Transparency data

SLC Board meeting minutes July 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

• Charlotte Moar (CM)- Non-Executive Director

• Stephen Tetlow (ST) - Non-Executive Director

• Rona Ruthen (RR) – Non-Executive Director

• Andrew Wathey (AW) – Non-Executive Director

• Natasha Toothill (NT) – Non-Executive Director

• David Wallace (DW) - Deputy Chief Executive Officer

• Audrey McColl (AMC) - CFO

• Gary Womersley (GW) - Company Secretary

1.2 Also in attendance

• Partick Curry (PC) - DfE (by videoconference)

• Stephen Marr (SM) - 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)

• Jason Dunham (JD) – CIO

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

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

• Gillian Brydie (GB) - Executive Director, People

• Margaret McMullen (MMC) – Director of Finance

• 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)

• Nicholas McDermott (NMC) – Chief of Staff (for item 6.1 only)

• Angela McCafferty (AM) – Head of Change, Governance and Assurance (for item 6.1 only)

• Paula McEvoy (PM) – Head of Repayments, Strategy and Insight (for item 6.1 only)

• Elaine Sweeney (ES) – HE FE Strategic Reform Portfolio Programme Lead (for item 8.1 only) (by videoconference)

2. Apologies

• Audrey McColl (SLC)

• David Beattie (SLC)

• Julia Kinniburgh (DfE)

• Catherine Topley (Scottish Government)

• Sinead Gallagher (Welsh Government)

• Jonny O’Callaghan (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, noting that it was an ‘in person’ meeting in Glasgow but with facilities for Teams connection as well.

There were no declarations of interest.

5. Chair Update

5.1 Update from the Chair on relevant matters

PL noted that he had received the Chair’s Letter, which accompanies the more detailed APRA letter, and that it would was available on iBabs.  The APRA letter was undergoing final review.

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6. Strategic items

6.1 CEO Report

AT, NMC, PMC and AMC joined the meeting.

CL echoed PL’s welcome to PC and GB and introduced the CEO Report, noting that he would focus on four main areas: risk opinion, customer, shareholder, and colleague. 

Risk Opinion  

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AW left the meeting.

Error Rate - CL noted that while the Annual Report and Accounts (ARA) had been finalised and now published without qualification, concern had been expressed in regard to an increase in the error rate of assessments which had been estimated.  While no systemic issues had been identified, SLC was taking action via the Operations Control Function to put in place a suitable, robust and sustainable reporting methodology which would be tested and validated before being included in the CPD.  CL was clear that SLC needed the data not just to tell the story and monitor trends but also to enable SLC to change the outcome if necessary by taking remedial action ahead of the next year end.

CM explained that it would be important to align error rate testing with GIAA audit work.  CL agreed that SLC would work alongside GIAA, NAO, DfE throughout the year. 

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Customer

Academic Cycle - CL explained that academic cycle processing was, as ever, a core priority and was in a good place.  SLC had now resolved the challenges with task queues, as detailed in previous Board papers.  SLC had also had helpful discussions with UCAS, which offered fresh insights.

JC noted that application volumes had caught up since the June Board meeting and figures were aligned with the view provided by UCAS.  SLC was planning for a ‘dynamic clearing cycle’, with expectations that there would be a high number of disappointed applicants given the expectation that exam results would return to pre-pandemic levels.  The cycle was performing strongly with Ready to Pay data in line with last year, and customer satisfaction above target.

DW noted SLC’s engagement with UCAS and that expectations were for a ‘short and sharp’ clearing, echoing JC’s point on the higher number of disappointed students but also noting the expectation of a lower number of change or circumstance requests.  SLC would validate this view and while not being complacent, was not building in additional risk.

LMC joined the meeting.

Wales Further Education Online - CL noted his disappointment that the Welsh Government’s Educational Maintenance Allowance and Learning Grant faced delays, noting that SLC aimed to deliver its plans to all its shareholders and was disappointed when any were delayed.  CL highlighted his regular contact with CW and the remedial actions SLC was taking.

GP asked whether a lessons learned exercise would be undertaken.  CW noted that there had been frustrations on both sides and that the Welsh Government had a good relationship with SLC.  CL explained that the current focus was on resolving the issue but that there would be a lessons learned reported back in a future CEO Report and in the academic cycle review paper.

ACTION:  Lessons learned on Welsh further education online delays to be included in a future CEO Report and in the academic cycle review paper. 

DSA - CL highlighted that the DSA framework agreements with the preferred suppliers had been signed and that the public announcement had been made on 20 July.  Media coverage had been limited and the reaction from the sector had been more muted than expected.  SLC had received a letter from the FCA questioning if SLC was engaged in regulated activity on insurance of support technology provided to students.  This was not the case and a robust response had been provided to the FCA.  SLC’s main current focus was on transition activity ahead of the launch of the student finance applications in early 2024 which was the point when the preferred suppliers would take on new customers.  The Board would receive a full DSA update at the September meeting.

Shareholder

QBR - CL noted the Quarterly Business Review update from the recent internal session attended by ELT, SMT and business partners.  Priorities has been categorised under the colleague, customer and shareholder headings and streamlined into 12 key activities.   The Board welcomed this additional reporting which gave added texture to the CPD.

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Director General Visit - CL noted that JK would visit SLC’s Bothwell Street offices on 10 August and would receive an organisational overview and take part in a teach in with SLC teams.

PC left the meeting [due to a fire alarm at DfE].

Repayment Yields - CM noted that it would be useful for SLC to collaborate with Anne Spinali on supporting increased repayment yields now that she was in her new role within DfE. 

Colleague

Pulse Survey - CL explained that it would be a key focus of the ELT to review the recent pulse survey results and to agree an action plan.  As expected, early analysis suggested lower scoring due to pay issues and an increase in time in the office.  But there had been encouraging results around leadership visibility and this could, in part, be attributed to Executive meetings being held in both Darlington and Glasgow which included leaning in activities with colleagues. 

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In summary PL noted that the Board took assurance from the CEO Report and that there would be further updates on the resolution of the delays for Wales.  PL suggested that cyber should come back to a future Board meeting, with the possibility of a combined lean in at the October Board meeting.

ACTION: Cyber to be reported to the October Board meeting along with a related lean in activity.

PL noted the Executive’s assurance on plans to strengthen and bring forward analysis of the error rate on assessments of funding and noted that he would like the next Repayments update to look at the invest to save business case to increase repayments. 

ACTION: Next Repayments update to include the invest to save business case. 

PL noted that although it was positive that the pay case had been approved by the DfE minister, if SLC had to revert to a pay remit only, this would be a poor outcome and would require further RemCo and Board consideration.

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AT, NMC, PMC and AMC left the meeting.

6.2 CFO Report

MMC introduced the CFO Report noting that the reporting position did not reflect the level of risk faced by SLC, as it had worsened over the past month.  In addition to the opening deficit of £8.6m, the £1,500 payment to all staff was not yet fully funded.

MMC highlighted that SLC was reporting a formal position of a £2m Programme overspend, which went to the limit of the tolerance, to DfE and that this would require DfE approval.  A more detailed view of the financial position would be available in September, and it was recognised that decisions made would also impact FY2024-25.  A Zero Based Budgeting (ZBB) exercise was underway, with results expected to be ready to report to Board in October.  MMC expected to be able to provide a fuller picture on FY2024-25 once the formal commission from DfE had been issued - this was currently expected in December.  The level of challenge had already been surfaced with DfE.

PL noted that it would be helpful to report budget findings around the Q1 position in September.

ACTION: Budget findings around the Q1 position to be reported to the Board.

PC re-joined the meeting.

CM welcomed SLC’s work on the ARA and noted that the DfE Annual Report and Accounts had also been submitted pre-recess.  CM questioned the timetable for decision-making for the FY2024-25 budget and suggested that it would be useful to consider a five-year budget.  MMC recognised that the CFO was in control mode in relation to spend.  The ZBB approach would enable a solid baseline for FY2024-25 which would provide the basis for longer-term financial planning.  PL noted that getting early sight of the FY2024-25 budget was critical and asked HB to consider with AMC the best sequencing.  Post meeting note – AMC confirmed that the Board would get first sight of the draft FY2024-25 budget in February 2024 but that this would be an indicative and not final budget.

The Board welcomed the updated Economic Analysis, noting that it was a work in progress.  DR noted that SLC had been clear throughout the development of this work that costs were not fully loaded as that would require further investment in systems improvement.  The ambition remained to be able to provide greater detail in due course.  DR noted that it was too early to offer definitive conclusions as the analysis covered atypical years.  PL suggested that the economic analysis work would benefit from further offline discussion, involving MCC and ST, when SLC was considering what further development to pursue.

In summary, PL noted that the Board took assurance from the CFO Report but acknowledged the challenges facing SLC.

7. Directors’ Reports

7.1 LLE HE Reform Update

ES joined the meeting

DR introduced the LLE HE Reform Update noting that the report focussed on risk and the forward look, and that there had been positive output from the programme.  The biggest challenge related to the key Apply to Pay Project which would deliver the core application and assessment part of the LLE service.  A decision had been taken to move to phased implementation through the inception period.  This more agile approach was not a radical departure from the norm as it had been used most years by SLC in its student finance service launches. 

DR explained that whilst there had been discussion around the delivery of a compromised design, he had reassured PC and the programme board that there would be no compromise on LLE policy.  PC noted there had been good discussion at the recent programme board, there was a challenge back to the team to investigate options at programme level to create contingency.

MCC asked if the programme was akin to a rollover.  DR explained that whilst no new core systems were being built, systems would be upgraded.  There were key differences from the current system as LLE was a funding account from which a student would draw down money.  This would require changes to existing customer-facing systems.   

MCC, TT and ST asked how tech debt was being captured, the extent to which LLE systems were being built on legacy or sub-optimal architecture, the ramifications of launching a MPV and whether the LLE ‘tech vision’ had been articulated.  ST also noted the absence of costs in the paper.

RR, CM and TT noted the risk to launch in 2025, with RR noting that the private sector would recognise there was no ability to launch on time and replan.  The Board asked what the triggers were for DfE to move launch beyond 2025.

CM asked about provider readiness and whether providers will develop LLE courses.

PL summed up that the Board was concerned by two significant issues: tech debt and the impact on operating costs; and, what needs to follow the launch of a MPV to get to the full level of service.  In terms of creating contingency, this was recognised as an action from the LLE Board and not for PC to report back on at the SLC Board today.

DR explained that it was accepted that SLC was building on unsustainable technology which would need to be enhanced in the longer term.  DR confirmed that there was no ‘tech vision’ for LLE that was any different to the tech and CX ambitions set out in those respective SLC strategies.  SLC was an enabler of LLE while the vision sat with DfE, as did the overall timetable.

DR noted that building up tech debt was problematic in two ways: LLE was adding to the complexity of the existing infrastructure, meaning future change would be more challenging; and, when SLC uplift legacy tech it will cost more as both existing and LLE tech will need to be uplifted. CX debt would lead to increased TG costs and CX compromises would lead to increased costs in Operations.  DR confirmed costs were being tracked in great detail while costs had not been included in this report, they would be going forward.

ES provided a programme update noting that Apply to Pay Discovery was moving into Inception which would include a design board of technology specialists from SLC Technology Group, Operations, and DfE.  The approach in each of the tranches was to triage the options available against delivery, the confidence level of delivering on time, the relative pros and cons, customer operations, and security.  A log of decisions was maintained and would be used for a future road map.  The DfE communications strategy was in its early stages, so ES could not provide any further detail at this stage in relation to provider readiness.

PC noted that the discussion today had been valuable and that there was a strong desire to deliver LLE by 2025.  PC speculated that the timing of the next general election would likely factor into decision-making on LLE. 

PL noted that it would be useful to further discuss LLE costs as well as tech and CX debt.  It was noted that a further substantive update was already scheduled to come to the November Board meeting.

ACTION: November LLE Update to include costs, and tech and CX debt.

ES left the meeting.

8. Governance

8.1 Strategy Day

PL noted that a draft agenda had been included with the papers today and requested that planning for the 29 November meeting commence.  DW explained that points picked up from discussions at the meeting would be played into the planning and ultimately discussion at the strategy day. 

PL noted that the shareholders were welcome to take part in the strategy day.

8.2 Framework Document Report

HB introduced the Framework Document Report noting that the metrics would come to the Biannual Shareholder Meeting (BSM) on 10 August.  GIAA had carried out an advisory audit which had helped identify areas of best practice which HB was taking forward.   PL noted that the ambition with the revision of the Framework Document had been to go faster in a compliant way.

PL noted that the BSM paper would be made available on iBabs.

ACTION: August BSM papers to be made available on iBabs.

8.3 Modern Slavery Statement

GW introduced the Modern Slavery Statement noting that changes since last year were minimal. 

GW noted the suggestion from TT to consider the customer lens for the report next year.

The Board approved the Modern Slavery Statement.

8.4 Minutes of meeting held on 1 December

The minutes of the 29 June and 7 July meetings were approved as an accurate record.

8.5 Matters arising from previous meetings

The matters arising document was approved as accurate.

8.6 Board Effectiveness Review

PL explained that following the SLC Chairs’ meeting in July, a Board Effectiveness Review action plan had been created that would now be taken forward by the Governance Team.  HB thanked the responders to the review, noting that the feedback had been largely positive and that the agreed actions were already being discussed.  CM noted that ARC effectiveness actions were included in the plan.

PL highlighted that an external Board Effectiveness Review was due for 2024 and that the Chairs had agreed that it would be good to engage the services of a different provider, having engaged NAO for the last external review.

9. Any other business

There was no other business.

9.1 Date of Next Meeting

The next meeting was confirmed as being at 10.00 am on Thursday 28 September 2023 in the Darlington Boardroom or by Teams. 

There being no other business the meeting ended at 12.50 pm