Minutes of the Finance Business Operation - 30 September 2025

38/25. Election of Committee Chair for Duration of Minute Number 39/25

Resolved: That P. Adams be appointed Chair of the Committee for the duration of Minute Number 39/25.

P. Adams in the Chair.

39/25. Estates Update (Confidential Appendices, Agenda Item 9)

The Committee received a confidential report (previously circulated) providing an update on estates-related projects aimed at improving the college’s capacity and infrastructure. All governors not on the Committee had been invited to dial into the meeting for this item.

Details are set out in a Confidential Minute.

40/25. Election of Committee Chair for 2025 - 2026

Resolved: That M. Hartland be appointed Chair of the Committee for 2025 - 2026.

M. Hartland in the Chair.
 

41/25. Appointment of Vice Chair

Resolved: That J. Jethwa be appointed as Vice Chair of the Committee for 2025 – 2026.

42/25. Declarations of Interest

No pecuniary interests were declared.

43/25. Minutes of Meeting Held 01 July 2025 (Appendix – Agenda Item 5)

Resolved: That the Minutes of the meeting held on 01 July 2025, be approved as a true and correct record.

44/25. Matters Arising

Minute No. 35/25 – Committee Self-Assessment

Further to FBO Min No 35/25, the outcome of the committee self-assessment undertaken after the last meeting was presented, which provided assurance on the effectiveness of the role of the Committee. The Board had also recently made an appointment to further broaden its financial skills base; this appointee was now a member of the Committee.

College Rebrand

The Committee congratulated the P/CEO on the successful rebranding of the college.

45/25. 2024 – 2025 Out-turn Update (Confidential Appendices - Agenda Item 4)

The Executive Director of Finance (EDoF) presented the final out-turn for the financial year ending 31 July 2025 (previously circulated).

The Committee reviewed the out-turn and noted -

• • • That total income for the year exceeded the budget.
    • Pay costs were above budget and reflected a year-on-year increase.
    • The pay-to-income ratio stood at 72.5%, slightly below the budgeted figure of 72.7%. The Committee accepted this as it had previously discussed.
    • Non-pay expenditure exceeded the budget but was slightly lower than the previous year.
    • EBITDA was marginally above budget and significantly improved from the prior year.
    • The operating surplus was below budget and lower than the figure recorded in 2023–24.

Final income funding claims were not due until 23 October 2025, and the EDoF explained that late claims or adjustments might slightly amend the reported position. Additional depreciation costs had been recognised on capital work-in-progress assets, contributing to higher interest and accounting costs.

The Committee also reviewed key changes to the out-turn since the May 2025 forecast (P10), including:

• • • A higher-than-forecast High Needs E3 final claim.
    • Reduced apprenticeship income due to timing of End Point Assessments. In response to a question, the P/CEO explained the challenge presented in securing timely assessments for Apprenticeships because of the limited availability of EPA for certain standards.
    • Lower Adult Education Budget (AEB) delivery in devolved regions.
    • Depressed full-cost income due to AM2 testing capacity being reserved for internal apprentices.
    • A correction to IT licence costs and a one-off Higher Skills Injection Fund (HSIF) expenditure recognised due to clawback risk.

The Committee also reviewed –

• • • the key financial indicators and forecast financial health score of 250, which confirmed an Outstanding grade and the amount of cash reserves at year-end.
    • treasury developments, including access to overnight money market deposits and a strategy to place longer-term reserves in 95-day notice accounts to optimise returns.

The Committee acknowledged the liquidity strategy, which aimed to maintain a minimum of £500k immediately available and a further £500k accessible within 32 days. It agreed that the college would continue to manage short-term liquidity through 32-day deposits and place longer-term reserves on 95-day notice to earn additional interest.

The Committee thanked the EDoF for the comprehensive update and supported the measures being taken to secure the college’s strong financial performance and prudent treasury management.

46/25. 2025 – 2026 Budget Update (Confidential Appendices, Agenda Item 8)

The Committee reviewed an update on the 2025–26 budget and early-year enrolment activity and emerging issues in the initial weeks of the financial year (previously circulated), which provided a detailed overview of the college’s financial position and operational performance.

• • • The P/CEO provided an update on student enrolment, which was ongoing. Whilst 16 – 18 actual enrolments to date exceeded the budgeted forecast figure, a drop-off was expected before the 42 days census, which was likely to result in final numbers aligning with the budgeted number.
    • Over 200 High Needs Students had enrolled against an Element 2 forecast allocation of 155, increasing the claim from Shropshire Council via Element 3 funding. The Committee acknowledged that the Council’s financial position posed a risk of funding shortfall. However, it supported the college’s approach to recruitment.
    • Apprenticeships: new starts were forecast in line with budget expectations.
    • HE Students: new starts recorded were slightly above the budgeted number. Additional mid-year starts were planned for January/February 2026.
    • Regarding Pay Costs, whilst August pay was below budget, enrolment rebalancing was expected to increase pay costs. The P/CEO explained the contingency provisions in place to accommodate this.
    • The Committee identified that bus transport costs were projected to exceed budget due to:
      • Higher-than-expected tendered costs
      • Additional buses added to Bridgnorth and Powys routes.
      • Larger buses required for Whitchurch route.
        potentially totalling £135k for the year. Whilst the Committee acknowledged the challenge to the budget this would bring, it supported the college’s actions to support students’ travel needs and acknowledged that the college would conduct a review to identify mitigating efficiencies.

The Committee acknowledged the financial and operational implications of the early-year trends and thanked the EDoF for the detailed update.
 

47/25. Draft Committee Work Plan 2025 – 2026 (Appendix – Agenda Item 10)

The Committee reviewed and AGREED the Draft Workplan for 2025 – 2026 (previously circulated).

48/24. Risk (Appendix - Agenda item 11)

The EDoF explained that the Senior Leadership Team (SLT) had reviewed the Risk Register and the revised 2025 – 2026 Strategic Risk Register would be presented to the Board for approval at its December meeting.

The Committee examined those risks within its remit and agreed that they had been identified and adequately discussed at the meeting, particularly the following key risks:

• • • FBO26: Planned defunding of AGQs in 2026/27 (72% risk score).
    • Board13: Insufficient campus space to meet demand (62%).
    • FBO16 & FBO04: Funding and recruitment risks for High Needs and HE learners (38% each).
    • Other risks included staff absence, apprenticeship compliance, and budget underperformance, with scores ranging from 6% to 16%.
      
      Going forward, all committees would receive the latest relevant extracts from the ‘live’ 2025 - 2026 Strategic Risk Register, to ensure they were kept up to date with risk mitigations and risk score movements.

49/24. Date of Next Meeting – Tuesday, 04 November 2025 from 5.30 p.m.

The meeting concluded at 7.50 p.m.