MINUTES of the third meeting of the 2008/2009 academic year held on
Thursday, 29 January, 2009 in Room 84, Queen Anne Court, Greenwich Campus,
Old Royal Naval College, Park Row, Greenwich SE10 9LS,
commencing at 5.30 p.m.
Present: Mr J R H Loudon (Chairman)
Baroness Blackstone (Vice-Chancellor)
Mr N Eastwell
Ms M Hay
Sir Callum McCarthy
In attendance: Prof T Barnes (PVC (Research & Enterprise))
Mrs T A Brighton (Minutes Secretary)
Mrs L Cording (Secretary and Registrar)
Mr R Daly (Director of Finance)
Mr S Etherington (Chairman of Court)
Dr M Noble (PVC (Learning & Quality))
Miss C Rose (Director of Student Affairs)
Prof D Wills (Deputy Vice-Chancellor)
Apologies: Mr J Barnes
Mr S Howlett
08/32 DECLARATION OF CONFLICT OF INTERESTS
There were no declarations of conflict of interests.
08/33 STUDENTS’ UNION (F 08/25)
Mr Benson Adeeso (President, Students’ Union), Mr Richard Loader (VP: Services,
Students’ Union and Mr Jim Gardner, Chief Executive, Kent Union) were in attendance
for this item.
The Committee received:
i Final Audited Financial Statements for SUUG for the year ended 31 July 2008
ii Draft Budget and Cashflow Forecast for 2008-2009
Finance Committee: 29 January 2009 page 1
iii Management Accounts to 31 December 2008
iv Final Audited Financial Statements for UMSA for the year ended 31 July 2008.
The SU VP: Services reported that a deficit of £175k was forecast for the current
financial year. The recent reorganizational changes accounted for most of this over-
spend. The redundancy costs of five staff, including the General Manager, who had
recently left the employment of the Students’ Union had amounted to £188k. In
addition, there were consultancy costs for Kent Union which was providing interim
management until a replacement General Manager was appointed. The Sabbatical
Officers were confident that the changes would bring about an improvement in the
effectiveness of the Students’ Union.
It was noted that, as stipulated by the Committee, the 2008-009 budget had been revised
on the basis of a subvention of £775k. It was further noted that the cashflow forecast
contained a number of assumptions including an advance of £100k on the 2009-2010
subvention during June/July 2009 to help meet cashflow requirements.
The Committee noted that the Kent Union managers had been contracted to work with
the Students’ Union for a period of 13 weeks. During that time they would be helping
with the formulation of long-term financial and strategic plans. Jim Gardner reported
that the provisional budget for the 2009-2010 academic year forecast a surplus of £50k.
It was envisaged that implementation of the recent restructuring and redundancies
would result in savings of £350k over the next three years.
33.2 Review of Students’ Union
The Secretary& Registrar reported that the Students’ Union Review Working Group
had supported plans to restructure the Students’ Union. Members had been dismayed
however that the cost had been considerably higher than originally anticipated. The
working group welcomed the guidance that Kent Union was providing to the Sabbatical
Officers but remained concerned that the coming months would be particularly
demanding for them; besides the normal business of providing activities and services to
the students, the election season was about to start. The Secretary & Registrar therefore
recommended that Kent Union officers should report directly to her for the remainder of
the period of their contract. In this way, it was hoped that the Sabbatical Officers could
concentrate on day-to-day activities for students whilst Kent Union would assist with
the general management of the Students’ Union and development of long-term
The Committee approved the proposal that the Secretary & Registrar oversee the
strategic management of the Students’ Union for the time being.
The Committee noted that progress with reviewing the governance arrangements had
been stalled as a result of the recent restructuring issues. Committee Members
believed that determination of the future constitution and legal status of the Students’
Union was now a priority. Officers were asked to impress upon Sabbatical Officers the
Committee’s view that progress in this area was of paramount importance.
Finance Committee: 29 January 2009 page 2
08/34 MINUTES OF PREVIOUS MEETINGS (F 08/26)
The minutes of the following recent meetings were taken as read and signed as a true
i 3 November 2008
ii 24 November 2008.
08/35 MATTERS ARISING
35.1 London Pensions Fund Authority
The Director of Finance reported that the mid-year statement of performance, normally
published by the LPFA in December, would not be available until the end of the month.
The current economic climate meant that the results were likely to be poor. It was
noted that the next actuarial valuation would be undertaken in 2010 and the results
released in 2011.
It was agreed that the Committee would revisit the options for the future of NRI
together with an exit plan at its June 2009 meeting.
35.3 Site for the Construction of the New School of Architecture &
The Deputy Vice-Chancellor reported that, as recently notified to Court Members, the
University’s offer of £9 million (inclusive of VAT) for the Stockwell Street site,
Greenwich, had been accepted. The sale was on the basis of vacant possession. The
process of due diligence now under way had uncovered a covenant over part of the land.
The University was seeking clarification on the issue. The due diligence process was
expected to be completed by the end of March.
It was also reported that consideration was being given to the optimum use of the site
and the financial impact of the different scenarios. A detailed report on developments
and the proposals for the site, together with a revised Estate Strategy, would be
presented to the next meeting of the Committee.
08/36 MANAGEMENT ACCOUNTS TO 31 DECEMBER 2008 (F 08/27)
The Committee received:
i University of Greenwich Management Accounts to 31 December 2008
ii Income and Expenditure Accounts to 31 December 2008
iii NRI Management Accounts to 31 December 2008
iv University of Greenwich Management Accounts – contribution format.
Finance Committee: 29 January 2009 page 3
It was reported that on present performance the University was likely to exceed the
£500k budgeted surplus. Recruitment was currently healthier than anticipated. On the
basis of the December 2008 HESES return, the main HEFCE contract and a large
proportion of the Additional Student Number (ASN) contract had been met.
The Committee recalled that Members routinely assessed the likelihood of the
University meeting its year-end target at the January meeting. The key issues and risks
likely to have an impact on future performance were considered (ie additional holdback
on the current and prior year HEFCE student contracts, higher than anticipated levels of
student bad debt and failure to meet income targets). Taking these factors into account
and recognising that the financial performance was currently better than predicted, the
Committee concluded that it was not necessary to invoke any of the standard financial
The Committee noted that a one-off currency gain of £1m had been made on the
conversion of foreign currency to sterling. The income had been added to the
contingency reserves for the year. Although it was noted that the University’s holdings
in foreign currencies were relatively small, the Committee asked for clarity on the
policy for retaining foreign currency funds. Officers agreed to provide a brief paper to
the next meeting.
Members also noted that NRI was on track to maintain the budgeted deficit of £800k for
2008-2009. The Committee agreed that the Director of NRI should be invited to attend
the June 2009 meeting of the Committee to participate in the discussion on the NRI
08/37 SHORT-TERM INVESTMENTS (F 08/28)
37.1 Quarterly Report
The Committee received a report on short-term investments for the period to 31
December 2008. It was noted that investment returns for the period had exceeded
budget. However, the investment returns in the latter half of the financial year would be
adversely affected by the continuing reductions in bank base rates. As a result, the
investment forecast outturn had been reduced by £600k to £3 million.
37.2 Royal London Cash Management Ltd – Counter Party List
The Director of Finance recalled that a revised Counter Party List had been agreed at
the meeting on 3rd November 2008 enabling £15m to be invested in UK banks and £5m
in non-UK banks that met the University’s requirement of a minimum Standard &
Poor’s rating of AA-. However, in order to optimize investment returns, it had been
necessary to secure Chair’s approval between meetings to make further amendments to
the Counter Party List. The volatility of the banking sector meant that additional
changes were also being requested at this meeting.
Finance Committee: 29 January 2009 page 4
i noted that Chair’s approval had been given:
(a) to enable the Royal Bank of Scotland to remain on the Counter Party List
despite not meeting the AA- minimum rating requirement
(b) for the Counter Party limits on non-UK banks to be increased to £7.5m
(from £5m) in order to provide the required level of investment capacity
(NB with the consequential removal of the Danske Bank from the Counter
ii agreed that the threshold for investment in major UK Banks be increased from
£15m to £17.5m per bank
iii agreed that, in the event of Barclays Bank’s downgrade from AA-, the
University be allowed to continue (in the medium term) to use the institution as
its banker, unless there was reason to believe that such a course would put
University funds at risk
iv agreed that the Director of Finance should assess the suitability of other AA-
rated institutions not currently used by the cash manager, including building
societies, and on the basis of the findings draw up a revised Counter Party List
v granted delegated authority to the Chairman of the Committee to approve the
addition of other financial institutions on the Counter Party List before the next
08/38 INVESTMENT IN EQUITIES
38.1 Treatment of Losses from Investments in Equities
The Director of Finance summarized the advice provided by the Auditors on the
treatment of unrealized losses following investment in equities:
“Equity investments must be stated on the balance sheet at fair value (market
value). Changes in fair value between balance sheet dates will not be
recognised in the Income & Expenditure Account. Any surplus/deficit on
disposal is assessed against the original acquisition cost and taken through the
Income & Expenditure Account. Impairment losses are also taken through the
Income & Expenditure Account.”
38.2 Investment Sub-Group
Marianne Hay, as Chairman of the Investment Sub-Group, reported verbally on the first
meeting held on 13 January 2009. As the University had clear capital requirements
arising from the acquisition of the Stockwell Street site, group members had agreed that
future investments would need to focus on minimising risk rather than maximising
Finance Committee: 29 January 2009 page 5
returns. It had been agreed that before a decision on moving to investing in
equities/bonds would be made, it would be necessary to have some understanding of the
level of loss that the University could sustain. The Director of Finance had agreed to
provide some information to the next group meeting. It had been generally agreed
however that this was not an appropriate time to start investing in equities although
members had believed that investment in corporate bonds was worth exploring. The
returns on bonds would need to be monitored before a firm decision could be reached.
The sub-group had agreed to keep the matter under review and to meet for 45 minutes
before each future meeting of the Finance Committee.
08/39 REPURCHASE OF BOND (F 08/29)
The Committee considered a summary of the pro bono advice provided by Rothschilds
on the possibility of early redemption / repurchase of the £30m Bond. In summary, the
advice suggested that:
i the current redemption premium was estimated to be £6.5m
ii early repurchase would only be attractive if the early redemption price of the
Bond could be negotiated downwards
iii it made no sense to seek early redemption/repurchase if refinancing would be
required as the cost of the Bond was cheaper than refinancing alternatives
The Committee recalled the University’s long-term commitments in relation to
implementation of the Estate Strategy and the purchase of the Medway campus
reversionary lease and the impact that these plans had on its overall finances. Taking
into account the advice about refinancing and the instability of the credit market, the
Committee determined that no action should be taken at the present time. The matter
would be kept under regular review.
08/40 UNIVERSITY ESTATES ISSUES – ITEMS FOR INFORMATION (F 08/30)
40.1 Proposed Sale of the Leases of Cutty Sark and Devonport Halls of
It was recalled that, at its previous meeting, the Committee had authorised University
Officers to pursue negotiations with Hyde Housing, the landlord of the Cutty Sark and
Devonport Halls of Residence, about the opportunities for restructuring the University’s
lease arrangements. It was noted that the University had now submitted an expression
of interest but a formal response was still awaited. Firm recommendations arising from
the negotiations would be presented to a future meeting of the Committee.
Finance Committee: 29 January 2009 page 6
40.2 Long Term Maintenance
The Committee received a report on long term maintenance priorities for 2008-09. The
following maintenance works amounting to a predicted spend of £1.29m had been
Avery Hill Campus
replacement of heating system, Dance Studio, Sparrows Farm
refurbishment of three class rooms used by the Professional Learning and
External redecoration of the Stephen Lawrence Building
Replacement of key electrical and mechanical plant
It was noted from the summary of long term maintenance works completed during
2007-008 that works totalling £1,356,199 had been carried out against an original
budget of £1m. Additional funds had been allocated to ensure that additional essential
long term works could be undertaken.
40.3 Capital Works Schedule
The Committee received the updated schedule of major capital works.
08/41 CENTRE FOR INDIAN BUSINESS : LEASE OF APARTMENT (F 08/31)
The Committee noted that, in order to mitigate accommodation costs of staff working at
the University’s Centre for Indian Business and elsewhere in the Delhi area, approval
had been granted by the Chairman of the Committee for the University to lease an
apartment near Delhi, India, for one year effective from 3 November 2008 at a cost of
£8,400 per annum.
08/42 TOXIMET LIMITED – SPIN OUT COMPANY (F 08/32)
The Committee recalled that the Memorandum of Understanding with Greenwich
University Enterprises Limited required the approval of Court for the acquisition or
disposal of assets, including investment in spin-out companies. In order to enable
Toximet Ltd to benefit from external investment in its technological development work,
approval had been sought from the Chairman of Court for the amendment of the
University’s agreement with Toximet Ltd. As the offer of investment had been
available only for a specified period of time it had been necessary to seek Chair’s action
between meetings. The Committee:
Finance Committee: 29 January 2009 page 7
agreed to recommend to Court endorsement of the approval granted by the
Chairman of Court, in order to enable the company to benefit from external
investment, that the Shareholders’ Agreement of Toximet Ltd be amended
resulting in a reduction of the University’s shareholding to 10.24%.
08/43 MINUTES OF SUBSIDIARY COMPANIES’ MEETINGS
The Committee received the minutes of the following meetings:
i Centre for Contaminated Land Remediation – 21 November 2008 (F 08/33)
ii Greenwich Property Limited – 21 November 2008 (F 08/34).
08/44 APPROVAL OF ORDERS OVER £150,000 (F 08/35)
The Committee approved, subject to the relevant School or Office having sufficient
funds for the purchase and to compliance with the University’s Financing and tendering
Regulations, the following purchases of items exceeding £150,000:
Refurbishment of kitchens, toilets and showers in Phase I of the
Student Village, Avery Hill Campus £205,000
Programmed redecoration and backlog maintenance at the Avery
Hill, Greenwich and Medway Campuses £300,000
Procurement & Business Services for Schools, Offices and Departments:
Provision of Professional Services (Legal Services) £400,000
The meeting ended at 6.55 pm.
T A Brighton
LC/FinanceCommittee/2008-2009/minutes\2009 January 29
Finance Committee: 29 January 2009 page 8