Transparency data

SLC Board meeting minutes 31 March 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

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

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

• Lauren McNamara (LM) – Scottish Government (by videoconference)

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

• Laura Irvine (LI) - NI Government (by videoconference)

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

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

• Stephen Campbell (SC) – CIO (by videoconference)

• 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 (for Item 4.1 and 4.3 only) (by videoconference)

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

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

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

• Don Campbell (DC) – Head of Data Centre of Excellence (for item 6.2 only) (by videoconference)

1.3 Apologies

• Paul Kett (DfE)

• Sinead Gallagher (Welsh Government)

• Andrew Wathey (Non-Executive Director)

• Derek Ross (Executive Director)

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 AW, DR, PK, and SG.

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There were no declarations of interest.

PL noted the CEO Report was the slim version which would now be presented at each meeting as standard given that the work plan was now in place and the Board was receiving regular updates from Directorates.

PL highlighted that GP and MCC had attended a meeting of the Student Finance Customer Panel on 1 March and that he would ask them to comment and share thoughts at the end of the meeting.

PL noted that there had been a meeting on Complaints, Appeals and Independent Assessor activity which had been attended by three non-executive directors and that there would be an update via a summary paper being brought to the April Board meeting.

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 highlighted that the rollout of Blend continued and that over 60% of colleagues had now been in the office at least once. The Estates and IT teams had continued to effectively and safely manage site capacity whilst implementing technology to enable blended working. It remained important to support managers through Blend whilst also reimagining the office in a hybrid environment.

Finance

PS explained that AMC and her team had been working towards the completion of the 2021-22 financial year and that everyone had done a great job in closely managing the budget. Key business planning items for 2022-23 were scheduled for discussion on the agenda.

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Ukraine

PS noted that in response to the invasion of Ukraine, SLC had taken a number of steps to ensure that impacted customers and colleagues were appropriately supported. Additionally, the TG Security Team were carrying out enhanced monitoring in terms of the cyber threat landscape.

PL noted that PS would include comment on the steps that had been taken by SLC on Ukraine in the ministerial update.

LLE and HE/FE Reform

DW noted that work to support the summer launch of the HE Short Courses trial was progressing to plan with Higher Education providers due to commence populating the course database from May.

DW also noted following the recent publication of repayment changes and consultation documents, SLC was now commencing high level estimation and sizing work and was waiting on a formal commission, and confirmation of funding, from DfE to ramp up activity.

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Pay Strategy Update

MS noted that the Executive Team had met several times to discuss the pay strategy and were in agreement on the need to address the salary of lower paid employees as a key priority.

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Corporate Performance Dashboard (CPD)

MCC noted the movement on Capital at the end of July on page six of the CPD and sought confirmation that this was related to the impact of the accounting policy change for Software as a Service (SaaS). AMC explained that the change in accounting policy required SaaS to be treated as an expense rather than being capitalised.

RR noted that further explanation from CL on the backlog would be useful. CL explained that the graph on page two of the CPD noted the recruitment forecast, and that SLC was currently below the worst-case scenario. CL noted that the recruitment activity was on the right trajectory due to significant HR activity. However, CL predicted that the 2022-23 academic cycle would be just as challenging as 2021-22.

GP highlighted the 24% attrition rate in the People Directorate and noted that some background on this would be helpful. PS explained that as the total headcount was around 60 colleagues, any attrition resulted in larger percentages.

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GP noted that there had been around 50,000 chatbot interactions but that the system was only able to deal with a few questions, suggesting that this would not lead to great customer experience. CL noted that 63% of customer interactions were being contained with the chatbot which was higher than anticipated. There was more work to be done to understand the data from the customer perspective so that improvements could be made.

PL noted the cost per customer metric on page two of the CPD. PS noted that this would be coming to the June Board as a substantive item with a focus on the cost of technology reducing manpower.

The Board took assurance from the CEO Report

AT and NG left the meeting.

4.2 CFO Report

DD and MCM joined the meeting.

AMC introduced the CFO Report noting the revised APRA control totals that were set out in table 2 of the report. AMC noted that the £0.5m Admin funding had now been released by DfE as SLC had demonstrated that it was required in 2021-22.

AMC noted the forecast underspend of £1.8m on Evolve and that DfE had confirmed there was no requirement to return any underspend at the end of the financial year.

AMC highlighted the latest forecast position at section 4 of the report. Risks identified as part of the forecast review process had reduced the Admin forecast to approximately breakeven.

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AMC explained that the core forecast indicated an overspend on Programme of £1.1m and that this was broadly in line with the position reported in January.

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AH welcomed the report on the end of year position noting the progress achieved by AMC and her team. PL agreed.

The Board took assurance from the CFO Report.

4.3 Business and Financial Planning including the SLC Budget FY 2022-23, Draft APRA Letter, and the Corporate three-year plan FY 2022-25 and Annual Business Plan FY 2022-23

PS introduced the Business and Financial Planning item noting that draft Corporate and Business Plans had been presented to the Board in February. HB explained that comments from the February Board meeting had been incorporated into the combined Corporate and Business Plan which was presented for approval. Approval of the Plan, from the Board and DfE, was important as it would allow SLC to set objectives across the business and communicate these to colleagues, and to publish the Plan externally. PS thanked ST for the deeper review of the plans he had undertaken and for the feedback provided.

AMC introduced the budget paper by noting the gap between the SLC budget and the available funding from shareholders. AMC noted the importance of maintaining SLC expenditure within tolerances and that there were spend controls and tracking in place. AMC assured the Board that any decisions on expenditure having to be slowed down or stopped would be made through agreed management processes and the ELT would ensure any decisions would be considered in terms of value for money.

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PL noted that the Board would require budget assurance throughout the year, and that CM would stay in touch with AMC and PS to ensure clarity on prioritisation decisions. CM explained that having been through the plan in detail she felt that it was as good as it could be but was not without risk.

MCC highlighted the current inflation rate and asked if this had been properly considered when developing the 2022-23 budget. PS noted that a significant portion of the budget was the pay remit, which was not likely to match inflation, and third party spend, which was indexed. She noted it may be possible to split out the impact of inflation where it was known and controlled and where SLC was potentially exposed.

In relation to a question from GP, PS noted that a large part of the budget was geared to modernising the technology estate and funding availability would impact the rate at which TG could deliver. SC highlighted the improvements that had been made over the last two years, with more capability, control and stability. Lack of sufficient funding would slow further progress. DW explained that budget prioritisations were not a binary choice but were about sequencing and prioritisation. The ELT had worked on this together to reach this point and were in agreement.

GP noted that the recent ARC meeting had been informed of the budget related delay to the CLASS access project and asked how many other risk-related initiatives were not funded in the plan. BMC advised that the CLASS project was actually in-flight and that it would continue. BMC and AMC were working on a paper for DfE on the impact of projects that were unable to be funded at present and agreed to share this with the Board when it was ready.

ACTION: AMC and BMC to share paper being prepared for DfE on impact of project prioritisation with Board

ST noted the importance of balancing risk and benefit and noted that SLC should ensure it was leveraging LLE effectively and looking at contractor costs.

RR noted that decisions on prioritisation could have a significant impact later on and that this should be acknowledged. CL noted that the funded and non-funded projects would have an impact on customers, but the Board could be assured that SLC had done its best to protect customers.

AH acknowledged that SLC has set out a strong case for the further funding of £21m required to close the gap and that DfE had been working closely with AMC and PS on the budget and the shortfall and that DfE finance directors had welcomed the early engagement and transparency. DfE was unable to allocate additional funding at this time and therefore the approach to prioritisation being outlined by SLC was the right one. AH noted that DfE would have more certainty on funding in due course, and may be able to make some of this available to SLC, though this would likely come with conditions, including the recycling of any underspends.

PL summarised the discussion noting that the Board was content to approve the Corporate and Business Plan and that continuity of goals and SLC’s vision and mission was important. Board approval would allow SLC to communicate the Plan internally, but DfE would need to provide approval in order for the Plan to be published externally.

PL suggested that he, ST and MCC do a final review of the Plan for any minor edits.

ACTION – final round of edits from PL, ST and MCC to be sent to HB one week after the Board meeting.

In relation to the budget, the Board was content to proceed on the basis set out by AMC. The Board had taken assurance from the process adopted by SLC, and that structures were in place to allow priorities to be geared up or down, depending on availability of funding. PL noted that the Board would continue to carefully monitor the position via the CFO Board reports.

The Board noted the SLC Budget FY 2022-23 and approved the Corporate three-year plan FY 2022-25 and Annual Business Plan FY 2022-23.

DD and MCM left the meeting.

5. Papers for Noting / Reports from Committees

5.1 ARC Chair Report

CM introduced the ARC Chair Report noting that the Committee met on Tuesday and had heard that the Annual Report and Accounts process was on schedule to be completed pre-recess.

CM noted that GIAA was on schedule to complete the internal audit plan by the year end and that the Head of Internal Opinion was likely to be moderate. CM explained that there had been low error rates reported for SFE and SFW processing and so ARC had encouraged management to consider whether applying less effort on this and focusing resources elsewhere might overall deliver greater value.

CM noted that DFE’s Framework Document for SLC had still not been agreed with HMT and that DfE were escalating this. She also noted the new Assurance Framework which ARC had agreed and which would add value.

CM noted the Legal update that had been presented at ARC and that the general message was that issues were being well managed and resolved early.

The Board took assurance from the ARC Chair Report.

5.2 RemCo Chair Report

GP introduced the RemCo Chair Report in AW’s absence noting that the CEO end of year appraisal and objectives for 2022-23 had been discussed and approved in a closed session.

GP explained that Blend had been covered at the meeting, including the changing work environment, and pulse surveys which helped SLC understand colleague sentiment towards Blend.

GP highlighted the Pay Strategy intention to support the lowest paid staff which the Committee supported. PL also recorded the support of the Board on the low pay issue.

GP advised that the RemCo Dashboard had been presented by the Executive Director for People who had been supported by Head of Data Centre of Excellence who had helped discharge the action to consider developing some metrics further but without duplicating what is included within the Board CPD.

The PRP distribution for 2021-22 had been discussed and supported at the RemCo meeting. The distribution was the same as previous years but would be reviewed for next year.

GP noted the SLC Pension Update that had been presented at the meeting and that all staff had now been transferred to the Civil Service Pension Scheme.

GP explained that the annual Gender Pay Gap and Equality, Diversity and Inclusion reports had been made available to the Committee. RemCo noted that there were some areas where attention was required and that the issues were high on the ELT agenda. SB confirmed that these were available to Board members on ibabs.

The Board noted the RemCo Chair Report

6. Directors’ Reports

6.1 Change Delivery and Benefits Realised

BMC introduced the Change Delivery and Benefits Realised item noting that the report provided an update on progress against objectives for the Change Function in the last year. Performance of the programme depended on resources and stability, and this had been a significant challenge with increased attrition over the year.

BMC explained that against a challenging backdrop the Change Function had made significant progress. This had been through: the active development of people; formal and informal training and development; by leveraging a detailed process improvement framework; standardising operating procedures; improving project management disciplines and controls; better data; and, focusing on the key aspects of project delivery that will deliver benefits, planned outcomes and return on investment.

CM noted that that strong forecasting was beneficial. BMC agreed that more robust forecasting had helped to manage the budget tightly.

CM asked BMC if there had been anything she would have done anything differently. BMC noted that there was a one size fits all approach and that proportionate tailoring would be beneficial. She noted that all projects have dependencies and even small projects can impact large projects if they don’t deliver to time.

BMC cautioned that green-lighting projects was not just about funding but about capacity too, noting current pockets of tension due to limited capacity which had been driven by attrition.

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BMC noted the recent IPA Review which had recommended an increased focus on continuous improvement and that this was a work in progress as the project approach was deep within SLC’s DNA and it would take time to reimagine this approach.

PL noted that three projects were paused last year due to funding and that the benefits of CEM may be coming through more slowly than expected. PL also noted that SLC does not always tell the story of avoided costs because it is counter factual. BMC noted areas where SLC had avoided spending and increased yield, giving the example that Repayments had hit £100m in collections for the first time, as detailed in the CPD.

PL summarised by welcoming the report and the increasing professionalism in the Change Function, which he noted as important as SLC progresses towards LLE. PL noted the link between the Change Function and the budget discussion and the ability to slow down expenditure to live within budget tolerances, as necessary. PL hoped to test the ability to crank up spending in the coming year.

The Board noted and took assurance from paper and discussion.

6.2 Data Centre of Excellence Activity Update

DC joined the meeting.

BMC introduced the Data Centre of Excellence (DCoE) Activity Update. DC had joined SLC in September and would present the plans to execute SLC’s ongoing data strategy.

DC talked to the slide pack, covering the improving data culture, quality of data, collaborative data activity, duplicate customer accounts, and Statutory Repayment Due Date. DC highlighted that he was building capacity and that accurate data was integral to SLC meeting is business objectives.

PL noted that data integrity would be important when introducing LLE.

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MCC noted that the paper told a powerful story but that data governance was not given the prominence she would expect. BMC noted that data governance was a high priority but that the report had been outcome focussed. DC was procuring a data quality tool which would give full line of sight over data governance.

ST noted external interfaces and the value of data across the economy. BMC explained that SLC does currently share data. DC highlighted that he was aligned with other government departments and was on the CDDO Data Council.

AS explained that it would be crucial to get data sharing and governance right in relation to the design of the system for LLE and wider HE / FE Reforms. Getting the governance and processes right would enhance the value of this work. BMC explained that the Change framework was there to ensure that data considerations were embedded in everything that SLC do. BMC noted that there was more the DCoE could do but was constrained by funding.

LI left the meeting.

PL noted that this item should return to Board around the mid-year point and that it would be helpful to hear more on governance and the implications of LLE.

ACTION: Data Centre of Excellence update to come to a future Board meeting.

7. Governance

7.1 Board Effectiveness Review 2022

PL noted that the paper was clear, and that SB would send out the questionnaire following the meeting.

ACTION: SB to send the BER questionnaire to Board attendees.

7.2 Minutes of Previous Meetings and Matters Arising

7.3 Minutes of the meeting held on 30 July 2020

MCC noted an update to her point in the minutes on the currency of funding. The minutes of the SLC Board meeting held on 30 November 2021 were approved as a true and accurate record.

7.4 Matters arising from previous meetings

The matters arising document was approved as accurate.

8. Any other business

8.1 Student Finance Customer Panel

PL noted that GP and MCC had attended a meeting of the Student Finance Customer Panel on 1 March. GP explained that it had been great to hear SLC customers first-hand and he had been struck by the level of engagement. A number of practical points made by the panel members and there had been an emphasis on the importance communication and tone of voice.

MCC echoed GPs comments on the engagement of the panel members. DW agreed that it was important to think about access and SLC would consider further. It was noted that a separate panel had been set up to work through the changes in DSA.

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PL noted that further Non-Executive Director attendance would be useful. DW agreed.

ACTION: SB to send out Student Finance Customer Panel dates to Board attendees.

8.2 Simon Devonshire

PL noted that the meeting marked the departure of SD from SLC. PL thanked SD for his valuable service as an SLC Non-Executive Director and also as Chair of the Evolve Oversight Committee. PL remarked on SD’s focus on helping young people, the importance SD placed on education and how SD’s own experience had shaped how he approached his work with SLC and more broadly.

8.3 Date of Next Meeting

The next meeting was confirmed as being at 10:00 am on Thursday 28 April 2022. PL noted that he hoped to be in Glasgow for the April meeting and the Governance team would be in touch with Non-Executive Directors to discuss their availability for physical attendance.

There being no other business the meeting ended at 1:30 pm.