Transparency data

SLC Board meeting minutes November 2022

Updated 3 March 2023

1. Attendees

1.1 Present

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

• Chris Larmer (CL) - Chief Executive Officer

• Mary Curnock Cook (MCC) - 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)

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

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

• David Wallace (DW) - Deputy Chief Executive Officer

• Audrey McColl (AMC) - CFO

• Gary Womersley (GW) - Company Secretary

1.2 Also in attendance

• 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 for the Economy NI (by videoconference)

• Stephen Campbell (SC) – CIO (by videoconference from Glasgow Boardroom)

• Paula Sussex (PS) – Acting People Director

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

• Derek Ross (DR) – Executive Director, Programme Director HE/LE Reform (by videoconference)

• Jackie Currie (JC) Interim Executive Director Business Operations (by videoconference)

• Margaret McMullen (MMC) – Director of Finance (for item 5.2 only) (by videoconference)

• 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 5.1 only) (by videoconference)

• Adam Treslove (AT) - Head of Corporate Affairs (for Item 5.1 only) (by videoconference)

• Ash Marston (AM) - Head of Infrastructure and Operations (for item 6.3 only) (by videoconference)

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

• Paula McEvoy (PMC) – Head of Repayments Strategy and Insight (for item 6.2 only) (by videoconference)

• Nicholas McDermott (NMC) – Senior Policy Lead (for item 5.1 only) (by videoconference)

2. Apologies

• Morven Spalding (Executive People Director)

• Paul Kett (DfE)

• Sinead Gallagher (Welsh Government)

• Laura Irvine (NI Government)

3. 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.

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

PL welcomed everyone to the meeting, including the new Interim Executive Director of Operations, Jackie Currie.

PL also noted that it was CL’s first Board meeting as CEO.

Apologies were noted from MS, PK, LMC, and SG.

AW declared that he had been appointed Visiting Fellow of All Souls College, Oxford.

PL noted that since the October Board meeting he had met the Secretary of State for Education, Gillian Keegan MP and had discussed the security of SLC funding and LLE issues. Additionally, there had been a meeting with Baroness Barran MBE, Minister for the School System and Student Finance.

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5. Strategic items

5.1 CEO Report

AT, NG, and NMC joined the meeting. During this item DW and AS left to attend a Ministerial meeting, re-joining the Board during the CFO item.

CL introduced the CEO Report, noting that he would focus on the themes of customer, colleague and shareholder.

Customer

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CL noted the recent CSAT Deep Dive and thanked the Non-Executive Directors who had taken part.

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Colleague

CL explained that pay was a key issue for the Executive Team.

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CL noted that PCS had achieved the required threshold in the industrial action ballot, and a majority in favour of strike action within SLC. SLC continued to monitor the situation and the Business Continuity Team was engaging key shareholders across the organisation to understand the likely impact.

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MCC noted the continuing level of attrition within the Change team, and that nevertheless the SLC headcount had increased overall. But there had nevertheless been an increase in numbers across SLC because of recruitment to other posts.

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5.2 CFO Report

MMC joined the meeting.

AMC introduced the CFO Report noting that, using the October reported forecast as a base, a risk adjusted forecast had been prepared for ELT which modelled both risks and potential solutions. The DfE FY2023-24 funding commission was expected imminently, including financial planning guidance and details of any proposed efficiency targets. Indications were that DfE would expect a return mid-December, and in preparation SLC had commenced a range of financial planning activities.

AMC noted that there were emerging cost pressures following the Q2 Deep Dive. Most of the pressure was in the Capital budget, and SLC had closed the Admin gap by £1.4m. She noted the cost pressures in GDPR but that solutions were becoming clear and there was funding in place. The increased contact pressure in Operations was being managed with a further £400k being allocated. Despite these pressures, AMC remined confident that SLC would remain within its APRA financial targets.

CM welcomed the approach to the FY2023-24 budget and noted that longer term planning would be beneficial, even if shareholders did not require this. AMC noted that this was being done, based on the CSR numbers and with efficiency assumptions built in.

PL commended the precision of financial planning and asked DfE about the prospects of the additional £20m in funding received this year being baselined. AS confirmed that baselining the additional £20m was a priority for DfE as it allowed SLC to invest in systems in order to ensure the provision of good quality student finance. PL noted that there was a strong case and when the FY2023-24 budget came to the February Board, he was keen to have assurances on SLC’s capacity to spend the £20m.

In summary PL noted that the Board took significant assurance from the CFO Report and looked forward to the February CFO paper setting out a longer-term perspective and SLC’s capacity to spend. PL asked for more agenda time be allocated to CFO at the February meeting to enable a fuller discussion.

ACTION: February 2023 CFO Report to include the longer-term perspective and capacity to spend. Extra time to be given for discussion at the February Board meeting.

MMC left the meeting.

6. Papers for Noting / Reports from Committees

6.1 RemCo Chair Report

AW introduced the RemCo Chair Report noting that the meeting on 10 November had included staffing changes, the RemCo dashboard, pay and reward, and a discussion on EDI. AW noted that a new pay case would be top of the Committee’s agenda in FY2023-24.

The Board took assurance from the RemCo Chair Report.

6.2 Directors’ Reports

7. Academic Cycle Annual Review AY2022/23

JC introduced the Academic Cycle Annual Review noting that supporting the cycle was a cross-SLC effort. In AY2022/23 there had been an unprecedented volume of late applications, in addition to a volatile clearing cycle. Overall, volumes had been comparable to the previous year, and this had meant pressure had been felt in contact channels. JC noted that there had been a lot of progress in delivering self-service, which had already helped alleviate pressure in contact but there was more to do as we embedded Evolve and consequent new ways of working.

Despite the challenges, JC confirmed that SLC had made significant progress in flattening the peak and average wait times were significantly reduced. A2P CSAT had also increased. JC noted that collaboration across SLC had made this possible – Repayment resource had been flexibly deployed and the system stability enabled by TG meant a much smoother process for customers and colleagues. Success had also been enabled by Operations leadership, with a focus on Building Better Together.

JC noted that the forward plan, coming to the February Board, would draw out the key dependency on funding to continue to improve the A2P operation. Improvements to enable channel shift and increase operational efficiency were reliant on funding being available.

Non-Executive Directors commended the report, noting their pride in what SLC had achieved. MCC asked if CEM was delivering as expected and enabling SLC to drive down demand. CM was keen to understand what was next and whether SLC understands what staff do by product. AW asked if SLC was speaking to the sector to understand fluctuations in application volumes. GP noted the increased volitivity and unpredictability in the cycle, and if this was the new normal, suggested it would make the argument for a nimbler workforce more compelling. PL noted JC’s reference to funding to drive self-serve and asked if this would mean an increase in Chatbot functionality.

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JC and CL responded that CEM was working and it was an heroic effort to roll it out with 2 out of 3 channels working well and delivering for customers and colleagues. A mix of functionality and behavioural change was needed to continue to make progress, with self-serve needing to be better than telephony and for customers to be aware of this. CL noted that he and DW had ‘walked in the customer’s shoes’ to get a real sense of the feel of self-serve. In terms of what was next, this linked to the point raised by RR and was explored in section 7.3 of the paper. CL noted that the Customer Strategy sets out what comes next, with increased automation and self-serve being key. The functionality of the Chatbot would increase, and SLC were on a journey with this. It was also critical to automate guidance on IVR to ensure customers were guided to the right channel for them. The move from task to case management was also a critical next step with DSA provision being the starting point.

DW noted that CEM was a breakthrough for SLC, bringing customer information together in one place. SLC had to fix current processes too, to better orchestrate correspondence, and this was not straightforward. SLC was clear on what it wanted to achieve but DW noted the number of new demands and that within current budgets and capacity constraints, it was not possible to deliver everything.

CL summed up the stages SLC was working through: stage 1 was delivering CEM; stage 2 was channel shift, self-serve and containment; stage 3 was a further step change with systemic policy simplification linked to LLE. CL underlined that the need for simplification was a barrier to delivering further benefits

CL noted that no one had the answers on the fluctuations in application volumes but SLC was working with the sector to try to understand what was driving the change.

In relation to product simplification and knowing what colleagues do by product, DW referenced an earlier piece of work carried out by McKinsey. It looked at which products cost more and concluded that to lower costs, products would need to decrease by volume and simplification would need to increase. Since this work was carried out, complexity had increased, with DW noting that the system has inherent cost.

JC concluded by addressing the point about a more nimble workforce. JC noted that this would be progressed via the multi-skilled Student Finance Officer (SFO) role. The plan was to develop a more highly skilled workforce at the same time as moving towards automation and digitisation. Operations colleagues were embracing the move to SFO which was seen as delivering clarity and enabling ownership of the end to end customer journey.

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In summary PL noted the Board’s enthusiastic recognition of SLC’s achievements to flatten the peak, reduce average waiting times and have more applications ready to pay earlier than in previous cycles.

PL noted that JC’s paper had set the scene for the forward look paper in February, and he was keen to see the alignment between the A2P plans and the budget.

The Board took significant assurance from the Academic Cycle Annual Review AY2022/23.

8. Repayments Biannual Update

PMC joined the meeting.

BMC introduced the Repayments Biannual Update noting that in addition to the usual update, the paper covered key learnings and where it would be possible to drive improvement via additional investment.

PMC highlighted that the paper included the forward look that the Board had requested in April, and also addressed the expected verified customer ceiling. PMC noted that the forecasts for future years were dependent on investment and made a compelling case for invest to save.

PMC explained that the customer verification rates were the highest ever recorded but that the projected future increases were based on data quality fixes which were, in turn, dependent on funding. She also noted that data set out on expected ceilings for repayments were based on current methodology and if sanctions were applied, ceilings could be expected to increase.

In relation to Online Repayment Services PMC noted that customer calls had reduced due to extended online services. The reduced requirement to service calls had enabled Repayments to provide resources to Operations and help flatten the peak. Additionally, the number and value of credit balances, where a customer had overpaid, had reduced as process improvements had been made. GP highlighted that in the financial sector dormant accounts were written off after 15 years, with the funds going to good causes. BMC noted that this was an ongoing discussion with DfE and if the values could be written off it may be possible to report on them differently to mitigate the negative effect they have on the overall figures.

PMC highlighted that improvements in direct collection rates had been achieved against a flat cash budget. Collection rates were forecast to rise to £115m in FY2024-24, however in the same year new debt was expected to exceed £230m. Applying sanctions could help drive an increase in the amounts of overseas arrears collected but this would also require investment.

DW noted that Repayments was performing very well and that the focus on CSAT scores risked detracting from this. GP welcomed this observation, commenting that it was important to recognise the positive performance of Repayments.

MCC reflected on the Deep Dive on CSAT, noting that benchmarking could give a better sense of what the target performance should be, giving the congestion charge as a potential comparator.

AW highlighted the potential for sanctions, which could cause an uptick in compliance but would have to be financially viable. BMC agreed that sanctions could have a positive effect on overseas collections.

RR noted the potential submission of an invest to save case, queried the timing and asked what it would take to make this a shareholder and ministerial priority. AH explained that the CSR had set out SLC’s maximum capacity for change and if further capacity was needed, this would need to be explained. AH noted that with the number of competing priorities, there would need to be a credible story on additional capacity to deliver improvements in repayments.

ST noted the potential for increased ROI with increased verification rates. PS noted that SLC had never fully pressed the case for investment in repayments, so awareness of the ROI would not be clear to HMT. AS suggested that SLC set out how to distribute capacity against ROI, showing how X invested would lead to Y return. AS confirmed that HMT was aware that there was a case for investment leading to greater yield but are not aware of the exact amounts. BMC explained that two invest to save cases had already been written, which included ROI. PL noted the Board’s interest in taking an invest to save case forward.

ACTION: Update on a Repayments invest to save business case to come to a future Board meeting.

GP noted, in relation to vulnerable customers, that more people were struggling and getting in touch with SLC. He suggested that it would be beneficial if SLC was proactive in showing that we are listening. BMC explained that work was ongoing with DW and the CX team, with specific scripts being created for vulnerable customers with input from the Money Advice Trust.

In summary PL commended the excellent paper and endorsed the development of an invest to save business case which brought together the threads of the discussion. The Board took assurance from the paper.

PMC left the meeting.

9. ###Update on Glasgow City Centre Relocation

MC and AM joined the meeting.

SC introduced the Update on Glasgow City Centre Relocation noting the topping out ceremony in September and that the building was designed to support SLC’s Blend proposition. SC confirmed positive progress though there was a budget challenge. MC highlighted that the actual build was running five weeks ahead of schedule and that SLC was currently out to tender for the internal fit.

AM explained that the data centre exit was extremely complicated and had to be coordinated to ensure service was maintained. AM assured the Board that every stage of the transition would be done against a precise set of pre-tests and checks, with PL noting that he had confidence in the precision of planning, given previous examples which the Board had seen.

MCC noted that the data centre exit was a huge undertaking, and that managing risk was key. AM agreed that risk management was a priority, and that resilience was being built into the transition to minimise risks where possible. It was noted that a Business Continuity and Disaster Recover Assurance Report would be presented at the January ARC which would outline SLC’s approach to risk management in respect of the data centre exit.

In terms of staff engagement, PS noted that the Colleague Representative Group (CRG) had been active in planning the new building. MC explained that the CRG had been involved in the design and that there was excitement for the move.

In summary PL noted that the plans were being well managed and that the Board took assurance from the paper and discussion. The January ARC would consider risk management of the Bothwell Street data centre exit in more detail.

MC and AM left the meeting.

10. Governance

10.1 Minutes of the meeting held on 31 October 2022

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

10.2 Matters arising from previous meetings

The matters arising document was approved as accurate.

11. Any other business

12. PL formally thanked PS and BMC on behalf of the Board for their valuable service to SLC. He also recorded thanks to PK, who was leaving DfE on 9 December, for his stewardship and the interest he had shown in SLC’s progress. PL noted the Biannual Shareholder Meeting that would take place the following week and noted that he would circulate his Chair Report.

ACTION – Chair’s BSM Report to be circulated to Non-Executive Directors.

PL noted that there would be a Value for Money NED session before the end of the financial year in addition to an overview of OCG.

12.1 Date of Next Meeting

The next meeting was confirmed as being at 10:00 am on Tuesday 28 February 2023 by Teams with the executive hosting from the Glasgow Boardroom.

There being no other business the meeting ended at 12:30 pm.