government (by videoconference)

• Laura Irvine (LI) -Department of the Economy NI (by videoconference)

• Stephen Campbell (SC) - CIO

• Chris Larmer (CL) – Executive Director, Business Operations

• Bernice McNaught (BM) – Executive Director, Repayments & Customer Compliance

• Morven Spalding (MS) - Executive Director, People

• Helen Bogan (HB) – Head of Governance and Planning (by videoconference)

• Stuart Brydson (SB) - Board Secretary (Secretariat)

• Nathan Glancy (NG) - Business Manager to the Office of the CEO (item 4.1 and 4.3 only) (by videoconference)

• Adam Treslove (AT) - Head of Corporate Affairs (item 4.1 only) (by videoconference)

• David Derrick (DD) – Financial Accounting Manager (item 4.2 and 4.3 only) (by videoconference)

• Margaret McMullen (MM) – Director of Finance (item 4.2 and 4.3 only) (by videoconference)

• Mark Cassidy (MC) – Head of Estates and Sourcing (item 6.3 only) (by videoconference)

• Anthony Hill (AHI) – Targeted Support Manager (item 6.3 only) (by videoconference)

• Jem Anderton (JA) – Chief Architect (item 7.1 only) (by videoconference)

• Paula McEvoy (PMC) – Head of Repayments Strategy and Insight (item 7.2) (by videoconference)

1.3 Apologies

• Derek Ross – Executive Director, Programme Director LLE and HE/FE Reform

• Lauren McNamara - (Scottish Government)

• Sinead Gallagher (Welsh Government)

• Jonny O’Callaghan – (Department of the Economy NI)

2. FOI Notice

Where asterisks (*) appear, these sections have been excluded from the minutes before placing on the website as the subject under discussion falls within one or more of the exemptions contained in Part II of the Freedom of Information Act 2000 and can be reasonably withheld.

3. Chairman’s Opening Remarks / Directors’ Matters / Declarations of Interest

PL welcomed everyone to the meeting.

Apologies were noted from DR, LMC, SG and JOC. PL noted that, due to another commitment and travel disruption, AW would not be able to attend the full meeting.

PL highlighted that the Board effectiveness questionnaire had been issued to Board attendees following the March Board meeting, with some positive responses being returned. PL requested that everyone make an effort to provide a return.

There were no declarations of interest.

4. Strategic items

4.1 CEO Report

AT and NG joined the meeting.

PS introduced the CEO Report, noting her key areas of focus.

Blend

PS explained that Blend was going well overall. Colleagues who had not been into the office since March 2020 were starting to return and were acclimatising to the office environment. Early results from a pulse survey indicated that colleagues were viewing Blend positively. There was a focus on supporting managers to manage in a blended environment and on reimagining the role of the office. PS noted that ELT were considering how Blend could support colleagues to manage the rising cost-of-living.

PL noted that he was assured by the positive reception of Blend.

Stakeholder Engagement

PS highlighted that she and PL had met with Nadhim Zahawi, Secretary of State (SoS) for Education, the previous week. The SoS had a keen interest in the success of LLE and Short Courses and had suggested that he visit the Bothwell Street offices. PK confirmed that the SoS had proactively raised the possibility of a visit with genuine enthusiasm.

PK also noted that the SoS had been impressed by the exceptional performance of SLC during the COVID-19 pandemic period.

Corporate Performance Dashboard

PS noted that the CPD was the year-end report and that the figures were a huge credit to the team.

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Operational Update

CL explained that the AY2022/23 application cycle was underway. There were currently around 25,000 applications in the processing queue compared to 66,000 at the same time the previous year, so SLC was starting the year in a good position. There had been a slower start with applications, but this had picked up and SLC’s predictions on volumes were so far correct.

CL highlighted the significant recruitment challenges for frontline roles, but that progress had been made by MS and her team.

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GP noted the level of attrition, running at 20% in Operations. CL explained that although attrition may appear high, it was at a level that he would expect in other contact businesses and 20% attrition had been factored into SLC’s planning. Year on year attrition had increased for SLC and so work would continue to mitigate attrition through Employer of Choice and the Pay Strategy.

CL noted that both colleagues and customers continued to be positive about the new CEM channels. There was an increase in workload due to the increased number of channels and CL noted that this was a challenge. SLC continued to drive self-serve, with cross-business efforts to encourage customers towards the new digital channels. This was, however, a cultural shift which would take time.

ST encouraged SLC to look at all options in customer terms, including projects that could be brought forward to help manage demand. PS noted that SLC had done this with One Time Passcodes which cut average call times by 19 seconds. SLC needed more data, however, to be able to make the right choices.

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PK and ST noted the recruitment challenges and the potential impact on operational performance. PK suggested that the Biannual Shareholder Meeting (BSM) in May was used to consider the level of risk.

SLC Framework Document (FWD)

CM asked AH for an update on the current approvals process for the revised FWD. AH explained that although there had been a productive meeting with HMT, some key points were still to be addressed.

Finance

PK noted that 4.17 in the CEO Report stated that capital underspend had been due to the change in the accounting rules but there was, in addition, a genuine underspend. PS agreed that this was the case.

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PL noted that the Board took assurance that SLC’s key issues and achievements were identified and were being suitably managed. The Board took particular assurance from CL’s close monitoring of operational performance.

AT and NG left the meeting.

4.2 CFO Report

MCM and DD joined the meeting.

PL noted the budget meeting that had been taking place in the Boardroom when he arrived at the Bothwell Street offices and welcomed the strong focus of the ELT on SLC’s finances.

AMC introduced the CFO Report noting that the draft outturn position for FY 2021-22 was set out and that it would be finalised once the external audit was complete. The numbers indicated a positive position with SLC ending the year broadly where anticipated. There had been some volatility towards the year end, but the increased level of scrutiny had enabled this to be managed.

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AMC highlighted that a review of the forecast had been carried out by the Lean Team and as a result further improvements would be considered. PL noted the improvements made in the forecasting and that there was a much stronger position in managing the budget.

The Board took assurance from the CFO Report, with PL welcoming the greater focus on managing the budget.

4.3 CFO Budget Update 2022-23

AMC introduced the CFO Budget Update FY 2022-23 noting that the paper laid out the work that had taken place over the preceding two weeks. It was recognised that SLC would need to manage within the allocated funding. AMC had regular monthly meetings with both the Operational and Strategic Finance Directors at DfE which would provide checkpoints to understand the latest DfE funding position.

BM noted the line-by-line review of change projects, with SLC considering scheduling and what activity could be stopped. Hard decisions were being made, with SLC removing items that the ELT did not want to remove.

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PK noted that the SLC and DfE teams had consulted closely over the SLC budget. The improvements in forecasting were recognised and he encouraged these to continue as there was no room for movement on Admin from DfE. PK noted that there was a possible scope for movement in Programme and whilst making no commitments, noted there may be opportunities later in the year. PK also noted that DA splits would need to be confirmed as soon as possible.

CM supported the approach SLC was taking and noted that timing would be critical as making a decision too early or too late could mean that SLC missed an opportunity for flexibility.

ST queried whether elements of the Technology Strategy would be Capital and encouraged a flexible approach where this might be possible with regard to LLE funding. AMC noted that Technology Strategy expenditure could be Capital, but it would be project dependent and that SLC was considering LLE as a building block.

AW joined the meeting.

The Board took assurance from the CFO Budget Update FY 2022-23, with PL noting the different layers of assurance the Board could take on: controls for the year end; the work being done to manage within funding available; and considering timescales for turning activity on and off and not missing any opportunities.

MCM and DD left the meeting.

5. Papers for Noting / Reports from Committees

5.1 Evolve Oversight Committee Chair Report

ST introduced the Evolve Oversight Committee Chair Report noting that the Evolve portfolio RAG status remained amber but was improving. ST explained that the DfE cashable benefits were better than stated in the report, by an additional £14m based on the latest data, and that HMT cashable benefits were also increasing. AW noted that the cashable savings were impressive and that it would be worth asking the minister to write to the Chief Secretary to the Treasury (CST) to point this out. AS agreed and noted that this had already been discussed. It was agreed that AS would judge the appropriate time to send the letter.

ACTION – DfE to draft a letter to the CST noting SLC’s cashable savings, with timing to be determined by AS.

The Board took assurance from the work of the EOC and PL noted that work was underway to extend the EOC remit to cover technology strategy, albeit with a different committee name.

6. Governance

6.1 Board Code of Conduct

The Board endorsed the Code of Conduct.

6.2 Minutes of meeting held on 31 March

The minutes of the SLC Board meeting held on 31 March 2022 were approved as a true and accurate record.

6.3 Matters arising from previous meeting

AH highlighted the shareholder workshop meeting noting that it had been a good session and that outputs would be discussed at the May BSM. There had been discussion on the five to ten year horizon including very busy future academic years and planning and key dates for the DfE reforms. PL welcomed this forward look and noted that it should be reported to the Board following BSM.

ACTION – shareholder forward look to be shared with the Board following BSM

The matters arising document was approved as accurate.

7. Directors’ Reports

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7.1 Technology Strategy Update

JA joined the meeting.

SC introduced the Technology Strategy Update, introducing the new Chief Architect, Jem Anderton.

SC explained that great progress had been made since the Technology Strategy was presented to the May 2020 Board including Evolve deliveries and Disaster Recovery which had lowered corporate risk. The next phase of the strategy involved a different type of change, as TG would now tackle SLC’s legacy estate. SC cautioned that this was difficult work which carried risk.

JA noted that the strategy would leverage the opportunities offered by LLE and lock flexibility and sustainability into SLC’s technology architecture. The two-stream approach would deliver shared services, a strategic user interface and improvements to core transactional systems.

MCC and GP noted that the ‘to be’ state of the technology estate was not clear from the paper. SC noted that some big decisions on the future state had already been made, including that CLASS and LA Portal would not be decommissioned. SC noted that the detail was available and that it would be taken to EOC, which would be extended to oversee Technology Strategy execution.

ACTION – SC to take detail on the future technology state to EOC.

PK noted that further information on the extent to which legacy products needed to be maintained would be useful. BMC noted that anyone who had applied for student finance up to this point would remain in the system for 30 years whilst their funding was still eligible for repayment. PK acknowledged this point but asked about the impact on new loans and whether benefits would be lost if they were issued from the ‘old’ system. It was agreed that this point would be considered at BSM.

GP noted the funding gap for FY 2022-23 and asked how that would be reconciled with delivering the Technology Strategy. SC agreed that there was a challenge but that the two-stream approach provided some insulation.

PS urged the Board to focus closely on the Technology Strategy to ensure its success. Execution would be challenging and would require everyone’s support.

PL noted that the Technology Strategy would be overseen via an expanded EOC and that it would also come to Board, as appropriate.

JA left the meeting.

7.2 Repayments Biannual Update

PMC joined the meeting.

BMC introduced the Repayments Biannual Update.

PMC noted the achievements in Repayments, against a backdrop of flat-cash, a growing loan book and increasing customer numbers.

PMC noted the work done to improve customer experience, including provision of the online repayments service with a direct debit facility for those reaching the end of their repayment schedule.

Efforts to increase the number of customers who had verified their residency and employment status had been successful, with the final percentage for FY 2021-22 reaching 91.19% against a target of 90%.

The final value of direct cash collected for FY 2021-22 was £104.7m against a target of £84.5m and was the highest amount ever collected. PL noted these record figures and suggested they be added to the letter to the CST discussed earlier in the meeting.

ACTION – repayments achievements to be added to the DfE letter to the CST

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CM highlighted that SLC loan book was likely to grow significantly over the next 10 to 15 years and that longer term modelling would be valuable. BMC explained that the workforce plan had a two-to-three-year outlook. If customers were in the right channel, there would not be the need to increase headcount. There was potential, however, to look at longer term scenarios. PL suggested that the next biannual repayments update cover a longer-term forward look, over the next few years rather than five to ten.

ACTION – November Repayments Update to include a longer term forward look

RR asked about the impact of repayments staff supporting the application cycle. BMC noted that she had operated flexible resourcing over the last three years, with the repayments peak happening at different time to the operational peak.

PL noted that CSAT scores had not been discussed and asked that commentary on the year-end position be included in the June CEO Report.

ACTION: June CEO Report to include commentary on repayment CSAT score at the year-end.

PL noted the Board’s appreciation for the best year ever for Repayments.

PMC left the meeting.

Complaints and Appeals Biannual Report

PL explained that, due to timing, the Complaints and Appeals Biannual Report item would be rescheduled to the June meeting.

8. Any other business

No additional business was raised.

9. Date of the next meeting

The next meeting was confirmed as being at 11:00 am on Thursday 30 June 2022 in Darlington.

There being no other business the meeting ended at 13:05 pm.