Transparency data

SLC Board meeting minutes April 2023

Updated 24 April 2024

1. Attendees

1.1 Present

• Peter Lauener (PL) - Chair

• Chris Larmer (CL) - Chief Executive Officer

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

• Gary Page (GP) - Non-Executive Director

• Rona Ruthen (RR) – Non Executive Director

• Charlotte Moar (CM)- Non-Executive Director

• Stephen Tetlow (ST) - Non-Executive Director

• Tash Toothill (TT) – Non Executive Director

• 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)

• Jonny O’Callaghan (JOC) - Department for the Economy NI (by videoconference)

• Jason Dunham (JD) – CIO

• Stephen Campbell (SC) – Outgoing CIO

• Jackie Currie (JC) – Executive Director, Business Operations

• David Beattie (DB) – Executive Director, Change, Data and Repayments

• Derek Ross (DR) - Executive Director, HE and FE Reform

• Chris Cooke (CC) – Interim Executive Director, People

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

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

• Adam Treslove (AT) - Head of Corporate Affairs (for Item 7.1 only) (by videoconference)

• Nicholas McDermott (NMC) – Chief of Staff (for item 5.1 only)

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

• Stephen Baker (SBA) – Director of Policy Design and Change (for item 8.1 only) (by videoconference)

• David Thomson (DT) – Head of Operational Resources (for item 8.1 only) (by videoconference)

• Steven Darling (SD) – Director of Customer Experience (for item 8.2 only) (by videoconference)

2. Apologies

• Andrew Wathey (SLC)

• Julia Kinniburgh (DfE)

• Lauren McNamara (Scottish Government)

• Catherine Topley (Scottish Government)

• 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, especially TT, SLC’s new Non-Executive Director and JD, SLC’s new CIO, who were attending Board for the first time. PL noted that today would be the final meeting for both SC and AS.

TT introduced herself, noting her experience in financial services payments technology and large-scale transformation. PL noted that TT’s expertise would be invaluable and confirmed that TT would sit on TEOC.

JD introduced himself, noting he had previously held IT leadership roles in both the public and private sector.

CM declared that she had been appointed as an independent member of the Law Society audit committee.

5. Chair Update

PL noted the LLE policy session for Non-Executive Directors, led by AH, that had taken place on 25 April.

PL highlighted that there was no scheduled Board meeting in May but both RemCo and ARC would meet. RemCo members would participate in a pay workshop on 18 May as SLC formulated the pay case.

PL noted that he was due to attend Skills for Growth 2023 on 22 June and that this would be hosted by Gillian Keegan, Secretary of State for Education.

6. Strategic items

6.1 CEO Report

AT, SD and NMC joined the meeting.

CL noted a leadership event that he had hosted on 27 April where he set out the priorities for the year ahead and offered to share the pack with the Board. CL then introduced the CEO Report, noting that he would focus on the themes of customer, colleague and shareholder. He explained that from April, the CEO risk opinion would be added to the start of the CEO Report, and he therefore provided a risk view first.

ACTION – SLC Governance to upload Leadership session deck to ibabs

Risk

*

*

*

*

Colleague

ELT Recruitment

CL extended his welcome to TT and JD. CL explained that three of the four new Executive Directors were now in place.

*

CL thanked CC, JC and DB for their valuable work as interim Executive Directors, and also Non-Executive Director colleagues who had assisted in the recruitment process. RR noted that SLC should in future ensure greater diversity on recruitment panels.

Pay

CL explained that he continued to focus on the retention and recruitment of specialist roles, ongoing capacity and capability challenges in pockets across the company and the need to ensure that SLC continued to pay a living wage to the lowest graded colleagues, in the face of heightened inflation.

The Pay Remit Guidance, released on Friday 14 April, allowed SLC to increase the total bill by 4.5% this year; plus, it allowed for an additional 0.5% for the lowest paid colleagues. CL noted that while the Pay Remit was positive, it had to be self-funded within existing allocations and this would be challenging.

CL highlighted that SLC continued to engage meaningfully with DfE, and he had a productive introductory meeting with DfE’s new HR Director Naomi Schweitzer who would be asked to sign-off SLC’s pay case before it was submitted for Ministerial approval.

GP noted that the pay envelope had been higher than he had expected and that was good news if it was affordable.

*

Industrial Action

CL explained that PCS were due to undertake strike action on Friday 28 April, and had advised that union membership had increased marginally to 690. CL expected that the number of colleagues who would opt to strike would be similar to the previous two strike days and reiterated SLC’s view that it was a difficult decision for colleagues, whose decisions whether to strike or not were respected. SLC’s Business Continuity (BC) team were engaging all directorates to ensure that there was a company-wide view of potential impacts and mitigations for the planned strike action. BC was also looking ahead to scenarios involving longer strikes and targeted action.

Customer

DSA

CL noted that he and PL were due to meet with Baroness Barran, Minister for the School System and Student Finance, next week and would spotlight DSA.

Academic Cycle

CL highlighted that around 430,000 SFE applications had been received so far. This was a reduction of 10% compared to the same period the previous year but it was noted that it was still very early in the cycle and there had been a trend developing for later applications.

CL thanked MCC for sharing insights from UCAS, who he had met with yesterday. UCAS had reported a 2% decrease in applications, but places were broadly the same as last year with the latter more aligned to SLC applications.

CPD

CL recognised that customer queues were higher than forecast, and that this had been caused by industrial action, and planned and unplanned outages. SLC was also processing more tasks than in previous cycles and was investigating if this was a result of more complex applications or teething problems with automation. JC explained that while queue sizes were not where she would want them to be, she was confident SLC could remediate and there were contingency arrangements in place. SLC was also reviewing and refining robotics to ensure that systems were working effectively.

CL highlighted that three new metrics had been added to the CPD: digital adoption, first time conversion rate for application submissions, and perceived first contact resolution. CL noted it was important to measure what customers do as well as what customers say and that SLC was committed to evolving the CPD which would, in turn, lead to the joint SLC, shareholder review of the APRA measures and targets for 2024-25. The Board welcomed the new measures.

MCC noted that the SLC headcount had gone up by around 200 since the previous year. CL noted that this was largely due to better recruitment, that SLC remained within establishment and that increased recruitment in Operations led to a reduction in outsource resource. SLC needed to consider insourcing and outsourcing and there was work to do to define a Strategic Workforce Plan.

CM highlighted Evolve benefits and overseas repayments compliance. DB explained that the benefits were slightly under plan as some core components of Evolve, including DSA, had been rescheduled. SLC was endeavouring to improve the repayment compliance numbers but had limited success with customers registered abroad.

*

Shareholder

*

*

*

*

*

*

Higher Education Student Support Seminar

CL highlighted that he and DR had presented at the Higher Education Student Support Seminar in Stratford-Upon-Avon on 19 April.

AS joined the meeting.

*

*

*

*

AT and NMC left the meeting.

6.2 CFO Report

MMC joined the meeting.

2022-23 Outturn

AMC introduced the CFO Report noting that the 2022-23 outturn was based on the period 13 numbers and, as such, was still subject to external audit. The final audited position would be presented in the Annual Report and Accounts to the 7 July Board meeting. The current outturn position was an underspend of £0.35m on Admin and £1.43m on Programme, and an underspend of £4.4m on Capital.

AMC explained that although Admin and Programme were broadly in line with previous risk adjusted forecasts to the Board, there had been movement in the Capital outturn with an increase in the overspend of £0.9m. This movement was related to the Memphis lease and the Bothwell Street exit.

AMC noted that the total Capital underspend was broadly in line with the surplus Capital funding of £5.1m, for which there were no firm spend plans. The outturn for Admin and Programme expenditure was within tolerance and in line with the forecast submissions to DfE.

2023-24 Budget

AMC highlighted that there had been continued review of the prioritisation of change activity and a further review of all proposed mitigations to reduce the budget gap. This had led to some changes in the allocation of budgets to projects with potential to drive savings in Opex costs. Taking these into account, the current corporate position was a £0.7m pressure on Admin, a £5.7m pressure on Programme, and a £12.9m surplus on Capital.

AMC explained that further work was being carried out to assess the level of risk attached to proposed reductions in funding. By way of example, in relation to defect resolution, it had been agreed that £1m of funding should be reinstated. This, combined with the likelihood that HE/FE reform would utilise the current Programme surplus, meant that the corporate level Programme pressure would be around £8.7m. This deficit would be managed through a dedicated cost centre and supported by the pipeline model for the ongoing prioritisation and commissioning of change projects.

AMC noted that work was ongoing with DfE with the aim of agreeing a joint position on GDPR, and that the outcome of these discussions may add to the budget pressure. The Proteus project, which was reviewing the end-to-end change process and Catalyst, which was looking at efficiency savings, would be key pieces of work in aiding SLC to manage its budget and risks.

CM noted that the underspend on Capital expenditure could be handed back to DfE. AMC confirmed that the SLC team had been in touch with DfE to explore the possibilities.

CM highlighted that the budget was quite tight. AMC agreed but noted that robust processes were in place to manage the budget and that there was a small amount of contingency in place.

In response to a question from TT, AMC noted that the fraud costs would sit within the Programme expenditure. AMC noted that the loan book sat on the balance sheet of DfE rather than SLC.

MCC highlighted the potential costs for GDPR compliance. DW explained that although nothing had been agreed so far with DfE, the starting point had been £9m and the working assumption was that a further £25m would be required to meet the ICO requirements. There may be agreement to proceed with a degree of risk appetite, which CL, DW, AMC and GW would explore with the ICO.

In summary PL noted that the Board took assurance that the budget was being well managed and agreed the importance of stakeholder working together to form an agreed position on GDPR which could be presented to the ICO.

MMC left the meeting.

7. Reports from Committees

7.1 ARC Chair Report

ARC – Risk Appetite Statement

AB introduced the Risk Appetite Statement (RAS) noting that the changes were highlighted for ease of reference. AB noted the minor changes, including decoupling governance risk, and that the RAS set out the desired position, that SLC was on a journey towards.

CM note that the RAS had been considered in detail at ARC and the Committee recommended the RAS for Board approval. ARC had recognised that some areas, such as information risk, were on the journey described by AB.

ST left the meeting.

MCC reflected on GDPR and whether it was best placed in information or security risk, and whether SLC was agreeing to operate outside risk appetite.

AB noted that none of the risks operate in isolation and that GDPR could, potentially, also sit within legal risk. It was therefore important to take a holistic view, while accepting where SLC wanted accountability for activities to reside.

The Board approved the Risk Appetite Statement.

8. Directors’ Reports

*

*

*

*

*

*

*

*

*

*

*

*

*

*

8.1 Customer Experience Update

SD joined the meeting.

PL noted that all Non-Executives were pleased by the repayments CSAT results noted in the CPD.

DW introduced the customer experience update noting that the report covered customers who need additional support, tone of voice which was important as lack of clarity drives contact, channels, CSAT, and priorities for the year ahead. DW highlighted the good progress made and future potential, underlining that the CX was not just about ensuring ‘happy customers’ but that happy customers drives down contact and therefore cost, which is a positive outcome for customers, colleagues and shareholders.

SD noted that following the development of the vulnerable customer charter, SLC had now adopted more inclusive language and the finalised charter now set out how SLC would support ‘customers who need additional support’. Plans were being developed to further tailor the service proposition based on the development of indicators, for example, through priority handling, more bespoke customer communications and access to the secure messaging service as an additional contact channel.

SD explained that defining a tone of voice for SLC’s customer communications was at its core about simply communicating in a more straightforward and friendly way. Research indicated that the right tone could build trust and confidence and help to address dissatisfaction. Early application of the tone of voice would help SLC determine the range of benefits it would deliver and the quantity of cost savings this could generate.

SD highlighted that CSAT had improved year on year, including within repayments. Future changes that addressed the primary drivers of dissatisfaction amongst repayment customers had been added to the change pipeline and would be given ongoing budget and capacity consideration alongside SLC’s other priorities – this being in addition to incremental improvements that were planned. Referring to the repayment CSAT reported in the CPD, SD noted that the methodology had been modified in a way that upheld the validity and integrity of the survey. With only one month’s data based on the new behavioural, human psychology approach, it was not yet possible to predict how repayments CSAT may perform in the future.

PL and MCC commended the tone of voice work and PL welcomed the repayment CSAT action plan.

GP noted the work that banks were doing in relation to the FCA’s Consumer Duty and that this could be cross-referenced with SLC’s work on customers who need additional support. SD explained that SLC had worked with the Money Advice Trust and had tapped into the experience of colleagues who had joined SLC from other financial services companies. SD was building a network outwith SLC and these relationships would be leveraged to help SLC consider consumer duty and relevant benchmarking. GP and TT offered to provide further support and advice in relation to the FCA Consumer Duty.

TT queried the volume of communications. SD noted that the volume related to the scale and complexity of SLC products, and this was difficult to change. The intention was therefore to replace communications with notifications where possible as they were easier to manage. DW also noted that there was no resource to tackle the volume of communications and that many were system generated rather than controllable. The simplification of outbound communications was on the prioritisation long list, but was, unfortunately, some way down the list.

GP noted the new first contact resolution score in the CPD and asked what target SLC was aiming for. SD explained that it was too early to gauge an appropriate target as there were many reasons why customers perceive a lack of resolution. The plan was to allow the measure to run for a few months, analyse the results and determine an appropriate target which would be reported via the CPD.

PL asked if the Customer Charter had been published. SD confirmed that it was being launched internally initially and would be published externally later in the year once key deliverables, including customer indicators, were in place.

In summary PL noted the good progress that had been made and that, as set out in the paper, SLC was seen as an exemplar in CX. PL particularly noted the positive comments from the Board on tone of voice, noting that he had recently seen a sample complaint response which was impressive.

SD left the meeting.

8.2 Complaints and Appeals Report

SBA joined the meeting.

SBA introduced the Complaints and Appeals Report noting that following increases in both complaints and appeals during FY2021-22, numbers for FY2022-23 had largely remained the same. But this now meant that SLC was now managing a sustained increase in volumes.

There has been a small dip in complaints response times due to resource being targeted at appeals. There was a consequent year on year improvement in appeals response times.

SBA highlighted that his team had been working closely with Operations on trialling a more efficient way of referring students to the assessing teams as part of the actions to revolve complaints. Although substantial year-on-year improvements were evident in the speed in which appeals had been processed, it was clear that the present resource model would not allow the team to meet SLAs throughout the entire year. Further modelling had been carried out to inform the current directorate budget bid.

SBA noted that SLC’s focus was on reducing complaints and appeals. Improvements had already been made in terms of cause analysis and the feedback loop to Operations, but targets would now be specified to reduce volumes. Targets would be reported to the Board in future updates, and it was anticipated that the reduction in volume would enable SLC to handle complaints and appeals within SLA going forward. PL agreed that seeking to reduce volumes was the right course of action.

RR observed that it was difficult to identify root causes. CM observed that SLC was not always the root cause of a complaint, so could not be solely responsible for driving down volumes. DW agreed that the report identified areas rather than root causes, but as SLC moved to developed targets, it would be possible to be more specific. DW noted that SLC was strengthening links with partner organisations, and it may be possible to set targets for partner organisations, though this would need to be done carefully.

MCC noted that the majority of complaints and appeals were not upheld which pointed to a potential for improvement. She also noted that ELQ was one of the main drivers for complaints and appeals and would from 2025 be removed as part of the HE FE Reforms. MCC asked how many complaints and appeals come from customers with additional support needs.

DW explained that, at this stage, SLC was unable to easily identify customers who with additional support needs within complaints and appeals. The system flags that had been discussed in the CX update would, once embedded, enable SLC to report on this customer grouping.

PL summed up the discussion noting the very helpful report and that the merging of the complaints and appeals functions had been beneficial. The Board welcomed the intent to proactively seek to reduce volumes.

SBA left the meeting.

9. Governance

9.1 Board Code of Conduct and ToR

The Board endorsed the Code of Conduct and approved the ToR.

9.2 Minutes of meeting held on 30 March

The minutes of the SLC Board meeting held on 30 March 2023 were approved as a true and accurate record.

9.3 Matters arising from previous meetings

The matters arising document was approved as accurate.

10. Any other business

PL urged those who had yet to respond to the Board Effectiveness Questionnaire to do so.

PL thanked AS and SC for their valuable contributions to SLC prior to their exit from their respective roles.

AS noted that she would continue to support SLC in her new role and commended the SLC Board as an exemplar. SC noted that 3 of the 4 stages of the Technology Strategy had been completed but that the final stage was the most challenging and JD would need the continued support of the Board.

10.1 Date of Next Meeting

The next meeting was confirmed as being at 10.00am on Thursday 29 June 2023 by Teams with Executive hosting from the Glasgow Boardroom or by Teams

There being no other business the meeting ended at 1.30 pm.