Transparency data

SLC Board meeting minutes February 2023

Updated 24 April 2024

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)

• Lauren McNamara (LMC) – 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

• 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) - 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 6.1 only) (by videoconference)

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

• Steven Darling (SD) – Director of Customer Experience (for item 8.1 only) (by videoconference)

• Rhod Stone (RS) – Viewdeck Consultant (for item 8.2 only) (by videoconference)

2. Apologies

• Julia Kinniburgh (DfE)

• Sinead Gallagher (Welsh Government)

• Catherine Topley (Scottish 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 David Beattie, the Interim Executive Director of Change, Data, and Repayments, and Chris Cooke, the Interim Executive Director People, who were attending their first SLC Board meeting.

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5. Chair Update

5.1 Update from the Chair on relevant matters

PL explained that he and CL had been due to meet with Jeremy Miles, Welsh Government Minister for Education and Welsh Language, on 14 February but that the meeting was postponed.

PL noted that he had attended a Non-Executive Director conference for DfE ALBs on 5 December. He would also attend a meeting of ALB Chairs on 23 March, where he was due to speak about SLC, noting that he would circulate his slides to NEDs following the session.

ACTION - SLC Governance to circulate PL slides following ALB Chairs’ meeting.

6. Strategic items

6.1 CEO Report

AT joined the meeting.

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

CUSTOMER

Service Launch

CL noted that the annual cycle of services launches for student finance products was well advanced with dates confirmed. The England and Northern Ireland full time undergraduate cycle for AY2023/24 had gone live on 26 February and there had been circa 5,000 applications so far. JC would walk through the ambitious ‘Team SLC’ plan for the AY2023/24 cycle later in the meeting. Discussions on the budget and change prioritisation would need to be completed before the plan was definitive.

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COLLEAGUE

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Employee Engagement Survey

In relation to the Employee Engagement Survey CL explained that pay had been a dominant factor in reducing the score, which SLC was trying to tackle as already discussed. CL also noted that there were areas SLC could influence, and a draft organisation-wide action plan had been created based on analysis, key themes, and discussions with ELT.

CL highlighted that employee engagement was a daily rather than annual event and acknowledged that SLC’s approach could be more agile. In future there would be a focus on more regular pulse surveys.

CL noted that as part of the February Business Review Meeting in Darlington, the ELT had taken part in ‘back to the floor’ activity. This had been well received and would continue. Additionally, CL had commenced a series of face-to-face colleague engagement sessions across all SLC sites.

GP noted the feedback on change communications and asked what had driven colleague sentiment. CL noted that SLC had an ambitious change agenda and the volume – and absorbability – of communication was the concern expressed by colleagues.

SHAREHOLDER

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Pension Update

DW explained that work continued to resolve SLC Pension Scheme issues in respect of deferred and pensioner members. Following the successful bulk transfer of active members, the focus was now on the remaining scheme members. SLC had worked with DfE, HMT and Cabinet Office on the final transfer, making good progress, and the Board would be notified when this had been completed.

Corporate Performance Dashboard

Responding to a question from ST, CL explained that the application processing backlog was lower than at the same time in the previous year, due to the work of JC and her team.

MCC noted the CSAT score for telephony. DW highlighted that whilst there was in-month improvement, the performance was down year to date. This was driven by higher net contact overall and it was one of the reasons why the thematic business plan set out that channel shift and guided choice was a cross-cutting theme for the coming year.

In summary, PL noted that the Board took significant assurance from the CEO Report. He thanked Non-Executive Director colleagues who had assisted with ELT recruitment, noting that CL continued to manage this transition period very effectively.

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AT and NMC left the meeting.

6.2 CFO Report

MMC joined the meeting.

AMC introduced the CFO Report noting that it included commentary on movements from the October to January forecast. The risk adjusted forecast included emerging cost pressures and underspend risks, which were not included in the system forecasts but were held and monitored in the financial risk register.

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AMC acknowledged that the report appeared to show a volatile picture, but she gave assurance that SLC was aware of the moving parts and monitoring them very closely. AMC projected a year-end outturn of an Admin and Programme underspend within the APRA tolerance and a Capital underspend slightly out with tolerance. AH and PL noted that this provided assurance.

AMC noted there was a desire to change the forecasting process within SLC but that this could only be done in the 2024-25 financial year.

PL noted that the Board took assurance from the CFO Report which set out a robust approach to financial management and controls. He noted that no conclusion could be confirmed but that SLC was taking all the necessary steps to manage the year-end outturn within control totals.

MMC left the meeting.

7. ###Business Planning – Thematic Annual Business Plan, APRA measures and targets FY2023-24, and Draft FY2023-24 Budget

CL introduced the business planning item by noting that the APRA measures and targets had been set by shareholders. They would remain the same into FY2023-24, which reflected the continuity of SLC’s overall strategy and the shareholders’ desire to see year on year trends. CL reflected that the main discussion had been on Repayment CSAT and whilst the measure and target would remain, it was agreed that the discussion needed to move on to the key activities that SLC and shareholders would take to improve customer satisfaction. CL underlined the importance of action and tracking the outcomes of those actions rather than continuing discussions on the CSAT measure and target.

CL confirmed that SLC and shareholders had agreed to work together on the FY2024-25 metrics, with work commencing early to ensure that SLC and shareholders collectively arrived at a set of measures and targets that were achievable and demonstrated SLC’s progress.

The thematic BP was set at a high level and demonstrated the continuity of SLC’s strategy and how planning principles had been applied to ensure a focus on colleague, customer and shareholder outcomes. The plan would continue to be refined in line with budget and prioritisation discussions.

There was ongoing prioritisation activity in Change led by DB and AMC and significant headwinds to contend with. CL reinforced that SLC was aiming to achieve the best use of taxpayers’ money and complete transparency in relation to how SLC was using its budget and why. It was important to be clear what SLC would do, as well as what it would not.

AMC introduced the draft budget noting that it was a work in progress. SLC had been commissioned in early December 2022 to return outline financial plans for FY2023-24 and FY2024-25 to DfE. The underlying structural deficit, addressed by the request for additional funding in 2022, remained and was included in the submission to DfE. The submission provided the blueprint for Directorate budget envelopes and a gap was identified in Operating Expenditure which SLC was challenging in parallel with activity to determine priorities within Change. AMC noted that if the gap could not be closed, SLC may need to consider using funding from the Change budget. She further noted that additional flexibility needed to be identified to release funding for the pay case. In March, the Board would receive an update on BAU budgets and the Change prioritisation as part of the work to achieve a balanced budget.

DW introduced the thematic plan by noting that SLC had set out FY2023-24 priorities which aligned to the vision and mission, the existing strategic goals and the lenses. Planning principles had helped refine priorities, with a focus on outcomes that are better for colleagues, better for customers and better for shareholders. SLC had demonstrated considerable success in the current year in flattening the peak though collaborative action and the same approach would be adopted in FY2023-34 to enabling and promoting channel shift.

PL opened up the discussion, noting that the next version of the plan would come to the March Board for approval if possible, but SLC was still at the stage where the finances were not certain – both the total budget envelope which DfE set and the detail which SLC was actively determining. PL noted that it was a complex balancing act.

MCC reflected on the APRA measures and targets discussion at which she had represented the Board, noting that she was satisfied that the reason for the decline in CSAT was the shift from telephone to email surveying.

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She welcomed the early focus on FY2024-25 metrics. On the thematic business plan, MCC noted that she felt the strategic aim of ‘doing more for less’ was not coming through whereas the other strategic goals were.

ST and GP noted that there were too many priorities in the plan. ST also noted that stretch targets focused on CI would be valuable for the FY2024-25 metrics and questioned whether SLC’s goal of fair pay was realistic, given the constraints the company was operating under. ST contended that SLC do what it can to address its competitive position within the market and the way capability is resourced, but reiterated that ensuring fair pay was not within the gift of SLC or the Board.

CM welcomed the plan and the fact that APRA measures and targets would remain as currently set, but agreed that new measures and targets should be an aspiration for FY2024-25. CM also agreed that the process SLC was following to close the OpEx gap was the right one. Alongside MCC, CM agreed that a cost per customer type metric was important. CL suggested that cost to serve was likely the more relevant metric and would feed into the FY2024-25 review process.

AW and CM both suggested a longer-term view of Repayments, with an understanding of volumes in 5 years. Responding to points raised on Repayment CSAT and policy, AH noted that DfE were not considering reform of Repayment policy and that while stretch targets had been considered, with the level of change SLC was currently going through, stretch would be more appropriate in FY2024-25. On cost per customer, AH noted that what was measured was very important. For example, costs may be higher due to the level of current TG investment to ensure system stability and safety.

PL summarised the points made, noting that SLC needed to have as much clarity on prioritisation as possible by the end of March and that CL, PL, CM and AMC would meet ahead of the March Board to help shape the Board discussion. PL also noted the volume of activity with DB adding that SLC was also trying to do a lot concurrently, meaning that tough priority calls needed to be made. He pointed out that it was important that the focus on Repayment CSAT was not at the expense of delivering greater yield and there was a clear opportunity to improve focus on the latter. PL remained keen to keep the 62% target in sight but focus on the things SLC can do to make improvements.

CL welcomed the Board’s feedback noting the consensus for continuity on metrics and the need for review so that SLC was focussed on the right activities. He underlined the importance of discussing the activity that SLC can meaningfully pursue to improve customer satisfaction, and not focusing on the unachievable target. CL noted that metrics drive behaviours and outcomes, and what customers do matters more than what customers say, which, for example underlined the value of measuring digital containment.

Before closing the discussion PL noted that the Board would appreciate SLC’s efforts to focus in on what really mattered in the next version of the business plan for the March Board.

8. Reports from Committees

8.1 ARC Chair Report

CM introduced the ARC Chair Report, noting that it was self-explanatory. PL welcomed the single page summary and the Board took assurance from the ARC Chair Report.

AW left the meeting.

9. Directors’ Reports

9.1 Application Cycle Forward Look

SD joined the meeting.

JC introduced the Application Cycle – Forward Look noting that SLC was in a strong position with low customer tasks at the end of the 21/22 cycle. This was noteworthy as there had been a significant number of late applications and many of these had been complex. SFE had already launched for 22/23, and JC noted that SLC would be managing the cycle with a flat budget but increase in applications, complexity and contact.

SLC had a clear strategy and proven model for flattening the peak which underpinned SLC’s core focus on paying customers accurately and on time. JC noted that SLC would use the successful, collaborative approach to flattening the peak to enable and promote channel shift, which would further enable SLC’s commitment to helping the customers who need us most.

MCC asked why SLC was predicting an increase in applications, referencing the UCAS data which showed a drop. AW asked if SLC get the same weekly feed on applications that institutions receive. RR noted that the paper would benefit from scenario planning. AH echoed this point, asking about planning assumptions and the ability to flatten the peak alongside budget constraints. PL was keen to understand if the plan set out was affordable, referencing the ongoing budget discussions, and what SLC wanted to deliver. ST asked about outsourcing, noting the value of dual or multi-purpose call centres.

JC confirmed that SLC get data from Partner Services and insights from the sector. DfE also provide a forecast which was SLC’s starting point. AS noted that DfE would be looking closely at the dip predicted by UCAS and what may be driving this but noted this was a data point only and analysis was needed.

CL noted that SLC tends to be accurate, given the range of inputs planning is based on. He noted however, that the profile of applications matters especially if there are large volumes of late or complex applications.

CL noted that it was not possible to answer RR and AH’s questions right now. There was an element of inflation which SLC had to attempt absorb and the funding of Change priorities, which would help enable channel shift, all impacted SLC’s ability to deliver a successful cycle.

CL pointed to good progress in relation to outsourcing. Teleperformance offered telephone and processing support and JC was exploring what greater flexibility could be offered. CL confirmed that it was important to get the balance of in- and out-sourcing right.

Responding to PL’s question about what SLC was aiming to deliver, the aim was to pay the right customer at the right time and the lowest cost to the taxpayer. In this model the best service was no service, with DW noting that given the demographic of SLC’s customer base, customer preference was not to have to speak to SLC. This was why enabling channel shift was the key theme for the coming year. DW noted the link to SLC’s economic analysis, which recognised that SLC cannot simply divide overall costs by customers due to the number of repayment customers, the different application and product types and the cost of investment. SLC need to have a sophisticated way to understand costs before the cost to the taxpayer could be determined.

SD noted some of the activities that SLC plan to pursue to enable channel shift, including an increase in evidence that can be uploaded digitally, as well as an overall reduction in the ‘evidence burden’. There would be further development of assertive, directional messaging and improvements in the Chatbot, linking this channel to a knowledge base. SD was keen to improve containment as this was proven to increase customer satisfaction. SD also noted that there was now a suite of self-help videos for customers with plans to develop more in the coming year. The above activities would all be delivered within existing budget as BAU.

SD also noted the activities which were subject to budget and prioritisation, including integrated system notifications and evolving the IVR to enable messaging to go to customers’ mobile phones. Greater optionality for self-serve would also require funding as would a proposal SD had put forward on channel optimisation and shift.

JC noted the opportunity to invest to save, through the prioritisation of initiatives that would reduce demand and enable digital self-service.

PL commended SLC’s success in flattening the peak in 2021/22 despite another year of significant change. He wanted to be clear, in the papers coming to Board at the end of March, which of the activities outlined by SD had made it through the prioritisation exercise. PL was keen to understand the impact of not delivering activities on SLC’s ability to improve service.

SD left the meeting.

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11. Governance

11.1 Minutes of meeting held on 1 December

The minutes of the SLC Board meeting held on 1 December 2022 and Strategy Meeting from 30 November 2022 were approved as a true and accurate record.

11.2 Matters arising from previous meetings

The matters arising document was approved as accurate.

12. Any other business

PL highlighted that the March Board meeting would be in person but with attendance by Teams available. Colleague engagement activities would be arranged for the Non-Executive Directors who were able to attend in person, and he hoped that NEDs attending in person might be able to meet for supper on the evening before the meeting.

12.1 Date of Next Meeting

The next meeting was confirmed as being at 10:00 am on Thursday 30 March 2023 in the Glasgow Boardroom and by Teams.

There being no other business the meeting ended at 1.20 pm.