Recent Council Minutes

» 28 October 2012

University of Derby

Minutes of the meeting of Governing Council, Friday 26^th October 2012

Membership

• Mr Chris Hughes (Chairman)* P
• Mr Ian Gibbard Chairman FEGP A
• Mr Dominic Anderson P
• Mrs Tina Heathcote P
• Mrs Susan Ambler P
• Ms Joanne Kay P
• Mr James Beckett P
• Councillor Andrew Lewer P
• Mr Neil Calvert P
• Dr Antonios Platsas P
• Professor John Coyne P
• Mr Peter Richardson P
• The Venerable Dr Christopher Cunliffe A
• Ms Andrea Robertson-Begg P
• Mrs Olivia Dean P
• Mr Martin Rogers Chairman Audit & Risk A
• Mrs Elizabeth Fothergill Vice-Chairman P
• Dr Ian Whitehead P

(*Also Chairman of the Nominations and Remuneration Committee)

In attendance of the seminar and the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Philip Plowden, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

Seminar

The University of Derby Students' Union sabbatical team and Chief Executive delivered a superb presentation on their respective roles and the planned priorities for the year ahead.

Minutes

1. The Chairman welcomed Mrs Tina Heathcote and Mr Ian Whitehead

2. Apologies were received from Venerable Dr Christopher Cunliffe, Mr Ian Gibbard and Mr Martin Rogers.

3. There were no declarations of interest by the members of the Governing Council.

4 The minutes of the meeting of the Governing Council held on 6^th July 2012 were approved with the correction of the name of the Chief Executive of UD Students' Union: Mr Robert Hayes.

5. Matters arising.

6. Council noted that the Vice-Chancellor had updated governors on the student recruitment position in early September as promised in July.

7. Chairman's report

The Chairman announced that there was a full agenda and as always, he would assume that members had read the papers. The FE Governance, Audit and Risk and FEGP Committees have examined the papers thoroughly and he would invite the chairs or members of each committee to comment. The Chairman anticipated important discussion on the results of the National Student Satisfaction Survey, student recruitment for 2012/13; and he underlined the importance of the University achieving its EBITDA and maintaining a healthy cash-flow position. He had greatly enjoyed the event to celebrate the opening of Oaklands Outdoors Training Centre. The Chairman reported that he had attended meetings of the Council of University Chairmen, the Leadership Foundation and a Headmasters Group in Leek and generally tried to get a feel of how the University is perceived in the sector, community, staff and students. The message is that the University of Derby has considerable momentum with much to build on. Getting our message right and being clear who we are will be the focus for the residential strategy meeting at Makeney Hall in November.

The Chairman had steered the development of the performance matrix which will be presented for consideration in this meeting. If this is agreed by Council then future agendas will be driven by the matrix so that quality, recruitment, and achievement come first, with the financial reflecting the University's performance in these areas. Every decision has to contribute to the future sustainability and growth of the University and the achievements of its students and staff.

8. Vice-Chancellor's report

The Vice-Chancellor presented his written report and provided a verbal update. He reported that the Russell Group universities had recently published a paper titled 'Jewels in the Crown' in which they painted themselves as the top 24 universities in which resources needed to be concentrated. The Vice-Chancellor observed that the HE student numbers policy which the Russell Group had successfully persuaded the government to adopt had not resulted in the outcome that they had wished. They are on average 370 students short of their target student numbers for September 2012. By comparison the University is 330 students short of its target. The Russell Group universities believe that there is a case for further concentration of research funding in their favour. This claim omits to mention the key fact reported by Million+ (Published report, October 2012) that in 2010/11 the Russell Group received 69.6% of public research funding from HEFCE and the research councils and yet only produced 62% of the excellent international and world class research according to RAE 2008. Conversely, in 2010/11 the Million+ universities had received 5.4% of the funding but had produced 9.2% of excellent international and world class research according to RAE 2008. The Russell Group paper was almost breath-taking in its disingenuous selection of facts.

The Vice-Chancellor was pleased to report the successful recruitment by UD Online (UDOL) which is well ahead of the expected income. Also good news was the decision by HEFCE to fund a further £297 k to assist with the transition to an entirely self-sustaining position for the University of Derby Corporate. Although the University had submitted the case for the further funding following the sudden cessation of support funding in 2011/12, the extra funding had been designated for 2012/13 and would be accounted accordingly. The Vice-Chancellor noted that this was the last element of public funding from HEFCE. Hereon the University of Derby Corporate has to be self-sustaining.

The Vice-Chancellor reported that although the University had made a considerable effort to win the contract with Montpelier, the contract had in the end gone to De Montfort University which had submitted a bid which would yield very modest levels of student fee income. The Vice-Chancellor was not entirely sure that the De Montfort bid price would be sustainable.

He drew attention to the World Premier of Angela's Ashes at Derby Theatre next week. Frank McCourt's family will be coming. The Vice-Chancellor was pleased to report good developing relations with Derby College and there were prospects of collaboration. He also reported that the establishment of a University Technical College at Derby was now proceeding and the University would be a participant.

The Chairman wondered who would provide the voice for the Higher Education sector with the different parts so much in competition with one another. The Vice-Chancellor noted that Universities UK had supported London Metropolitan University in its conflict with the UK Border Agency. Mr Neil Calvert asked if the University planned to establish any collaborative arrangements with Russell Group universities. The Vice-chancellor explained that he had made approaches to both the University of Nottingham and the University of Birmingham regarding the proposal to establish a regional engineering hub. He is on good personal terms with the respective Vice-Chancellors. However, it would appear that they will not enter collaboration with institutions outside the Russell Group because this might compromise their membership and so the approach was declined.

The Vice-Chancellor commented that some commentators now believe that the university sector is becoming increasingly polarised with research intensive universities at one end of the spectrum and teaching-led universities at the other end of the spectrum teaching the curriculum set by the research intensive universities. Ian Whitehead commented that on visit days, the pre-occupation of parents is with the amount of staff contact time that their sons and daughters will receive in return for the high student fees. As the fees approach £9,000 at most universities, the tuition has to be seen to be good value for money.

The Chairman thanked Professor Coyne for this Vice-Chancellor's report.

9. The University of Derby Students' Union

Mr James Beckett and Mr Dom Anderson reported that the UD SU had taken the opportunity to revise the format for the Key Performance Indicators and these would be presented at the next meeting. There had been a good take-up of membership of clubs and societies. They noted particularly the rise in interest in LGBT (Lesbian, Gay, Bisexual and Trans-sexual) matters. The UDSU Council had discussed the modest student perception of the value of the UD Student's Union as reported in the National Student Satisfaction results. They noted that the UDSU would feel much less relevant to part time and distant learning students. Nevertheless there was a challenge and they would rise to it. They aimed to get a greater participation in elections and they realised that it was necessary to ensure that students were more aware of work and activities undertaken on their behalf. Many students did not appreciate that Keddies is run by the Students' Union.

The Annual General Meeting

The Chairman declared open the Annual General Meeting of the University of Derby Private Company, Limited by Guarantee and Exempt Charity.

10. The Annual Statutory Accounts for 2011/12

The Deputy Chief Executive and Finance Director was pleased to report that it had been a very successful financial year for the University. The consolidated statutory result was £8.9m. The University Group had made a consolidated operating surplus of £11.4m before pension costs (£1.7m) and exceptional items (£0.8m for exceptional re-structuring). The University has a net asset position of £218m. He was also pleased to report that the audit had been clean and smooth with no material matters to report.

Mr Peter Richardson was invited to speak on behalf of Audit and Risk Committee. He was pleased to echo the Finance Director's remarks. The external audit had been thorough and there were no matters for concern. He added that the Audit and Risk Committee had discussed the rising pension liability and reported the resolve to maintain a close watch on developments. The Committee was satisfied that the University has the necessary resources. Mrs Liz Fothergill confirmed a similar view on behalf of FEGP. She remarked that the position was a pleasing one for the University.

Councillor Andrew Lewer commented that auto-enrolment of new Council employees is progressing. He anticipated that some might un-auto-enrol early in the New Year. The Finance Director added that the University had explored to see if the entire pension scheme for Leek employees could be transferred to Derbyshire, but this would not only be too cumbersome with regard to staff who have already retired but also required Secretary of State approval. Therefore only current staff would be transferred. Councillor Andrew Lewer declared an interest as the university is in part in the Local Government Pension scheme administered by Derbyshire County Council.

Mr Dominic Anderson noted the net assets and asked where the University planned to prioritise its investments. The Deputy Chief Executive replied that resources would be invested in improving the staff - student ratio, improving teaching accommodation and getting it up to the silver and gold defined standards as appropriate. The University also planned investment in sports facilities, in particular to build a proposed sports centre. The Chairman emphasised the importance of disseminating good news on University developments. This could be produced on a compact format. James Beckett UDSU president added that a student version would be valuable. The Vice-Chancellor remarked that this was a cracking good idea!

DECISION: Governing Council approved the statutory accounts.

11. (i) To approve the letter of representation

The Governing Council considered and accepted the letter of representations which had been prepared by KPMG.

DECISION: Governing Council approved the letter of representation.

(ii) DECISION: Governing Council approved the appointment of KPMG as the External Auditors for the financial year 2012/13.

The Chairman, Vice-Chancellor and Company Secretary signed the Accounts

The Chairman declared the Annual General Meeting closed. The Council meeting continued.

OTHER DECISION ITEMS

12. The re-appointment of the Chancellor

Governing Council considered the recommendation from Nominations and Remuneration Committee that the Duke of Devonshire should be re-appointed Chancellor of the University for a second term of five years with effect from 2013. The Governing Council endorsed the comments of the Chairman that the Duke had been a passionate and enthusiastic figure-head for the University. He had expressed his pleasure in being invited to continue in the role of Chancellor.

DECISION: The Governing Council was delighted to re-appoint the Duke of Devonshire as Chancellor of the University for a second five-year term which will expire in 2018. Clerk's note:There is no restriction to the number of times a Chancellor may be re-appointed. Re-appointment is entirely a matter for the Chancellor and the Governing Council.

13. The appointment of Ms Judy Samuel and Mr Nigel Downs as new independent members of the FE Governance Committee

The Clerk tabled short biographies of the two prospective members of FE Governance Committee. The Chairman commented that both were ideally suited to the role of member of the FE Governance Committee. They brought valuable external experience.

DECISION: Governing Council was pleased to confirm the appointment of Mr Nigel Downs and Ms Judy Samuel as independent members of the FE Governance Committee.

Annual reports

14. The Annual Report of the Audit and Risk Committee 2011 -12

Governing Council received the report from Audit and Risk Committee. The Chairman remarked that the University was pleased with the performance of Pricewaterhouse Coopers thus far. It was noted that the final reports from Pricewaterhouse Coopers are awaited.

DECISION: Governing Council approved the report subject to the inclusion of final additional information.

15. The Academic Board annual report

Professor Liz Barnes presented the annual report of Academic Board. She reported that the introduction of the 20 credit module as the standard size across the University curriculum had gone smoothly and this offered opportunity for deeper learning. Ian Whitehead commented that the change to percentages was pleasing because it would enable assessors to give more precise feedback to students as to the standard of their work.

Councillor Andrew Lewer asked about the possibility of a Hotel management school in Buxton operating along the lines of the Swiss Hotel Management Schools. The Vice-Chancellor explained that the University aims to make Buxton a centre of 'Real World Learning' which encompasses outdoor pursuits, Spa Management and hospitality management. Councillor Lewer commented that there was a strong interest and support for the hotel school model for tourism. It was clarified that students are not paid employees and therefore do not come subject to employment law. The work is an integral part of their learning experience.

DECISION: Governing Council approved the annual report from Academic Board.

LEEK COLLEGE

16. The plan for post-merger integration of the FE provision at Buxton and Leek

Professor Barnes reported that the new integrated FE Division is becoming operational. A draft paper on harmonisation had been produced. The structure would be finalised shortly. Good work had been undertaken by Mr David Grocock the Acting Principal. The advertisements for the post of Principal had attracted 28 applications and these had been short listed to a first interview stage of six applicants. Now there was a second round with just two candidates for interview on 31^st October 2012. It had been a strong field and so the University is confident of making a good appointment.

Mrs Fothergill asked for an update on the anticipated redundancies. Professor Barnes replied that there would be some redundancies but these would involve support staff and not academic staff. The numbers involved were not known yet. The Vice-Chancellor wished to commend the support received from the Skills Funding Agency which had declared a willingness to make a within-year increase in funding if the recruitment warranted it. Recruitment at Buxton was down but recruitment at Leek was positive. Planned site development at Leek is proceeding and further plans are currently being considered by the Skills Funding Agency.

DECISION: Governing Council endorsed the post-merger FE plan

PERFORMANCE REPORTS

Academic matters

17. A HESES HESA update on the University undergraduate non-completion position

The Vice-Chancellor presented the update report on non-completion position and was pleased to report that the proportion of undergraduate non-completions had reduced to just 9.5% which was a huge improvement on two years ago. This was combined with the best ever proportion of students gaining a good honours degree. He noted however that the University average proportion of good honours degrees (55%) was significantly less than the average for the sector (67%). There is a perception that there may be some element of mark inflation in this matter. For this reason it may be advantageous to have a system less chunky than the honours classification. Some advocate a grade profile method; others prefer the grade point average although the latter has just been rejected as a possible method in a review that was being undertaken by one university. The University of Derby has been participative in the work to provide each student with a HE Academic Report which would be a comprehensive record of achievement and far more informative than the honours classification.

Governing Council thanked the Vice-Chancellor for his report.

18. The National Student Survey 2012

Professor Philip Plowden presented the result of the National Student Satisfaction survey 2012. He was pleased to report that the University overall average had improved from 81% to 83%. There were also 23 programmes which had scored over 90% and seven that had scored 100%. He was delighted to report that History had recorded 100% for the third successive year. This was an extraordinary result. However, he had also to report that the national average had also gone up by 2% from 83 to 85% and a poorly understood benchmark indicator had leapt from 81% to 85%. So the University was still below the average in the sector. Some subjects had disappointing scores. Some were in the 50s and one was just 40%.

Professor Plowden reported that he had met with the successful teams to find out more about what works, and he has also held meetings with the teams that have had poor results. He drew the Council's attention to his finding that poor results were rarely just down to 'bad teaching' by a less than committed team. In one instance a poor result come from an area with only one member of staff holding a secure fractional contract in the team. The other staff are associate lecturers on sessional contracts. This makes it hard to co-ordinate the delivery effectively.

Mrs Fothergill asked if there was any perceived link between the strong performance in the National Student Satisfaction survey, and recruitment in September 2012. Professor Plowden replied that he had not identified such a correlation. Dr Antonios Platsas underlined the importance of confidence in good academic performances. The Finance Director pointed out that there were instances of allocated funds for staffing which had not been used and this amounted to a risk to the quality of delivery. Mr Punchihewa also passed the question of the ability and the experience of the deans to make business decisions. Professor Plowden agreed but described the difficulty which some academic managers face. If the student recruitment to a new programme in its first year is below target, then should the subject continue to invest in further staff recruitment or would it be advisable to wait until the programme consolidates its recruitment? A prudent response might be to wait until the case for recruitment is properly evidenced by actual student demand. In this case there might be under-spending in relation to budget.

Through further discussion it was noted that the national Student Satisfaction survey does provide information which is used in staff appraisal. The University and College Union had not been happy with this and felt that it was an infringement of the principles of academic freedom. But the University is convinced that staff do have an influence on student satisfaction and so it should contribute to the appraisal outcome. The Vice-Chancellor rejected the notion that there was an infringement of academic freedom. Staff clearly have a responsibility and duty to determine how best to deliver the curriculum but there can be no academic freedom to teach to a poor standard. Andrea Robertson-Begg pointed out that it is every member of staff's responsibility to ensure that students have good cause for satisfaction.

The Chairman thanked Professor Plowden for the most useful paper and for leading a valuable debate.

The Key Performance Measures and Sustainability

19. The October 2012 edition of the University's Key Performance Indicators

The Vice-Chancellor presented the Key performance Indicator dash board which showed that the University was largely meeting its target indicators. He was aware that Governing Council expected these to be relatively demanding.

Council received the KPI dashboard.

(ii) The Corporate Risk Register

The Governing Council received the Corporate Risk register which had been updated at the beginning of October. This register had been the subject of scrutiny by Audit and Risk Committee and FEGP. The Council noted that FEGP had requested to addition of a risk element relating to the rising liability arising from the Local Government Pension Scheme and the introduction of auto-enrolment of employees into the pension schemes.

Council received the Corporate Risk Register

(iii) The institutional performance matrix for 2012/13

The Chairman presented the performance matrix for 2012/13 which was tabled at the meeting. This had been the subject of detailed and careful development. It was designed to be suitably challenging and emphasise our academic ambition. Governing Council agreed that the performance matrix was appropriate and acceptable.

DECISION: The Governing Council approved the performance matrix.

(iv) The annual HEFCE letter of assurance issued in September 2012

The Vice-Chancellor presented the letter from HEFCE which confirms that the University is not assessed to be at higher risk. He felt that the accompanying tables of financial information which benchmark the University in relation to the HE sector was useful. This showed that the University compares well with the sector average. It was now a completely transformed position from the deeply the worrying position which he inherited on arrival in 2004.

Council formally received the HEFE letter of assurance.

20. The Deputy Chief Executive and Finance Director's report

(i) The Budget, plan update and cash-flow

The Chairman asked the Deputy Chief Executive and Finance Director whether the University can achieve the budget which was set in July 2012 for 2012/13? The Deputy Chief Executive replied that it was not possible to give a firm answer at this moment. The University is £4m down in terms of income from student recruitment. Clearly there is a necessity to recover the position in January but that will be challenging. The Vice-Chancellor explained that the University is 336 short of its target in the September recruitment of FT undergraduate students. If the University does not bring the new recruitment to within 152 of the target, it becomes susceptible to the HEFCE process of re-basing the student number contract (SNC). If this happened the total student number over a three year cycle would fall by about 1,300 students which is a serious reduction in the planned income. A financial gap would quickly open up and the current assets would be rapidly eroded. The University cannot risk a situation where it is subject to the discretion of HEFCE in the matter and so there is no option but to recruit about 180 students in January 2013 to make good the shortfall. The indications are that the University could recruit 70 to 80 in strongly recruiting subjects but the target of 180 would be very testing. Governing Council wished to see the challenging target met in January.

In discussion it became clear that there are students who regret not taking up places at University in September and are reconciled to apply next September. They might be interested in January entry. In addition, there are students who failed GCSE English when the examination board moved the grade boundaries and are re-taking the examination this November. They may also be interested in a place.

Peter Richardson wanted to know if there was a vigorous marketing campaign in progress. This was essential. The Vice-Chancellor explained the complex picture of recruitment in September. Some universities such as Wolverhampton and Bedfordshire had been successful despite the general short fall elsewhere. The Chairman commented that as an academic institution the University had to make every effort to understand the reasons for success and failure and the variations across the sector.

Governing Council received and accepted the following papers.

(i) The Further Education update

(ii) The Group structure

(iii) The Annual Treasury Report

(iv) The Treasury Management Review

(v) The Estates Project Update including a proposed Leek College Capital Project currently with the Skills Funding Agency

(vi) Update on IT Strategy

(vii) The Capital Expenditure Allocations Report.

ACTION: Governing Council agreed to hold a meeting at Leek College later this academic year.

Derby Theatre, University of Derby Corporate and University of Derby Online

21.Governing Council received reports on the following areas. Each had been considered in some detail by FEGP.

(i)a report on the progress of Derby Theatre

(ii) the University of Derby Corporate

(iii) The University of Derby online

Admissions and applications

22. The 2012/13 recruitment position

Professor Barnes presented her written report. It was noted that the main points had already been the subject of discussion. Professor Plowden commented on international student recruitment. He was pleased to report that there were 137 applications under the Brazil - UK programme which was promising. However, the overall recruitment is extremely disappointing. Only 120 students arrived compared to the 700 students last year. He recognised that a very significant part of this was probably due to the unfavourable reputation being generated by the activities of the UK Border Agency. The University is not alone. Other universities had experienced reductions in student numbers. It was noted that even UK friendly countries see the environment here as hostile. Governing Council noted that fortunately the University did not predicate its budget on very high numbers of international students. It is possible that the rise in UDOL recruitment may have longer term benefits for international recruitment. Susan Ambler expressed her concern regarding small student numbers and the international student experience.

Governing Council received the report.

Human Resources

23. The Human Resources report

The Vice-Chancellor presented the report. Council noted that the University and Colleges Union had decided not to proceed with strike action or action short of strike in the current year. However, as growth returns to the UK economy and interest and inflation rise, there will be pressure on salaries to increase. This is likely to be an issue for future budgets.

24. The quarterly environmental responsibility report

Professor Plowden presented the environmental responsibility report. He drew attention to the very good relative performance of the solar panels to the wind turbines. The latter had underperformed due to an alleged 'lack of wind'.

The report was received and much appreciated. The Chairman stated that he aims to spend time on each environmental responsibility report.

Chairmen's reports

25.Mrs Fothergill reported on a very productive and useful meeting of FE Governance Committee held in September. The Committee had given close consideration to the terms of reference.

.INFORMATION MATTERS: The following documents are located on the Governing Council website

26. The confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 11^th June 2012.

27. The confirmed minutes of the Audit and Risk Committee of 7^th June 2012

28. The confirmed minutes of the Further Education and Governance Committee of 19^th June 2012 and unconfirmed minutes of 25^th September 2012

The annual Residential Meeting of the Governing Council, Corporate Management Team and Academic Board is scheduled for Thursday 22^nd and Friday 23^rd November 2012 at Makeney Hall, near Milford. The meeting commences at 1.30 pm am on the Thursday and closes at 1.00 pm on Friday.

The next meeting of the Governing Council will be held on Friday 25^th January 2013 at 12.30 pm at the Kedleston Road Site, Derby.

Paul H Bridges

Clerk to the Governing Council

27^th October 2012

» 6 July 2012

University of Derby

Minutes of the meeting of Governing Council, Friday 6^th July 2012

Membership

• Mr Chris Hughes (Chairman)* P
• Mr Ian Gibbard Chairman FEGP P
• Mr Dominic Anderson A
• Ms Joanne Kay A
• Mrs Susan Ambler P
• Councillor Andrew Lewer P
• Mr James Beckett P
• Dr Antonios Platsas P
• Mr Neil Calvert P
• Mr Peter Richardson A
• Professor John Coyne P
• Ms Andrea Robertson-Begg P
• The Venerable Dr Christopher Cunliffe P
• Mr Martin Rogers Chairman Audit & Risk P
• Mrs Olivia Dean A
• Mrs Elizabeth Fothergill Vice-Chairman P

(*Also Chairman of the Nominations and Remuneration Committee)

In attendance of the seminar and the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Philip Plowden, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

Meeting held at the Oaklands Outdoors Pursuits Leadership Centre, Buxton. A full tour of the facilities was provided by Linda Birch and her academic and technical team in torrential summer rain.

Minutes

1. The Chairman welcomed members and thanked Linda Birch and her team for the excellent tour.

2. Apologies for absence were received from Olivia Dean, Dom Anderson and Joanne Kay. Apologies for late arrival were received from James Beckett, Neil Calvert, Cllr Andrew Lewer and Peter Richardson. Despite his best endeavours Peter Richardson was finally unable to make it through the flooded roads. Peter Richardson and Olivia Dean sent written comments to the Clerk regarding the proposed merger with Leek College.

3. There were no declarations of interest by the members of the Governing Council.

4 The minutes of the meeting of the Governing Council held on 23^rd March 2012 subject to a correction of the line of reporting in the discussion of the new Further Education structure. The new Principal will report to a Pro Vice-Chancellor of the University.

5. Matters arising: The Vice-Chancellor confirmed that he has commissioned a study of the economic contribution of the University to the region and this was now being checked by Mel Powell in the Derby School of Business. It had been provisionally estimated that the University contributed about £200m per annum to the local economy. Christopher Cunliffe suggested that this might be useful to the University in an advertising campaign.

6. Outstanding matters: With regard to the proposed University Technical College the University had decided to monitor the situation rather than to actively take the matter forward. The reason for this is that those in secondary education and the Derby City Council wished to see better schools rather than more schools. The University would not wish to see the establishment of a University Technical College harming relationships the University enjoys with existing schools.

7. Chairman's report: The Chairman commented on how delighted he was regarding recent student exhibitions and performances in the Arts. The performance of Blonde at Derby Theatre had been stunning. He had also been impressed by the Film evening and the Fashion show. The recent High Sherriff's Reception had been a reminder of the splendour of the Dome.

8. Vice-Chancellor's report; the Vice-Chancellor presented his written report and confirmed that the University is in good shape. He was pleased to announce that HEFCE had now agreed to provide £987 k transitional funding to support the work of University Derby Corporate over the next three years with a further £320 k still in prospect for the current year. This was broadly in line with the original agreement and would allow the UDC to continue in accordance with its plan to progressively increase income through business engagement. The Vice-Chancellor also indicated that he believed that student attainment was rising. He had seen superb shows and so he was not surprised to learn that textiles had nine first class graduates this year. The Vice-Chancellor was also delighted to report that the University students on the LLB had won the Blackstone National Advocacy Competition which is a contest of some standing.

9. The University of Derby Student Union: James Beckett UDSU President confirmed that the UDSU had now appointed Robert Hayes from the University of the Creative Arts as the new Chief Executive with effect form 1^st August. The Council congratulated the UDSU on its continuing good progress evidenced by the key performance indicators. It was very pleasing indeed to note that Dom Anderson had been elected to the National Union of Students.

DECISION MATTERS

10. The Proposal to merge with Leek College of Further Education and School of Art

Council embarked on a detailed consideration of the proposal to merge with Leek College of Further Education and School of Art. Council received three papers to facilitate the discussion: (i) The strategic context (ii) The financial report and (iii) The formal proposal for the merger.

Professor John Coyne explained that the primary purpose of the merger was two fold. First it was designed to give the FE provision at the University critical mass which was becoming increasingly difficult to achieve with Buxton alone. Secondly, he planned to increase the FE footprint in the north of the county in the medium term. Buxton College and Leek College are amongst the smallest FE providers in the country and there is downward pressure on their contracts. They are competing against one another to some extent. Merger would potentially enable them to improve efficiency and complement one another in the programmes that they offer. There were also broader reasons for the proposal. It was extremely important to appreciate that if the Buxton FE provision terminated then the HE provision would not justify the Buxton Campus. The HE provision would need to double in size quite quickly. The need to protect ad promote FE has implications for the HE provision of the University. Professor Coyne also pointed out that FE provision in small market towns such as Buxton and Leek were potentially more significant to the local community than provision in large metropolitan areas.

Hari Punchihewa summarised the financial factors. He noted that the recent report of the actuaries of the Local Government Pension Fund had indicated that the pension deficit relating to 66 staff at Leek was £1.35m. However, we cannot get the exact position as a number of staff are leaving or being made redundant. It should be noted that no pension scheme is fully funded. So the University would not expect to eliminate the pension deficit altogether. Therefore, it is prepared to accept a deficit which needs to be supported through a combination of cash payment and/or increased employer contribution as negotiated with the Fund. There was an important issue over the transfer of staff. The University needs to decide whether to just transfer the staff who would be continuing or transfer the whole scheme. The Finance team will look very carefully at the factors with the help of HR once we receive the up to date valuation reports. The team will also discuss the position with the relevant funding bodies. It may not be necessary to pay the full amount of the deficit into the Scheme.

There has been a useful and positive meeting with the officers of the Skills Funding Agency. The SFA is now prepared to help the merger succeed. One tangible source of assistance is that if the merged provision does succeed in generating higher student numbers, the SFA has indicated that it is prepared to help within year by increasing the size of the contract.

Ian Gibbard felt that the paper from the Finance Director was excellent and it did identify some significant concerns. The basic point which has to be addressed is: we already have one college in which the FE business is problematic; why acquire another one? John's strategic paper addresses this question effectively but Council needs to fully understand the numerous liabilities which are broadly financial.

Liz Fothergill was satisfied that there is a strategic fit and a cultural fit which is positive. However, Buxton College is in the process of removing a managerial layer which had only been in place about two years. The layer had been deemed necessary to improve quality and this remained extremely important. So was it wise to strip out this layer at the point of merger and when it was hoped to form the basis for future expansion? Professor Barnes replied that there had been benefits for the additional management layer over the past two years but with the funding cuts costs had to be eliminated prior to the merger and it was important to protect front line delivery. Some adjustments would need to be made in terms of staff responsibilities, ways of working and possibly additional administrative support would be required to ensure sufficient resource for oversight and management of quality. However, we are confident that we will be still have sufficient staff to protect standards and promote growth in the merged colleges.

Neil Calvert felt that the most important factor was the strategic fit. He was convinced that the present position was not sustainable in the future. Martin Rogers commented that if this proposal had come as simply a stand-alone opportunity then he would not be recommending the acquisition. But he was convinced that the strategic case was a strong one and so he was supportive of the merger proceeding. Cllr Andrew Lewer observed that it was important not to adopt the argument that because the process had reached this stage it was too late to withdraw now. There must be a convincing case which outweighs the identified liabilities. He felt that it was a very difficult decision.

Peter Richardson submitted written comments which were read to the Council. He believed that the proposal made good strategic sense and so he would support the merger (Option 1). But he did have a number of concerns regarding the implementation. He wanted to know more about the competencies of the teaching staff. Skills, culture and working practices might be so different that significant change may be necessary with the associated cost. He advised that the University should not expect to increase FE income in the first three years while it addresses staffing issues. Mr Richardson also felt that it would be inadvisable to be unequivocal regarding the retention of the Leek brand. A new incoming vice-chancellor might feel different. He recommended a slightly more equivocal wording. This was agreed by members of Council. Mr Richardson also noted the need to check the business and IT systems because these could be problematic and he observed that this would be a further stretch for the very capable top management team. Olivia Dean also sent a communication supporting the merger for strategic reasons but emphasising the major work necessary to address the liabilities.

Dr Antonios Platsas commented that the case was very balanced. Andrea Robertson-Begg feared the merged FE provision would be a continuing drain upon the University resources and so was not convinced that the merger should proceed. Susan Ambler expressed a similar view.

The Chairman commented that if the University did not proceed with the merger than there were strong adverse consequences for both FE provision at Buxton and also HE provision at Buxton. For this reason the strategic case was very powerful.

The Vice-Chancellor wished to acknowledge the point made by Andrew Lewer. He agreed that the case was marginal because one had to balance strategic necessity against addressing significant issues. He did feel quite strongly that delay (Option 2) would not be helpful. This would simply make merger less likely as confidence drained from all stakeholders. If the University's FE provision had been located in the south he would not attempt to compete with Derby College; he would license the provision. But in Buxton FE is a critical part of the University's provision. The Vice-Chancellor pointed out that the University connection to the FE College provision was an asset. Interest in Leek College has risen since it was learnt that it may become part of the University of Derby. Thus the University brand in this context has been helpful. However, the association with FE has no benefits for HE recruitment. The FE association can even be negative in its effect on HE recruitment. And so there is a delicate balance to be achieved in the application and use of the University brand.

James Beckett was supportive of the merger. He had noted the new possibilities for the Students' Union in forging close links with Leek College. There would be some additional operational costs and he would need to discuss these with the University.

The Chairman then asked the Council if it therefore wished the proposed merger to proceed. The Vice-Chancellor commented that while the strategic case was powerful, he had no illusions as to the future - the key task would be the successful delivery of the management plan - it would be tough.

The Governing Council agreed that it would consider Option One which is to accept the risks and proceed with the merger, even though the actual cost of the liabilities are not known at present on the basis that this is an important merger for the group and any further delay may put the FE provision at Buxton under risk. The option also includes preparing a merger plan using reasonable estimates of the substantial liabilities to minimise the exposure. The Chairman offered a vote but there was no request to this effect. There was a clear consensus view:

DECISION: The Governing Council approved the proposal to merge with Leek College of Further Education and School of Art and to accept all the assets, property, rights and liabilities of the College Corporation in accordance with the Transfer Deed with effect from 1st August 2012.

DECISION: The Governing Council consented to the letter to be sent to Mr Geoff Russell, Chief Executive of the Skills Funding Agency. The letter will be amended to indicate that the University undertakes to ensure that the particular identity of the College is preserved.

DECISION: Governing Council give authority to the Vice-Chancellor and the Deputy Chief Executive and Finance Director to sign the necessary legal documents relating to the merger.

The Vice-Chancellor indicated that if during the process, anything else emerges which potentially goes beyond the mandate given by the Council then the Vice-Chancellor and Deputy Chief Executive and Finance Director undertake to return to the Council.

THE BUDGET 2012/13 Hari Punchihewa

11. The budget 2012/13

Ian Gibbard reported on the close consideration given to the budget by Finance, Employment and General Purposes Committee. He explained that the decline in FT undergraduate applications had caused FEGP to think carefully but it had decided that since the budget included compensatory elements and had been constructed prudently, the budget could be approved.

DECISION: Governing Council approved the budget for 2012/13.

The Financial Forecast 2012/13 to 2016/17. Governing Council noted that this was based on the existence of four tuition fee bands with effect from 2013/14.

DECISION: Governing Council approved the financial forecast for the period until 2016/17.

12. The proposed tuition fees for 2013/14

Professor Liz Barnes explained that the student response to the tuition fees had been different from expected. They were interested to know the services that they would receive given that the fees are less than £9,000 per annum. The Executive concluded that the banded approach to fees had been correct and appropriate but that a lower fee offer is a less sensitive matter to students than had been originally envisaged. So faced with the requirement to revisit the fees and amend them even before the students have arrived for 2012/13, the Executive had decided to lift the fees by 10%. This would increase income with minimal disincentive.

James Beckett was comfortable with this providing that the fees remain all inclusive: without extras. Philip Plowden pointed out that the original strategy which had been devised before he arrived had enabled the University to participate in the bid for marginal numbers which had been helpful. Neil Calvert noted that there would be a problem as the fees approach the £9,000 ceiling and the differentiation is progressively lost.

In response to a general question Professor Barnes reassured governors that prices did not increase after students started. The pricing structure remains the same for the duration of a students study with inflationary charges as appropriate.

MEMBERSHIP OF THE GOVERNING COUNCIL

INDEPENDENT MEMBERS

13. The appointment of Tina Heathcote as an independent member of Governing Council with effect from 1^st August 2012.

DECISION: Council approved the recommendation that Tina Heathcote is invited to join the Governing Council as an independent member for a three year term with effect from 1^st August 2012.

And DECISION: Sue Norgrove-Moore, Vice-Chair of Leek College Corporation should be invited to join the Further Education Governance Committee.

14. Council noted that Councillor Evonne Williams had resigned from the Governing Council because she is no longer the Derby City Cabinet member for Schools and Young People.

APPOINTMENT OF ACADEMIC BOARD NOMINEES

15. Council noted that Andrea Robertson-Begg has been nominated by Academic Board as a continuing member of Governing Council for two years until 31^st July 2014.

Mr Ian Whitehead, has been elected as the nominee for Academic Board. He will serve a three year term ending 31^st July 2015. Ian could be invited to serve a second term. He was invited to this meeting as an observer as a courtesy but unfortunately he already had another commitment which could not be changed.

STUDENT MEMBERS

16. Council noted that James Beckett and Dom Anderson were both re-elected to the sabbatical team and their current positions. They will therefore both continue to serve on the Governing Council in 2012/13.

UNIVERSITY COURT

17. (i) To consider recommendations for new members of University Court (GC/12/2/14)

DECISION:

Council approved invitations to the following persons to become members of University Court

DECISION: Council also approved the recommendation David Wild and William Barron are invited to join the Advisory Group

THE UNIVERSITY CONSTITUTION:

18. The Articles of Association

The Chairman reported that he, Professor Coyne and Paul Bridges had met with Mark Taylor of Eversheds to stress test the articles and it had been agreed to proceed. The Clerk confirmed that he had instructed Eversheds to draw up the paperwork needed for the submission. A further issue had been raised regarding Clause 24 that states that the Vice-Chancellor will confirm all suspensions and dismissals. The problem is that if the Vice-Chancellor is not a participant in the disciplinary hearings, this process could be deemed unfair. The UCU is keen for the vice-Chancellor to have responsibility for all dismissals and suspensions but it would be totally impractical for him to participate in all disciplinary hearings that might end in dismissal. This matter was being considered with the help of Eversheds. Clause 24 is the position which the University is prepared to adopt because the Vice-Chancellor can consider the documentation and decide if the decision has been soundly based.

A RESOLUTION: The Clerk explained that the Articles need to be formerly agreed by a special resolution of the Governing Council. This will be done by correspondence as soon as Clause 24 is resolved. It is necessary for 75% of Governing Council membership to agree for the Articles to proceed. Then Eversheds will submit the Articles to the Privy Council and the Charity Commissioners for approval. Approval may be a lengthy process.

PERFORMANCE REPORTS

Financial matters

19. Governing Council received the written financial report.

(iThe Year to Date financial performance up to 30^th April 2012 (University Group).

(ii) The Year to Date financial performance up to 30^th April 2012 (University)

(iii) The Year to Date financial performance up to 30^th April 2012 (DSRL)

(iv) The Further Education financial performance to 30^th April 2012 (FE)

(v) The Financial Forecast 3 University Group

(vi) The Financial Forecast 3 University

Strategic developments

20.University of Derby Corporate. The transitional grant of £971 k over a period of three years from HEFCE was welcomed. UDC now has over 3,000 learners registered.

21.Derby Theatre: governors commented on the pleasing comfort and ambience coupled with first class performances.

22. University of Derby Online. It was noted that learner numbers have exceeded the budget. The University of Derby Online has 1,800 registered learners. This development is coming on exceedingly well. It was noted that online materials could become an open educational resource, There is an opportunity for Derby to be a major international player in this area. Members were pleased to note that the UDol is obtaining independent measures of client satisfaction.

23. Estates update

The Deputy Chief Executive reported on the very full programme of summer developments, the largest of which is the Atrium project which will greatly improve the environment for students as they access their class rooms. The use of Lonsdale House has not been finalised yet. It will house some incubation units but it could also become the home for the Institute of Engineering. Alternatively, it could serve as an English venue for delivery to students from Montpelier Business School in France working in collaboration with the Business School. Work is continuing to find the source of the roof leak at the Devonshire Dome but it is proving very difficult. Mr Punchihewa planned to bring Estates Strategy 3 to Council in October.

24 Council received the IT Strategy update.

Academic developments

25. Council was delighted to receivethe news reports from the Schools prepared by Teresa Mellor and Russell Langley the new Head of Corporate Relations. It asked that its thanks should be conveyed to the compilers.

ACTION: It was agreed that the information should be placed on the website. .

Human resources

26. Council received the quarterly report on Human Resource matters. Council noted that nationally the Union and College Union has a representation which is pushing the Union hard to the left: seemingly at odds with the membership which re-elected Sally Hunt who by comparison, is less extreme. The UCU is therefore becoming increasingly confrontational. There is a lot of interest amongst universities to move towards local pay agreements which reflect local circumstances but the UCU has warned of the consequences if any university seeks to make the change. Derby would have no inclination to lead in this matter. Members observed that change might occur if a significant number of universities decided to change at the same time.

Admissions

27.Student applications for 2012/13 are improving by about 100 per month but remain low and the University will need to recruit 800 to 1,200 students in clearing. The position is also very competitive in Further Education. The University is experiencing an increased demand for its own Modular Foundation Programmes which bring in students by the non-A Level route. Central Television have enquired about coming to the University next week to report on UCAS applications.

ACTION: Council asked if the Pro Vice-Chancellor could provide an update on the progress of clearing during the process in late August/beginning of September.

Environmental responsibility

28. Council received the quarterly report on environmental responsibility including conservation of power and power generation and was delighted to note the First Class Award. Council also noted the success of the photovoltaic cells in generating energy.

Corporate Risk Register

29. Council considered the May 2012 edition of the Corporate Risk Register and felt that it was a good reflection of the situation as they understood it. They thought that some risks could now be removed: for example Derby Theatre and University of Derby Corporate.

Chairmen's reports

30. FEGC: Liz Fothergill reported that the FE Governance Committee would now be reconfigured. The Clerk was asked to write to Louise Potter and Chris Walters who would not be continuing onto the re-constituted committee to thank them for their many contributions over the years. He was also asked to write to Ken Cook to ask if he would be willing to be a member of the new Committee.

31. Audit and Risk Committee: Martin Rogers commented that Pricewaterhouse Coopers were now beginning to produce reports and the emphasis would be on value added.

32. The summary of the latest staff engagement survey, June 2012. This was welcomed and showed a positive picture. Governors were particularly pleased to see the improvement in IT Services which was clearly a reflection of the management skills of Neil Williams.

INFORMATION MATTERS: The following documents were noted

33. To receive the confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 15^th March 2012

34. To receive the confirmed minutes of the Audit and Risk Committee of 5^th March 2012

35. To receive the confirmed minutes of the Further Education and Governance Committee of 28^th February 2012.

The next meeting of the Governing Council is on Friday 26^th October 2012 at 12.30 pm at KR Derby.

Paul H Bridges

Clerk to the Governing Council

7^th July 2012

Corrected 11^th July 2012

» 23 March 2012

University of Derby

Governing Council

Minutes of the meeting held on Friday 23^rd March 2012

Membership

Mr Chris Hughes (Chairman)* P Mr Ian Gibbard Chairman FEGP P

Mr Dominic Anderson P Ms Joanne Kay P

Mrs Susan Ambler P Councillor Andrew Lewer P

Mr James Beckett P Dr Antonios Platsas P

Mr Neil Calvert A Mr Peter Richardson P

Professor John Coyne P Ms Andrea Robertson-Begg P

The Venerable Dr Christopher Cunliffe P Mr Martin Rogers Chairman Audit & Risk A

Mrs Olivia Dean P Councillor Evonne Williams A

Mrs Elizabeth Fothergill Vice-Chairman A

(*Also Chairman of the Nominations and Remuneration Committee)

In attendance of the seminar and the main meeting:

Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P

Professor Elizabeth Barnes, Pro Vice-Chancellor P

Professor Philip Plowden, Pro Vice-Chancellor P

Professor Paul Bridges, Clerk to the Governing Council P

Governors' Visit: Britannia Mill

Mr Ian Willgoose, Director of Estates and Professor Guy Daly, Dean of Faculty: Education. Health and Sciences led a tour of the newly developments at Britannia Mill.

Minutes of the meeting held at Britannia Mill, Room BM 318

1. The Chairman welcomed members and thanked Ian Willgoose and Guy Daly for the tour.

2. Apologies for absence were received from Liz Fothergill, Martin Rogers, Neil Calvert and Cllr Evonne Williams. Apologies for early departure were received from Olivia Dean.

3. There were no declarations of interest by the members of the Governing Council.

4 The minutes of the meeting of the Governing Council held on 9^th December 2012 were approved subject to the removal of a duplicated paragraph and the correction of the declaration of interest given by Cllr Andrew Lewer. The minute inadvertently implied undue assistance had been given to a family relative for a course. The wording would be amended.

5. Matters arising: none

6. There were no outstanding actions from the previous meetings of the Governing Council.

7. Chairman's report

The Chairman updated Council on his Council-related activities. The Chairman had met with the Vice-Chancellor at fortnightly intervals and an excellent working relationship had been established. He had met with the Chair of the Governing Body at Leek College and the Principal and looked forward to the merger following consultation. The Chairman, Liz Fothergill and Olivia Dean will be meeting with Tina Heathcote the chair of Leek College and her deputy in April to discuss the revised structure of the FE Governance Committee. He has also invited Tina Heathcote to the next meeting of Council at Buxton on 6^th July. The Chairman has also met with the Chair of Derby College to explore opportunities for partnership.

The Chairman hoped that Council would be able to take the revised Constitution forward a further step today. He thanked the members of the Committee and Ven. Dr Christopher Cunliffe for their valuable council. He reported that he had attended the graduation ceremony in Switzerland. This had given him a new perspective on international markets. The key for the University is maintaining business sustainability. The meeting of University Court on Derby Theatre had been successful with excellent presentations well attended by City and County people. The Chairman has asked the Vice Chancellor to commission an independent report on the contribution which the University makes to the local economy. He wanted to debunk the myth that Rolls Royce does not recruit Derby graduates. Over five years Rolls Royce has sponsored 684 students and last year Rolls Royce employed 39 of our graduates of whom 75% are in engineering disciplines. We believe for example there to be more Derby graduates at Rolls Royce than from any other University. The University will produce a reliable guide with unimpeachable data for you.

8. Vice-Chancellor's report

The Vice-Chancellor presented his written report. He concurred with the Chairman regarding the value of an economic report. The last one had been produced in 2007. The University is the forth largest employer in the City. The Vice-Chancellor reported that he had received the HEFCE grant letter which indicated a grant about £500 k better than expected. The grant excluded employer co-funding but there was some better news. Although HEFCE had rejected the University's appeal regarding the sudden cessation of funding support for the University of Derby Corporate, HEFCE had now signalled that an internal procedure had been regarded as invalid and so there may now be funding for 2011/12 after all and some transitional funding for 2012/13.

Peter Richardson who chairs the Derby City Renaissance Board was interested in the University's plans regarding the proposed University Technical College in Derby. The Vice-Chancellor reported that he had been contacted by Lord Baker who was keen to see a UTC established in Derby and wished to persuade the University to take the lead role. It was noted about £8m might be made available for the build of the school but there was no business plan and Derby College had withdrawn its formal support in the form of a building although it remained interested. The Chairman commented that the University could not afford to allow another University to gain a foothold in the City. The University would only get one place on the Governing Body of the UTC; it would not control the UTC. In discussion it was agreed that one could probably build a school for £8m but this was a limited sum.

ACTION: Governing Council supported the Vice Chancellor in moving the proposal forward but requested a report on the business and reputational case for allowing the proposed University Technical College in Derby to be associated with the University. The Council would wish to see a full risk assessment of the project and in particular wanted to be assured that it would not have an impact on our already positive relationships with other local schools and colleges

9. The University of Derby Students' Union

The Chairman congratulated both Mr James Beckett and Mr Dom Anderson who had been re-elected President and Vice President respectively in the recent elections. Dom Anderson had been unopposed but there had been vigorous contests for all the other positions. Four thousand votes had been cast which was pleasing. They were pleased to confirm that, following a deficit in 2010-11 the UDSU will record a surplus in 2011/12. James Beckett reported that the UD Students Union had advertised for the vacant position of Chief Executive of the Students' Union and there had been 31 applications. The short listing process was in progress and an outcome was expected in April, he thanked Pro Vice Chancellor Liz Barnes for her help in the process

THE UNIVERSITY CONSTITUTION: The Articles of Association

10. The Articles of Association

The Chairman explained that he had consulted the Church through the auspices of Ven Dr Christopher Cunliffe and both parties had been fully satisfied with the outcome. The Church will recommend one member of Council and the Ordinances will also indicate that the Church may recommend more members of Council. The Chairman thanked the Ven. Dr Christopher Cunliffe, Archdeacon of Derby and Rt Revd Dr Alastair Redfern, Lord Bishop of Derby for the help that they had given in this matter. Martin Rogers had e-mailed some questions regarding the clauses on benefits. The Eversheds lawyer had explained that the clauses formed part of a model set of Articles which had proven acceptable to the Privy Council and for this reason it was unwise to vary from the wording of the clauses. Cllr Andrew Lewer noted the proposed change to the composition which discontinued the nomination of county councillors to the Council but permitted the appointment of county councillors as independent governors in their own right. He indicated that he would not oppose this change. The Chairman drew attention to the existing right of staff to appeal to Council in the event of a grievance which is found against them. This could raise significant difficulties including a risk of judicial review if any of the issues had been discussed at Governing Council or its committees and independent members were subsequently on Appeals Panels. We have consulted with specialist legal advice to frame new staff appeals procedures.

Council noted that the new Articles do not permit an independent governor to also be a student of the University. If an independent member becomes a student that governor cannot continue as an independent governor. Several members were uncomfortable about this, particularly if the governor just enrolled for a short programme.

ACTION: The Clerk was asked to develop a practicable definition of student for the Articles which would enable the Council to identify a satisfactory way forward.

Ian Gibbard wondered whether the status of the University as Exempt Charity was placing constraints on the Articles of Association. Is the University being forced to trade off advances that it would like to introduce in the Articles because it has charity status? The Chairman responded that it had not lost any changes that Council had wanted. It was further noted that there were significant financial advantages in keeping the charity status, for example business rate relief which is worth around £3m each year to the institution.

The Chairman reported a proposed change which would be contained in the Ordinances which set out the composition of the Committees of Council. The Chairman wished to discontinue the current stricture which prevents non-independent governors being members of the committees of Council. He felt that the exclusion of staff and student governors from the committees diminished the value of staff and student governors. While the membership of Audit and Risk Committee needed to be composed of independent governors, this was not the case for the other committees.

DECISION: Council agreed the proposed Articles of Association and noted that they would now go to consultation with the University's stakeholders. The Articles of Association would then go to Privy Council for approval.

NOTE: The chairman indicated that if it became necessary to consider any changes of significance, either arising from the consultation process or from the Privy Council, he would consult the Council.

MEMBERSHIP OF COUNCIL

11. Reappointment of members of Council

DECISION: Council approved the re-appointment of the following members.

(i) The Venerable Dr Christopher Cunliffe: second term ending 31^st July 2015.

(ii) Mrs Joanne Kay: third term ending 31^st July 2015

(iii) Councillor Andrew Lewer: second term ending 31^st July 2015.

Council noted that two staff governors - Andrea Robertson Begg (Academic Board nomination) and Dr Antonios Platsas (appointed staff governor) also complete their current terms of office on 31^st July. Clause 12 in the new Articles (Clause 12) indicates that Council may invite staff governors to serve for a second term with a maximum total period of office of six years. Nominations and Remuneration Committee has recommended that Council invites Andrea Robertson Begg and Dr Antonios Platsas to serve a second term of three years. Academic Board supports the generic proposal in principle but wishes to make a specific recommendation with regard to the nomination on each occasion of appointment or re-appointment.

So the re-appointment of Andrea Robertson Begg is subject to the recommendation of Academic Board which is due to meet in May. The Council will then make the next appointment in July. The re-appointment of Dr Platsas can be agreed immediately. The Chairman has also invited Academic Board to recommend a member of academic staff for appointment as a staff governor to replace Dr Christine Jones who retired from Council on 31^st July 2011.

DECISION:

(iv) Council re-appointed Dr Antonios Platsas for second term of up to three years.

PERFORMANCE REPORTS

Academic developments

12. Academic developments at the University in 2011/12

Professors Liz Barnes and Philip Plowden presented their joint academic development report. Professor Barnes commented that the e-submission was going very well with only a small minority of staff requesting printed copies of the submitted works. Professor Plowden reported that students had responded well to the invitation to give feedback on their programmes for the National Student Survey. However the University would not know what the feed back is until the late summer. Council also noted that the process of gathering comments from external examiners had improved and focused on academic matters of substance. It was also noted that the conversion of the curriculum to 20-credit modules was progressing well and the process is rigorous.

Cllr Andrew Lewer reported that the development of the Crescent Hotel as a training hotel is progressing well. Olivia Dean was pleased to note that many programmes are now being recognised by professional bodies and that employability is a more explicit aim of programmes. Council discussed the National Student Survey which is under way. Dominic Anderson commented that it is not the questionnaires but the actions which the University actually takes which matter. Professor Plowden complimented the work of Susan Wigley and the Student Experience team.

The Chairman thanked Professors Barnes and Plowden for their reports.

Human resources

13. The Human Resource report

The Vice-Chancellor reported that the negotiations with the branch of the University and Colleges Union regarding the contracts for the on-line staff had proved quite protracted - rather more so than he felt was necessary. The UCU planned day of action will proceed but only in London. He reported that the HM government was imposing a restriction of 1% on all pay in the public sector and that even though Universities were independent bodies they were expected to follow suit. The Vice Chancellor's current understanding was that this meant that our total salary expenditure would only be allowed to rise by 1% in the next financial year. This represented a very serious restriction on the capacity of the University to reward its best staff through the normal performance review. The mechanism of control could be a reduction in grant if these parameters were not met, the Vice Chancellor was consulting colleagues, UUK and HEFCE to get a clearer picture of the leeway open to the University.

Cllr Andrew Lewer asked what proportion of staff are rewarded with payments denoting that they have exceeded expectations? The Vice-Chancellor said that around 10% of the 173 staff on performance related pay benefit from reward payments. In addition about 10% of rank and file staff come into the exceptional category of performance.

ACTION: The Chairman requested a report on the implications of the government imposed restriction on staff remuneration in 2012/13 for the consideration of the Finance, Employment and General Purposes Committee meeting on Monday 11^th June 2012 and the subsequent Council meeting

.Financial matters

14. The Deputy Chief Executive and Finance Director presented:

(i) The General Update

(ii) The year to date financial performance - University of Derby Group, January 2012.

(iii) The year to date financial performance - University, January 2012

(iv) The year to date financial performance - DSRL

(v) The Financial Forecast 2 University of Derby Group

(vi) The Financial Forecast - University

(vii) The Estates Project update

The Deputy Chief Executive and Finance Director reported that as indicated in Forecast 2, there will be an income shortfall compared to budget this year. It is anticipated that the recruitment of international students will improve in the future following the developments put into place by Nick Slade the new international director. If overall recruitment continues to be lower than expected the University may wish to consider planning to be a little smaller than it has been in the last few years. However, the current aim is to maintain the current size. Council also noted that the University will experience a pressure point on cash flow in Spring 2014. This will be because the income from the Student Loan Company will be in phases. The SLC will pay 25% in October, 25% in January and 50% in May. This shift towards end-loading will have an adverse effect on cash-flow. This pressure could be off-set if the University finds a buyer for the Harpur Hill Site at an acceptable price. Peter Richardson urged the Finance Director to take the necessary steps to avoid the University going into to negative cash flow at any time because this would lead to reputational damage.

The Deputy Chief Executive reported that the University has now completed the purchase of Oaklands Manor Outdoor Centre which includes 58 acres of moorland and facilities. The University has also completed the purchase of Lonsdale House (1,215 m²) and some incubation units in Network House will move into a small self-contained part of the property shortly. Some staff from the Enterprise Centre will be located to Network House to create more rentable space there. Lonsdale house has good configuration as flexible academic rooms and offices. It could also serve as a base for the Institute of Engineering. These matters are still being explored. It is no longer necessary to invest in restructuring Northgate House in Buxton but the property will be retained

The Chairman thanked the Deputy Chief Executive and Finance Director for his report.

Strategic developments

15. The University of Derby Corporate, Derby Theatre and University of Derby On-line

The Deputy Chief Executive and Finance Director presented the written reports. Council noted that UDC is moving to the full cost model just as the economy is being to lift and return to normal. Peter Richardson remarked that he felt that there are some grounds for optimism but it was critically important to ensure that the University has the right people in the right place. The Vice-Chancellor responded that Andrew Hartley has been appointed managing director of University of Derby Corporate and he would provide the vision and the drive necessary.

Derby Theatre had been the subject of a meeting of University Court earlier in the week

16. Leek College of Further Education

Professor Liz Barnes reported that staff meetings had been held at Leek and Buxton. These has revealed a little anxiety at Buxton. The Executive has now identified a senior management structure. This separates further and higher education. A Principal will have oversight of Further Education and report directly to the Pro Vice-Chancellor. This separation of FE and HE is likely to be welcomed by FE related bodies. The consultation phase finishes on 13^th April. The Skills Funding Agency will evaluate the report and make a recommendation to the Minister for sign-off. Cllr Andrew Lewer noted that consultation is not a referendum. It is simply an opportunity to comment. The Vice-Chancellor said that there will be new opportunities for staff. Some may need to consider new roles.

Admissions and recruitment

17. Student recruitment in 2011/12; the HEFCE bid and applications for 2012/13

Professor Liz Barnes provided written papers. She reported that the number of applications remains down compared to 2011/12 and it was evident that recruitment for 2012/13 is not going to be easy. It is essential to reach the targets. The number of applications for part time and on-line is up and international recruitment has been reviewed and is under new management. The Vice-Chancellor drew attention to the pattern of applications which is quite different from last year. The market is highly competitive and very different from just one year ago. The Vice-Chancellor commented that this was not a market for a single simple message - this was the time to recognise different markets and the necessity to appeal to each.

National Performance Indicators

18. The HESA national performance indicators

Professor Liz Barnes presented the preliminary information which would be used for the next iteration of national league tables in 2012. She commented that several measures were likely to improve but that the proportion of good honours degree results was likely to remain at the lower end of the national spectrum. The figure remains at about 46% (or 50% if one disregards graduates who have completed in the current year following referrals). The Vice-Chancellor reminded the Council that the distribution curve is very flat with relatively few points separating the universities at 60^th and 110^th. A slight increase in the number of points; or fall in number of points would make a big difference in the position in the league table.

Environmental responsibility and Equality & Diversity

19. The quarterly report on environmental responsibility

Professor Plowden presented his written report on environmental responsibility which set out the power generated and the waste saved in recent months. The solar panels had continued to perform well. The addition of new properties to the University estate was a negative factor. Another factor being considered by bureaucrats is the mileage of students in reaching the University thereby giving a paradoxical disincentive from taking international students. He reported that the University was about to replace the traditional lights system with LED lights which would bring about a very large saving in running costs. The University will receive £1m towards the project costs from HEFCE as an interest free loan and the overall payback period is estimated as 7 years.

Council thanked Professor Plowden for his report.

Corporate Risk Register

20.The February 2012 edition of the Corporate Risk Register

Council received the Corporate Risk Register noting that this had already been considered by Audit and Risk Committee and FEGP. There is now improved prospect of gaining some Arts Council England Funding for Derby Theatre and some HEFCE funding for UDC after all. This would result in balanced budgets in both cases.

Chairmen's reports

21. The verbal reports from each of the chairmen of the Council committees

Ian Gibbard identified the key points for each of the Committees. It was noted that Chris Hughes, Liz Fothergill and Olivia Dean will be meeting with the Chair of Leek College governing body and her deputy in April to discuss the new FE Governance Committee structure.

22. The schedule of meetings for the period until December 2013 was approved.

INFORMATION MATTERS: The following documents are located on the Governing Council website

23. The confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 1^st December 2011

24. The confirmed minutes of the Audit and Risk Committee of 21^st November 2011

25. The confirmed minutes of the Further Education and Governance Committee of 6^th December 2011 and 12^th January 2012

• The October edition of the biographical summaries

• To glossary of abbreviations: October 2011, edition.

• The list of members of Governing Council and the periods of appointment.

• The list of Governing Council members and their contact details.

• The list of the current Committee memberships.

• The current Governing Council skills matrix.

The following meeting of the Governing Council will be held on Friday 6^th July 2012 at 12.30 pm. Council requested that the meeting should be held at the Oaklands Manor Outdoor Centre in Buxton if possible.

Paul H Bridges

Clerk to the Governing Council

26^th March 2012

Corrected by CH 2^nd April 2012

Approved 6^th July 2012

» 18 March 2011

Membership (currently 21 members)

• Mrs Dianne Jeffrey (Chairman) A
• Mr Chris Hughes, Vice-Chairman P
• Mr Peter Allwood P
• Mr Caleb Jackson P
• Mrs Susan Ambler P
• Dr Christine Jones P
• Mr Neil Calvert P
• Ms Joanne Kay A
• Mr Jack Clemson P
• Cllr Andrew Lewer P
• Professor John Coyne P
• Dr Antonios Platsas P
• The Venerable Dr Christopher Cunliffe P
• Mr Peter Richardson P
• Mrs Olivia Dean P
• Ms Andrea Robertson-Begg P
• Mrs Elizabeth Fothergill, Vice-Chairman P
• Mr Martin Rogers P
• The Venerable David Garnett A
• Cllr Evonne Williams A
• Mr Ian Gibbard P

In attendance at the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Andrew Hartley, Acting Pro Vice-Chancellor P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

WITH REGARD TO THE SECTIONS BELOW MARKED STRICTLY CONFIDENTIAL - THIS CONFIDENTIALITY WAS LIFTED ON 5 APRIL 2011

Mr Chris Hughes (Vice-Chairman and Chairman Designate) chaired the meeting

The setting of the full time undergraduate fees to come into effect in September 2012

Professor John Coyne (Vice-Chancellor) introduced the seminar and briefly explained the circumstances in which the team had made its evaluation of the recruitment market, the cost of provision, the OFFA requirements and the political imperatives in order to arrive at the fees position. This would need to be reported to the Office of Fair Access (OFFA) by 19 April 2011. He noted that while the government's position would not be formally known until the publication of the White Paper in mid May, the minister for universities, Mr David Willetts, had set out his views in recent speeches. A team of colleagues had engaged in developing the University's position which would now be presented by Andrew Hartley (Acting Pro Vice-Chancellor) and Peter Allen (Director of Marketing).

Andrew Hartley provided some general background information about the undergraduate student population. He pointed out that 55% of students are under 19 years of age at entry and 82% are under 24 years of age. So the University appears to have a younger student profile than hitherto. He reported that 73% of students reside in the Midlands. 73% of students enter with A level qualifications and a further 12% enter with professional qualifications. The average UCAS points score of entrants is 230 to 260 which equates to three A level passes at grade C, but there is a wide spread with 13% having the equivalent of three grade A passes but some entrants with much lower scores. 38% of students come from families of the lower Social Economic Categories which is actually a little less than the benchmark set by HEFCE. 87.6% of graduates have employment or a place on a further course within six months of graduation compared to the benchmark of 89.7%. The University had fared quite well in the National Student Survey of 2010 with some subjects performing particularly strongly. History had been exceptionally successful because the staff put the teaching commitments first, they get to know the students and they help them develop the skills which make them employable.

Peter Allen noted that the statistical information outlined in the earlier part of the talk showed that the University did not stand out with regard to any one aspect such as employability. Clearly, before setting fees it would be useful to gather the perceptions of the University and its position compared to other universities in the HE sector. In one survey of East Midlands students, observations recorded included: "Derby requires lower UCAS points so it can't be good", "the University is very caring", "the University is bigger than I thought", "the University is aiming to improve". They expected the University to set its fees somewhere in the range of £6.750 to £7,500. The team had concluded that the promotion of Derby would be based on the principle - higher education on a human scale.

Andrew Hartley then explained that the proposed fees would be differentiated into three categories to reflect three types of programme. The first is class based subjects which come into Subject Groups C and D. The second category includes the more expensive laboratory and studio based subjects including the science, technology and studio arts subjects. The third category comprises the specialist or niche subjects which can command a premium. This simple categorisation would enable the University to be flexible in the application of the rates. For each of the three categories, the team had identified a lower price, a medium price and a higher price. The medium prices represented the proposed levels of fees.

A slide setting out the proposed fees was then presented on screen for the discussion to follow.

The Vice-Chancellor added that the University was predicating the fees on the expectation that market demand would be steady. There could be some moderate increase in the number of full time undergraduates but not a large increase. The University was not planning to develop accommodation for a larger capacity. It would be focusing on quality of provision.

Several members commended the message higher education on a human scale. They were very supportive of the approach. It was noted that the University aimed to make the fees inclusive of all tuition costs such as field work, practical equipment and materials. The University wanted to avoid the situation when, on arrival, students were confronted with a range of further costs. However, books could not realistically be included.

The student governors reported that they had been consulted and that the proposed fees were what they expected and were levels that they considered 'about right'. It was important that the University should not be perceived as cheap; but neither could it substantiate a top fee rate position. They also were strongly supportive of the inclusive fee position. They encouraged the University to raise the UCAS points requirement because this would raise student perceptions of quality to match actual quality of provision.

One member advised that the University should market strongly in the Midlands because this was the heartland and no other region was likely to be exporting students to Derby in large numbers. A less than strong campaign risked the loss of students to other institutions. He also questioned whether the University should make all prices cost-inclusive. It might be worthwhile also having a set of costs with optional extras. This might appeal to some students. Another member disagreed saying that the University would be costing for costs that formed an unavoidable part of the course. Therefore these costs were not optional and it would be unhelpful to imply that there was choice as to whether the cost needed to be paid for. It would be best to keep the fees simple and inclusive.

Members generally favoured the transparent costs approach. The Vice-Chancellor felt that this could be taken further and used to market the University by inviting student enquirers to compare the University offer with others. The University intended to produce a proforma which could enable enquirers to make direct comparisons of inclusivity. The Vice-Chancellor noted that at present, the University pays about £5 M in bursaries to students but some of these payments will not be permitted in future. The University will be able to redirect some of this expenditure. The fee levels proposed have been pitched in order to ensure that the University will be able to continue to enhance the quality of provision. This would become absolutely critical.

The Vice-Chancellor thanked his team for their hard work in very time-constrained circumstances. The Acting Chairman thanked Andrew Hartley and Peter Allen for their excellent presentation.

Minutes of the third quarterly meeting of Governing Council on 18 March 2011

1. The Acting Chairman welcomed to Mr Neil Calvert, independent member of the Governing Council

2. Apologies were received from Dianne Jeffrey and David Garnett.

3. There were no declarations of interest by the members of the Governing Council.

4 The minutes of the meeting of the Governing Council held on 10 December 2010 were approved without amendment.

5. There were no matters arising other than those on the agenda.

6. There were no outstanding actions from the previous meetings of the Governing Council

7. Chairman's report

The Acting Chairman reported that item 11A had been withdrawn and would be taken in due course by Finance, Employment and General Purposes Committee. Item 17 which includes the important decision regarding the proposed fees would be brought forward to item 11.

8. Vice-Chancellor's report

The Vice-Chancellor presented his written report and was pleased to highlight the fact that the University had attracted over 20,000 applications from prospective full time students. The University would recruit as many as possible for three year programmes. The fees regime would not change for those who enrol in September 2011. Furthermore if any Foundation Degree students proceed to an honours programme in 2013/14, these students would also be able be allowed to study on the current regime, even though the honours programme is separate from the Foundation Degree.

He was also very pleased to report that following the interviews earlier in the week, the Appointing Panel had invited an outstanding candidate to accept the vacant position of Pro Vice-Chancellor. The candidate had been amongst the first in the country to be appointed a National Teaching Fellow.

9. The University of Derby Students' Union

Caleb Jackson and Jack Clemson reported on the current elections. They were pleased to report that there were 31 candidates for UDSU positions. With two days of voting to go there were indications that the target 15% engagement would be exceeded which was very pleasing. The UDSU has made an application for accreditation. 250 unions had submitted. Two had been accredited as gold status, six were silver and 70 were bronze. Derby was one of those given the accolade of bronze accreditation. In sport the men's football won their league and the women came second with a large number of points. Blends has been doing very good business. The Acting Chairman commended the UDSU on the energy of all the activities and he congratulated the UDSU on the engagement in the elections.

Decision matters

10. Membership of the Governing Council

The following members of Governing Council come to the end of their current period of service on 31 July 2011. The Council approved the recommendations from Nominations and Remuneration Committee for the following re-appointments for a further term of office.

INDEPENDENT GOVERNORS

(i) Mrs Elizabeth Fothergill joined the Council in 1999. She was appointed Chairman of the Further Education Governance Committee (and Vice-Chairman of Council) in July 2004. The ordinances of the Governing Council state that the clock measuring the period of time served is reset when a governor is appointed Chairman or Vice-Chairman of Council or Chairman of FE Governance Committee. The continuing role as chairman remains subject to the re-appointment of the holder to the Council every three years with a maximum period of service of nine years in the role as chairman and an overall maximum period of 15 years, as agreed by Council in March 2010. Mrs Fothergill therefore remains eligible to serve on the Council as Chairman of FE Governance Committee until 31 July 2013.

DECISION: The Council approved the re-appointment of Mrs Fothergill to Council for a further period of two years until 31 July 2013. This will make the total period of service 14 years.

(ii) Mr Ian Gibbard joined the Council in 2005. He will complete his second period of tenure on 31 July 2011 and is eligible for re-appointment for a third period of three-years. He is currently serving as Chairman of the Finance, Employment and General Purposes Committee.

DECISION: The Council approved the re-appointment of Mr Gibbard to Council for a further period of three years until 31 July 2014.

(iii) Mr Martin Rogers will complete his second period of tenure on 31 July 2011 and is eligible for re-appointment for a third period of three-years. He is currently serving as Chairman of the Audit and Risk Committee.

DECISION: The Council approvedthe re-appointment of Mr Rogers to Council for a further period of three years until 31 July 2014.

Retirements: Governing Council noted the following:

(vi) Mrs Dianne Jeffrey was first appointed to the Council in 1999. She served three years as a governor before she was appointed to the position of Pro Chancellor and Chairman of the Governing Council in 2002. She completes her third term as Chairman of Council on 31 July 2011 and will retire from the Council on that date after 12 years of service. Mr Chris Hughes, Chairman Designate will take over the role as Pro Chancellor and Chairman of Governing Council on 1 August 2011.

STUDENT GOVERNORS

(v) Mr Caleb Jackson and Mr Jack Clemson will retire from Council on 31 July 2011. The UDSU will nominate the new officers in spring 2011.

STAFF GOVERNOR

(vi) Dr Christine Jones is due to retire from Council on 31 July 2011. She is an Academic Board nominee.

DECISION: The Council agreed that the appointment of a replacement staff governor, put forward by Academic Board, should be deferred until the Governing Council has undertaken a review of the composition of the Council. This review would take place over the summer and autumn.

(vii) Council noted that Mr Peter Allwood has signalled his intention to resign form the Council with effect from 31 July 2011, when he retires from his position as Headmaster of Lichfield Cathedral School.

The composition and size of the Governing Council.

The Acting Chairman stated that it was important that the Governing Council reflects on the shape, nature and structures employed to face the new funding arrangement. His intention is to meet with each member in May and June to confirm the commitment to the work of the Council and ensure if possible that personal aspirations are fulfilled. He felt that at present the Council is too large to have the level of debate required and to be really effective; there isn't time to hear everyone's views. He indicated that he would be open to ideas that enable the Council to be more effective. He drew attention to the increasing importance of observing absolute confidentiality of information and discussions, as is normal in the commercial world with which he is familiar. In the commercial competitive world of higher education confidentiality will be essential. He asked the Clerk to proceed to arrange the meetings and he looked forward to meeting every governor.

11A. The Deputy Chief Executive & Finance Director's Report

(i) The monthly management accounts for 31 January 2011

The Deputy Chief Executive and Finance Director reported that the University is on track to achieve or exceed the budgeted surplus for 2011/12. The University had allowed for a slightly higher pay rise for academic staff than was proposed nationally but it was less than what was allocated in the budget realising an annual saving of £600 k.

Council received the interim management accounts

(ii) The Financial Projections

There are two years before the new fees regime comes in and it is important to lift the reserves as high as possible during that time. The University has just received the HEFCE letter for 2011/12 and this indicates that the University assumptions were very close indeed to the actual position (budget reduced by 4.1%). Council noted that Russell Group universities had generally done well in proportional terms because research has been protected whereas teaching has not. The University needs to be within the plus/minus 5% tolerance envelope in order to avoid claw-back of grant. In the current year, the University is positioned at +3.4%. In the grant letter (March 2011) HEFCE predicts that if the University recruits to target it will stand at +0.6% in 2011/12. This is central within the tolerance band therefore reduces the risk of claw-back. Capital grants have been heavily reduced and so the University will have to find the money needed from revenue.

One member noted that the income generation figures were negative and asked for information on strategy. The Deputy Chief Executive and Finance Director responded that these areas of activity were still building and had not yet reached the fruitful stage.

In response to a question from the Chairman, the Deputy Chief Executive and Finance Director acknowledged that in setting the budgets for 2011-12, there was some work still to do to ensure that the proposed budget fulfils agreed parameters, in particular the need for a minimum of 5% surplus on external income. The Finance Director fully anticipated that in the 2011-12 budget presentation to Council he would fulfil that expectation.

Council received the financial projection.

STRICTLY CONFIDENTIAL

(ii) The Financial Forecast

The Deputy Chief Executive and Finance Director explained that the financial forecast papers had been predicated upon the setting of fees at £6,000 and so any decision to set the fees at the higher rates proposed in the seminar, would result in increased income providing the student recruitment was at the planned levels. The modelling had made conservative assumptions following the changes anticipated from HEFCE. The base line modelling (completed before the detailed grant announcement) made the following assumptions: the teaching grant will reduce by 93% by 2015/16, widening participation will reduce by 25% by 2014/15 and the Higher Education Innovation Fund will reduce by 95% by 2012/13. So the total reduction in HEFCE funding will be 81% by 2014/15. (Note: the actual grant letter on first inspection is better than assumed)

Modelling had been undertaken on a conservative basis. It was still unclear what mechanism would be used to control student numbers. The executive had made a judgement based on best information in order to set fees at a level that would administratively and in market attractiveness maintain student volume.

The proposed structure for FT undergraduate fees for September 2012 are proposed for discussion as follows.

The Deputy Chief Executive circulated a sheet which set out the impact of the nine fee bands in terms of income and cost. If the low price fee bands were adopted, this would yield an additional £1.2 M in 2012/13, £2.3 M in 2013/14, £3.4 M in 2014/15 and £3.5 M in 2015/16. But if the medium price fees were adopted these figures would rise to £4.4 M, £8.1 M, £11.9 M and £12.3 M respectively. These would improve the operating surpluses which on the base case [£6,000] dip to £2.5 M in 2013/14. If the medium price bands are adopted, the lowest operating surplus is £8.0 M in 2012/13 rising to £18.5 M in 2015/16. So the medium-priced bands give a very substantial improvement. Even if the change to the medium price band results in a loss of students through lower recruitment, there is still an improvement in income (up to an approximately 15% reduction). The scenarios show a slight deterioration in the student/staff ratio from 26.5: 1 to 28.0: 1. The Acting Chairman asked the Pro Vice-Chancellor if the change in the ratio was manageable, and Professor Barnes replied that a slight change was manageable. The Vice-Chancellor added that he would prefer the ratio to fall than rise, but each percentage point reduction costs about £1 M and there were other ways in which the learning experience could improve. The Chairman asked if the student contact hours would need to be presented in detailed form and the Executive members indicated that it did. The Vice-Chancellor added that students valued one-to-one contact with staff and so it was now a requirement that academic staff publicise a number of hours each week when they are available for student appointments.

The Chairman indicated that the Council needed to make a decision at this meeting. He invited every member of Council to comment.

Councillor Andrew Lewer advised adoption of the medium band because there are always some additional costs to meet. He appreciated the importance in national terms of ensuring that the University recruits from the harder-to-reach lower socio-economic groups but he advised against giving this too much emphasis in publicity because this could act as a disincentive to other socio-economic groups. He also urged that the University acts robustly with any departments that do not give good service to students.

Martin Rogers commented that it was quite important to have some sense of what other similar institutions would do. It was noted that some were probably heading for quite high above the government median of £7,500. Mr Rogers recommended the medium price band.

Andrea Robertson-Begg wanted to know if the University had researched the actual costs in arriving at the proposed fees. She also wanted to know if the specific extras had been included for the resource intensive programmes. To what extent could some expenses be optional? The Vice-Chancellor responded that field trips needed to be for all students on a particular programme and not optional. An optional element risked dividing a class on socio-economic lines.

Peter Allwood welcomed the simple differentiated fee. It was so important to have some differentiation but not with any complications. He did not recommend entertaining the low band. The medium to high band is where the University should be so that it can continue to invest.

Caleb Jackson and Jack Clemson said that the important thing for students was to know exactly what they are going to get for the price. They recommended the medium price. The adoption of the low price would signal an intention to keep things as they are and risked lowering quality. They were quite clear that the student body would be focused upon ensuring the quality of the student experience.

The Venerable Dr Christopher Cunliffe advised the University to go for the medium price.

Neil Calvert was not too concerned by the probable drift in the staff to student ratio providing there was a commitment to quality of provision. He thought that in publicity terms it would reflect badly on the University if it decided on a high fee levels. He recommended the medium fee band.

Dr Antonios Platsas commented that it was important to consider not just simple economics but also student psychology who would gain unfavourable perceptions from low fee levels. He recommended adoption of the medium fee band.

Dr Christine Jones envisaged a risk of harm to the University if the fee increase was deemed excessive with adoption of the high fee band. Conversely, the adoption of the low fee band would make it difficult to raise subsequently. She therefore advocated the medium fee band.

Susan Ambler recommended the medium band because this gave the University room to manoeuvre. It was important to include investment in the plans. How can the University maintain reasonable flexibility? She thought it likely that the University would learn more about the actual costs of programmes and would need to be prepared to respond and revise accordingly.

Peter Richardson noted that the financial objective is to have a financial surplus of 5% of turnover and that the base case predicated on fee of £6,000 does not deliver this. So adoption of the low fee band would be a high risk strategy. He emphasised that the University is a business for higher education learning and he was confident in its future. He recommended the medium fee band.

Olivia Dean recommended going for class based fees just below £7,000. She thought that there is scope for re-visiting the resource intensive fees and lifting them slightly but keeping the average below the £7,500 mark. She emphasised the importance of the University staff understanding the agreed position on fees and speaking about the fees in a positive manner.

Ian Gibbard believed that the major strength of the University was its capacity to deliver. He found the presentation very compelling and he was supportive.

Liz Fothergill really liked the proposed strap-line and felt that the medium fee band was about right.

It was noted that the fees price would not include text books but might include a Kindle or other electronic device with loaded courseware. Andrew Hartley reported that the Corporate Management Team had come to a similar view. Professor Barnes felt that in the light of the Councils discussions it may be advisable to lift the resource intensive programme fees slightly to more fully reflect the additional costs in those areas.

The Acting Chairman reported that he too was in favour of the medium price band as was Council Chair Dianne Jeffrey who had communicated her views although unable to be present at the meeting. The thorough process of analysis, consumer research and wide consultation before a mature and informed debate to arrive at the decision was what one should expect of a Higher Education Institution. In summary, the Council fully and unanimously endorsed the principle of the medium fee band and that the University should keep the average fee below the government stated median of £7,500. The Council needed to note that the submission to the Office of Fair Access (OFFA) in April would not represent that final word; fee setting was likely to be an on-going iterative process until a final decision from OFFA in July. The Acting Chairman asked, and the Vice Chancellor agreed, to keep members fully involved and briefed on the ongoing process.

DECISION: The Governing Council gave its unanimous approval for adoption of the medium fee bands. At the same time the Council expressed its recommendation that the University should not be tied to the precise figures presented at the meeting as there may be some scope to stretch the fees a little higher for the resource intensive programmes but no figure should rise to above £8,000 and the average must be below £7,500.

The Vice-Chancellor responded that the debate had been both extremely positive and supportive and had given him and his colleagues some further ideas and points for further consideration and clarification. He looked forward to completing that review with some alacrity.

ACTION: The Vice-Chancellor was asked and agreed to circulate the amended final proposal to the Council in about one week. He would be presenting the agreed position to staff on 4 April and he would communicate the outcome to the Derby Evening Telegraph.

The Acting Chairman and Vice-Chancellor warmly commended that hard work of Hari Punchihewa, Andrew Hartley, Robert Lloyd, Peter Allen and their teams.

Council noted that the current financial forecast will be submitted to HEFCE in April as required but it was unlikely that they would be of great value to HEFCE given the changes now in prospect.

11B. The revised UD Students' Union Constitution

The Governing Council received the revised University of Derby Students' union constitution. The Chairman invited comments. The Deputy Chief Executive and Finance Director recommended the inclusion of a reference to the requirement for a financial memorandum between the UDSU and the University to set down the understandings and obligations of both parties with regard to the annual grant made by the University. He also recommended reference to the space leased by the UDSU for nil rent. A member of Council recommended re-wording of a section relating to the dismissal of trustees. This might be misunderstood and would appear to need clarification.

DECISION: Governing Council approved the Constitution subject to the above amendments.

Performance Reports

Human Resources

12. The annual Human Resources report for 2010

Council received the annual HR report.

13. The Human Resources Challenges and Workforce Development

Council received the HR workforce development report.

14. The Human Resources report

The Vice-Chancellor introduced the report and emphasised the importance given to staff pay. The University had one of a few that had been prepared to pay more to its staff in the last settlement. The University and College Union is currently concerned about job security, pensions and salaries. It has recently held two votes on industrial action. In a low turnout vote there was a small majority in favour of strike action and a larger number in favour of action short of a strike.

The Vice-Chancellor reported to Council that he had written to staff to say that he fully respected their right to take industrial action but he had a responsibility to protect students against the harm resulting from strikes. He had therefore advised staff that strike action or any action resulting in anything short of normal duties, would result in non-payment of salary at the rate of 1:260 of annual salary for each day not worked normally. The UCU was planning to take action on 24 March 2011 but it was not yet known what that would mean locally.

The Key Performance Measures and Sustainability

15. The February 2011 edition of the Key Performance Indicators

The Governing Council received the report. The Chairman noted that there were still a number of unfilled boxes but the position appeared healthy.

16. The February edition of the Corporate Risk Register

Andrew Hartley (University Risk Manager) presented the risk register and reported that the next iteration would include reference to the impact of industrial action and the recent visit by OFSTED to see the progress in the FE provision. He also noted that the University would know the outcome of the application to the Arts Council at the end of March.

Council received the corporate risk register and requested that in future it should be placed at the end of the agenda so that it can be considered in the light of all the preceding business.

17 The latest UD Students Union performance indicators

Council received the A3 chart. Jack Clemson systematically outlined the background behind each of the elements which had been shown in red. He noted that Criminal Record Bureau (CRB) checks were still needed for some staff in the halls; the shops had lost income in the severe weather in December; there have been savings in salary because the commercial manager has left.

Derby Theatre and University of Derby Corporate

18. (i) An update report on Derby Theatre including financial scenarios

The Deputy Chief Executive and Finance Director explained that the Arts Council has been conducting a national review of the Arts and making a re-assessment of the grants that it gives to theatres. Each theatre has been invited to make an application for a grant against the background of reduction in the overall sum available. The University had made an application and had been supported in this application by the City Council. The outcome of the application would be known on 29 March 2011.

The Vice-Chancellor reported that the University is fully supportive of the efforts which the Arts Council is making to come to a strategic basis for the support it provides for theatres in each region. The Council would have to be selective and they did have some very difficult decisions to make. If it turned out that the University's application for programme funding from the Arts Council was unsuccessful, he would pursue any other opportunities which arise to work with the Arts Council. He was confident in Derby Theatre is a going concern and he was also confident that the Arts Council would be positive in establishing a good relationship with Derby Theatre. In the mean time it is business as usual. He was very grateful to Gary Johnson, the Theatre Manager for his hard work and he had full confidence in him. The quality of productions was high although audiences were sometimes disappointingly light.

Council received the report.

(ii) A report on the registration of Trademarks

Council received the report and noted the considerable importance of the matter.

(iii) An update report on University of Derby Corporate

Andrew Hartley, Acting Pro Vice-Chancellor, reported good progress in the forging relationships with local business. Some substantial companies now had contracts for professional courses provided by the University through the University of Derby Corporate (UDC) and this was very encouraging. However, there is a major risk forthcoming because HEFCE has now indicated that the funding support will cease altogether in 2012/13 rather than taper off as originally planned. This will give a sharp short-fall in funding (£1.7 M) and it will be asking a lot to accelerate the gearing up of business a year ahead of the original schedule.

Members of the Council asked if the UDC could realistically succeed in this task. Andrew Hartley replied that it would be a very tough challenge indeed. The Vice-Chancellor felt that it was probably too much to expect. He proposed to give the commercial manager space to try to fill the gap with further contracts.

Members asked about the extent to which the University worked with Libya. The Vice-Chancellor replied that in the past the government had encouraged universities to get involved in projects and so the University had responded positively. The University always takes advice on areas in which it may work. None of our engagement was directly with the Libyan government nor has the university ever received any gifts or donations. Work explored was in support of activities in which UK companies had had a legitimate interest.

Admissions, recruitment and the Derby Graduate

19. The update report on the undergraduate non-completion position

The Council received the non-completion report which had been considered by the Audit and Risk Committee. This will be on the agenda again in July.

20. (i)The position regarding student recruitment in 2010/11

The Council received the report and noted that it had been discussed in Finance, Employment and General Purposes Committee.

(ii) The position regarding student applications for2011/12

Professor Barnes reported that applications were strong. They are up by 21% this year and have broken the 20,000 mark for the first time. The national average increase is 6%. The Acting Chairman asked about the impact of the visa issue. The Vice-Chancellor replied to say that the impact was slight at the moment. The University requires students to achieve at least 6.5 in the International English Language Tests before they can take a place at the University on an undergraduate programme. The Parliamentary Select Committee has been unusually critical of government plans for restrictions in entry because the business has a value of about £50 billion in terms of total benefits for the economy. The market is quite sensitive to adverse change.

The Council noted that the first opportunity to assess the impact of the new fees regime on student recruitment would come in January 2012 when the University can compare the number of applications with previous years and assess any change in market share.

21. The Derby Graduate and our Commitment

Members commended the paper and asked how the proposed elements would be implemented. They suggested that the contents would help with progression. They also wondered where the fun is in learning. This was not evident in the paper. Staff members asked if it was intended to identify student responsibilities. Professor Barnes confirmed that there student responsibilities would also be set out and we would include reference to the expectation for students to have fun during their time with the University. Students are expected to contribute as well as benefit.

Verbal reports from the Committees of Council

The chairman of each Committee is invited to report briefly on any matters which they feel should be brought to the attention of the full Governing Council and are not already on the Council agenda.

22. Audit and Risk Committee - Mr Martin Rogers drew attention to the consideration given to the non-completion report.

23. Finance and General Purposes Committee - Mr Ian Gibbard, Chairman drew attention to the progress on the focus projects which had been reported to FEGP. The Vice-Chancellor commented that he could not recall a period with some much external change and at the same time there are opportunities than ever. He drew attention to some of the developments now in prospect at Buxton, for example a contract to provide training programmes for the national company Compass. It was also noted that this is the right time to explore strengthening the provision in engineering. Programmes would be in demand at all levels.

24Further Education Governance Committee - Mrs Liz Fothergill, Chairman reported that the outcome of the recent OFSTED visit is that Buxton College of Further Education (the FE School) is making reasonably good progress. In fact the outcome felt more positive than this. Mrs Fothergill commented that the College now accepted the comments of OFSTED inspectors and concentrated on making improvements rather than taking issue with their reports as it had tended to do previously.

UNIVERSITY NEWS AND OTHER COUNCIL MATTERS

25. The summary of recent news from the faculties and departments

The Chairman was extremely pleased with this report which was packed with interesting and engaging information. It was a tour de force. He asked the Clerk to thank Mrs Helen Lingwood for her work in drawing the report together.

26. (i) The revised edition of the Governing Council schedule of business

The schedule of business was accepted with one amendment to the FEGP business cycle.

(ii) The schedule of dates for the meetings of the Council and its committees

Council agreed the schedule of meeting dates

INFORMATION MATTERS: The following documents are located on the Governing Council website

27. The confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 25 November 2010

28. The confirmed minutes of the Audit and Risk Committee of 15 November 2010

29. The confirmed minutes of the Further Education and Governance Committee of 7 December 2010.

30. Any other business. The Clerk said that in future, he would send by e-mail any major papers that are not contained in the agenda pack. He would also place them in the governors' folder as usual.

The following materials are in the governors website folder

• The March 2011 edition of the biographical summaries
• To glossary of abbreviations: December 2010, Edition.
• The list of members of Governing Council and the periods of appointment.
• The list of Governing Council members and their contact details.
• The list of the current Committee memberships.
• The current Governing Council skills matrix.

The next meeting of the Governing Council will be held on Friday 8 July 2011 at 12.30 pm at the Devonshire Campus at Buxton, Derby.

Paul H Bridges

Clerk to the Governing Council

21 March 2011

» 8 July 2011

Membership (currently 21 members)

• Mrs Dianne Jeffrey (Chairman) P
• Mr Chris Hughes, Vice-Chairman P
• Mr Peter Allwood P
• Mr Caleb Jackson A
• Mrs Susan Ambler P
• Dr Christine Jones P
• Mr Neil Calvert P
• Ms Joanne Kay P
• Mr Jack Clemson P
• Cllr Andrew Lewer P
• Professor John Coyne P
• Dr Antonios Platsas P
• The Venerable Dr Christopher Cunliffe P
• Mr Peter Richardson A
• Mrs Olivia Dean P
• Ms Andrea Robertson-Begg P
• Mrs Elizabeth Fothergill, Vice-Chairman P
• Mr Martin Rogers P
• The Venerable David Garnett A Cllr Evonne Williams P
• Mr Ian Gibbard P

In attendance at the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Andrew Hartley, Acting Pro Vice-Chancellor P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Philip Plowden, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

By invitation:

Mr James Beckett, President UDSU P

Mr Dominic Anderson, Vice-President, Academic Affairs P

Minutes

1. The Chairman welcomed Professor Philip Plowden, Pro Vice-Chancellor of the University, Mr James Beckett the UDSU President-elect and Mr Dominic Anderson the UDSU Vice-President- elect for Academic Affairs.

2. Apologies were received from Mr Peter Richardson, Mr Caleb Jackson and The Venerable David Garnett.

3. There were no declarations of interest by the members of the Governing Council.

4 The minutes of the meeting of the Governing Council held on 18^th March 2011 were approved subject to a textual correction in section 24.

5. Outstanding actions: it was noted that the outstanding action regarding the setting of tuition fees had been taken.

6. Chairman's report

(i) The Chairman asked the Clerk to thank Mr Paul Ruane for the excellent tour of the refurbished Kirtley Building. The Council had been impressed by the quality of the work and the fine facilities now available to support physical fitness and education studies.

(ii) The Chairman bade farewell to Mr Peter Allwood, Dr Christine Jones, Mr Jack Clemson, Mr Caleb Jackson and The Venerable David Garnett who are standing down form Council. She expressed her gratitude to all the leaving governors for the contributions which they had made and wished them well for the future.

7. Vice-Chancellor's report

The Vice-Chancellor reported on the proposals contained in the White Paper which had been recently published. He expressed disappointment that it did not provide a vision of how Britain would build and sustain a world class higher education sector in the 21^st centuryHe believed that some of the proposals to open up higher education may be at the risk of quality. Under the proposals, there would be no restriction of the recruitment of students holding two As and a grade B at A level (or better). This would be attractive to the most selective universities. The University has about 250 such students each year. (post meeting note Hefce believe 135) Providers who set fees of less than £6,000 will be permitted to recruit as many students as they wish. FE colleges are expected to set such fees. Most of the university sector was located between these positions. Most universities had concluded that they would need to set fees at considerably higher that £6,000 in order to cover costs and invest. The government had also decided to try to drive down prices by taking a total of 20,000 places from those institutions which propose to charge more than £6,000 - the universities - put the places into a pool and then permit these institutions intending to charge less than an average of £7,500 and who had evidence of a good quality provision, to bid for additional places. The Vice-Chancellor summarised the prospects for the University: it has set [subject to approval] an average fee of £7,481 (post meeting note OFFA have calculated £7336 net of bursaries); it has received very good institutional audit reports from the Quality Assurance Agency; it has had sound results in the national student survey and it has a good level of accreditation of its professional programmes. So the Vice-Chancellor anticipated that the University will be able to make such bids.

The Vice-Chancellor felt that it was important that each student enters the most suitable University for him or her and this did not necessarily correlate with the media's perception of the rank order of universities. Location, course content and university atmosphere may be more critical for some students than the factors actually used in the compilation of the league tables. He also noted that the University has only 600 national scholarships (300 from national scheme plus 300 match funded by the university); which is rather less than the 1,200 anticipated eligible students. Some universities may be fortunate to have sufficient scholarships for all of their eligible students.

Council noted that the University is setting out what students can expect of the University as a student charter. The Vice-Chancellor was committed to the 'food-label' approach in making sure that prospective students can have a clear picture of what to expect

The Vice-Chancellor announced that Councillor Andrew Lewer had been appointed Deputy Chair of the Local Government Association. This bogy has responsibility for matters relating to health, education and other matters. This was a significant achievement

8. The University of Derby Students' Union

Jack Clemson noted that James Beckett and Dominic Anderson had been elected on a record number of registered votes and this was extremely pleasing. The new team is gearing up for the start on 1^st August. James Beckett and Dominic Anderson emphasised their commitment to raising the student experience and wanted to ensure that the interests of all students are represented.

Decision matters

9. The financial forecast

Hari Punchihewa, Deputy Chief Executive and Finance Director reminded the Council that he had presented the financial forecast in March. He had now replaced the default position on fees (£6,000) with the proposed level of fees and he had also included the increased costs which arise for the proposed arrangements. He had therefore amended the financial forecast accordingly. These had been scrutinised by FEGP.

DECISION: Governing Council approved the revised forecast 2011/12 to 2015/16 and endorsed the decision of the Executive to submit the financial forecast to HEFCE.

10. The budget

The Deputy Chief Executive and Finance Director commented that he had decided to reduce the number of review meetings this year to make the budgeting process more efficient. He was pleased to report that the budget process using the affordability model had worked very smoothly. Through this method he had been able to identify a capital budget, an IT infrastructure budget and a Strategic Investment Fund. Thus the budget would permit significant investment and it was expected to deliver an acceptable surplus.

DECISIONS:

(i) Governing Council approved the proposed budget for 2011/12 including the General Capital Fund (£2m), the IT Strategy Fund (£3m) and the Strategic Investment Fund (£2m).

(ii) Governing Council approved that the current method of capital allocation will apply for 2011/12 in respect of both Capital and Strategic Investment funds, with the Finance Director on behalf of Executive to identify priority expenditure projects for approval by the Executive and report back to Council with full listings as appropriate.

(iii) Council noted the Income and Expenditure budgets for 2011/12 for DSRL and Derby Theatre.

11. A special resolution regarding proposed amendment to the Articles of Association

The Deputy Chief Executive reported that the present articles of association are limiting in terms of the geographic region in which the University can locate its educational activities and also in the level of such activity. A change is required to ensure that the University acts in accordance with its constitution when it brings Leek College within the University group. The matter had been put to the Privy Council by Eversheds and it was confirmed that the change will be acceptable to the Privy Council subject to the agreement of the Governing Council. The members of Council were fully supportive.

A staff governor asked if there was a problem resulting from activities that were already taking place? The Vice-Chancellor said that the Executive had identified a number of activities which had gone beyond the boundaries of the constitution over a number of years preceding the present administration and therefore the Executive was taking action now. The Council intends to undertake a review of the Constitution during 2011/12.

DECISION: Governing Council approved the resolution. (The Company Secretary signed the resolution at the end of the meeting for submission to the Privy Council. A copy of the approved resolution has been lodged with these minutes.)

12. A proposal to bring Leek College of Further Education into the University of Derby Group

The Council received a paper updating the information on the due diligence process and setting out the process of acquisition. The Vice-Chancellor explained that the formal process of acquisition may need to follow the SFA merger process but this will not be completed until all the stages have taken place. This will be in February 2012 at the earliest. In the mean time there is a risk of further financial deterioration and loss of business as confidence in the current college drains away and competitors seek to recruit in Leek. The University proposes to put a management agreement in place by September so that it is able to support Leek College with expertise and arrest the decline. The management agreement would remain in place until the 'merger'is finalised. The Leek College governing body will retain certain responsibilities relating to the senior post holders which it is not permitted to delegate. It is proposed that two members of the University join the Leek governing body.

Council members were supportive of the measures proposed in the paper. It was noted that the merger has been discussed more extensively at FEGP Committee.

DECISION

Governing Council approved the proposed merger with Leek College through a two stage process.

(i) The implementation of an interim management agreement with Leek College for a period up to 12 months, on terms agreeable to the Executive with appropriate protections for the University. Professor John Coyne, Vice-Chancellor and Hari Punchihewa, Deputy Chief Executive and Finance Director were given delegated authority to sign the agreement. This was expected to be in place by 15th September 2011.

As part of the above agreement, the University is to nominate two representatives to join the Corporation Board of Leek College for the same duration.

(ii) The dissolution of the Corporation and the acquisition of Leek College as part of the University of Derby Group. It was expected that the acquisition would be completed within 12 months.

13. The Key Performance indicators

The Vice-Chancellor presented the June KPI dashboard and report which showed that most KPIs are meeting the set targets. He reported that he had established a review group to consider revision of the KPI set so that these could inform the response to HEFCE regarding institutional sustainability. The revised set would be proposed to Council at the meeting scheduled for October 2011.

Councillor Williams asked if the management normally proposes an action plan for each KPI which is shown as red? The Vice-Chancellor replied that this had not been the practice hitherto but he welcomed the proposal and would endorse this approach for the future.

DECISION: Council accepted the June KPI report and welcomed the prospect of a revised set of KPI at the next meeting.

14. The appointment of three governors to the Honorary Awards Committee

DECISION

Council approved the appointment of Mr Ian Gibbard, Mrs Joanne Kay and Mrs Andrea Robertson-Begg to the Honorary Awards Committee in place of Mrs Dianne Jeffrey, Mr Peter Allwood and Dr Christine Jones who are leaving the Council.

Performance Reports

16. The preliminary findings of the Quality Assurance Agency Collaborative Audit, May 2011

Professor Liz Barnes was very pleased to report an excellent outcome from the recent QAA audit of collaborative provision. The QAA had concluded that confidence can be placed in the soundness of the institution's current and likely future management of the academic standards of its awards and the learning opportunities that it provides for students. The preliminary finding indicated that there were likely to be five commendations which was highly encouraging. There was only one advisable recommendation and this related to technical clarity of the Diploma Supplement and this had already been addressed. There were three desirable recommendations which would be acted upon. The draft report is expected imminently. (post meeting note - the final report reflected key findings and was received in the university on July 13^th)

Council recorded its pleasure in receiving such a good report and asked that its congratulations should be conveyed to the staff concerned.

17. Planned academic developments designed to enhance student achievement

Professor Liz Barnes reported to Council that Academic Board had approved a proposal to move from 15 credit standard modules to the larger 20 credit standard modules. This would enable studies to be pursued to greater depth and would tend to reduce the volume of summative assessment taken by students and assessed by staff. It was noted that the majority of universities now employ 20 credit modules and so this change might also assist credit transfer and the recognition of learning. Professor Plowden indicated that he supported the change. He noted that there was a minor downside in that it lessened the choice for students but this was more than compensated by the advantages outlined by Professor Barnes.

The Vice-Chairman emphasised the importance of making the academic year more flexible. The Vice-Chancellor remarked that it would be valuable to be able to commence studies on 1^st September so that the end of the first semester could coincide with Christmas but that this would require external changes. The Vice-President UDSU (designate) noted that there was a philosophical transition towards a teaching based structure.

Professor Barnes reported that one reason for the low completion rate was that students who did not complete the honours degree programme only received a step-off award if they asked. This meant that those who failed to ask for a step-off award received no award. They did not receive one automatically. This made them a non-completer whereas they could be recorded as completing an interim award. The University would address this matter immediately because it is contributing to the present problem.

Professor Barnes also reported that the decision had been taken to change to a percentage marking scale which would result in some improvements for students. The current VP Academic Affairs noted that it would be necessary to urge assessors to use the full range of the percentage scale otherwise students could be disadvantaged by the change. But he was confident that the University could achieve the full use of the scale and he was very much behind the change which students had requested. The Vice-Chancellor added that students would have a better understanding of the percentage scale. The Chairman commended these positive developments and thanked Professor Barnes for the paper.

18. The Deputy Chief Executive & Finance Director's Report

FINANCE MATTERS

(i) The monthly management accounts for 30^th April and forecast 3

The Deputy Chief Executive & Finance Director presented the interim management accounts for the end of April. He noted that there had been some savings from staff turnover because the budget always assumes full occupancy of posts. In practice there are usually some savings. So he anticipated the year end operational surplus to be over £11.5m and he was pleased to report that the cash balance rests at £29m. The Council noted that the financial position had been explored by FEGP.

UPDATE ON KEY STRATEGIC DEVELOPMENTS

(iii) To consider the general update

Council received the general update. There were no questions.

(iv) Update report on University of Derby Corporate

Andrew Hartley presented the update report on University of Derby Corporate which showed that there would be an operational surplus this year. Next year there is likely to be a surplus before taking into account the HEFCE funding which is being phased out. It was noted that following representations, the cessation of the grant was now to be phased rather than stopped with immediate effect. In response to questions, the Commercial Director commented that the University was not adversely affected by the job losses at Bombardier but UDC would be contributing to a task force to support those becoming unemployed.

(v) An update on on-line distance learning

Andrew Hartley explained that hitherto on-line learning had been something of a cottage industry but now, with the establishment of a department, the University has a full business plan. The University is aiming for £10m income by 2015/16. Members of Council asked how robust the business plan was considered to be since other institutions would be tempted into this lucrative market. Mr Hartley replied that the University had been investing in the infrastructure over a number of years and this experience gave it some advantage. The move to larger modules was likely to be helpful. Members of Council suggested that since the students might be living remotely or in the immediate vicinity of the University, it might be wise to discontinue the use of the term 'distance learning'.

(vi) Update on international developments

Andrew Hartley reported that international student recruitment had exceeded the target number of 835 students. He was also pleased to report the appointment of Mr Nick Slade as Director of the International Department. Mr Slade had now commenced his duties. The Council received the report.

(vii) Update report on Derby Theatre

The University had been informed that it may apply to the Arts Council with the support of Derby City Council for funds which have been ring-fenced for Derby Theatre.

.

ESTATES MATTERS

(ix) The Estates Projects update

The Vice-Chancellor commented that he was pleased with the governors' reaction to the refurbished Kirtley Building. Although Green Lane has not been sold, it was pleasing that the area has now been designated as the St Peter's Quarter Business Improvement District and this might bring significant benefits as it has for businesses in the Cathedral Quarter.

HUMAN RESOURCES

19. The Human Resources report

The Vice-Chancellor presented the HR report. The Vice-Chancellor drew attention to the national strike action taken by the Universities and Colleges Union. The national Union had called national strike on 30^th June and 74 local members responded to the call. The Vice-Chancellor explained that he wrote to all staff indicating that while he was sympathetic to their concerns regarding their pension entitlements, he could not identify with actions which could damage the interests of our students. He therefore indicated that any partial fulfilment of duties was not acceptable and pay would only be made to those who undertake a normal day's work. He announced that the Executive had decided to make an offer to professional and support staff who negotiate their terms and conditions locally a payment in addition to any salary settlement of £200 [flat rate] and the University would cover the tax so the recipient does not need to pay tax.

The Vice-Chancellor was pleased to report that the University was the first university to have the accolade of investors in diversity accreditation. He remarked that there had been a robust process and very good assessors.

ADMISSIONS AND RECRUITMENT

20. The position regarding student applications for 2011/12

Professor Barnes reported that the University had received a record number of applications in 2010/11 but this had not translated so fully into accepted places. A proportion of the applicants may have applied in order to have the security of a place at Derby which they would take up if other applications were unsuccessful. Nevertheless the position is much healthier than in the past and there are now a number of courses which are full long before clearing. Professor Barnes was pleased to report that the recruitment of international students in 2010/11 had exceeded the target. She explained that there would be some balancing to achieve with the entry in September 2011. Some programmes are full and are at risk of over-recruiting while others are under-recruited at the moment.

The governors were interested to know the position regarding the recruitment of students in engineering. The prospects are improving as programmes in the School of Technology gain chartered engineering status. The programmes are designed to appeal to the mainstream market. Engineering is still short of target for 2011.

Governing Council received the report.

CORPORATE RESPONSIBILITY AND CORPORATE RISKS

21. The semi-annual environmental responsibility report

The Vice-Chancellor reported very good progress. While the use of electricity has gone up, the consumption of gas has decreased. In 2011 the University had moved up from 48^th to 22^nd in the People and Planet Environmental League Table and been awarded a 'First Class' certificate. The photovoltaic cells are performing well but the energy production from the wind turbines has been disappointing. This may be due in part to less wind than expected.

Council received the report.

22. The June edition of the Corporate Risk Register

Andrew Hartley, University Risk Manager, presented the June edition of the Corporate Risk Register and drew attention to recent developments. He noted that staff pay costs are rising and so this residual risk was moderate and rising. The University has a risk element associated with the League Table position. The University had not improved its position in the most recent iteration and so this risk was regarded as rising to the upper end of moderate. There would now be a concerted attempt to improve the performance in relevant areas in order to achieve a higher position in future league tables. The Corporate Management Team had decided to introduce a new risk to reflect the major programme of academic developments now under way. This risk was assessed as moderate.

The Chairman thanked Mr Hartley for the risk register.

Verbal reports from the Committees of Council

23. Audit and Risk Committee: Mr Martin Rogers, Chairman reported that he had participated in the consideration of the tender for the external audit function. It had been decided to award the contract to KPMG. The contract for the internal audit function is due to come to tender in 2011/12.

24. Finance and General Purposes Committee: Mr Ian Gibbard, Chairman commented that the Council could be assured about the financial position of the University. This had been explored in some detail by FEGP.

25Further Education Governance Committee: Mrs Liz Fothergill, Chairman was pleased to report that Buxton College was making significant progress in the journey towards the Grade 1 target. 70% of the provision was now Grade 2. Mrs Fothergill had noted that FE staff had indicated that they supported the merger with Leek College. She also remarked on the highly successful FE Awards evening on 6^th July 2011.

The Chairman thanked Mrs Fothergil, Mr Gibbard and Mr Rogers for their reports.

INFORMATION MATTERS: The following documents are located on the Governing Council website

26. Council received the UDSU year-end forecast and the proposed budget for 2011/12 and the latest UD Students Union performance indicators. CJ and JC

27. Council received the confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 10^th March 2011.

28. Council received the confirmed minutes of the Audit and Risk Committee of 7^th March 2011

29. Council received the confirmed minutes of the Further Education and Governance Committee of 1^st March 2011.

30. Any other business none

Council noted that the next meeting of the Governing Council will be held on Friday 21^st October 2011 at 12.30 pm at the Kedleston Road Site, Derby.

Paul H Bridges

Clerk to the Governing Council

12^th July 2011

Retirement of Dianne Jeffrey CBE DL Pro Chancellor and Chairman of the Governing Council

A record of the tributes given after the close of the meeting

Professor John Coyne, Vice-Chancellor expressed his deepest thanks to Dianne Jeffrey for her brilliant leadership of the Council. The relationship between the vice-chancellor and the chairman of the governing body was critical. This had invariably been good over the seven years that he had been Vice-Chancellor. He had greatly appreciated Dianne's judgement and passion and everyone has benefited. Dianne would always be welcome at the University.

Chris Hughes said that he now faced a real problem in matching the passion, commitment and brilliant leadership but he would do his best to build upon the legacy!

Liz Fothergill recalled her initial nervousness on joining the Council in 1999 which seem quite unfriendly in those days. But she had admired the inspiration and passion which Dianne had brought to the Council and it had been a privilege to serve on Council. She felt that Dianne was the perfect Chair because she made everyone feel that they had a part to play. Council had been decisive and effective.

Ian Gibbard spoke of the high standing that Dianne has in the Health Service circles. It had been a privilege to serve on Council.

Staff and student governors joined in the tributes.

Mrs Jeffrey replied that she was proud to have been associated with the University and that she greatly appreciated the open door to return to visit the University. She felt that it had been a wonderful journey. She recalled that in her first year, she had decided not to speak but just to listen and learn. Then she felt able to contribute. She had felt fortunate to have the support of some very gifted colleagues as the chairs of the committees of Council. She praised the input and achievements of the incoming chairman, the Finance Director and the excellent relationship with the Vice-Chancellor. This had been a most productive partnership. There had been difficult issues but these had been shared and resolved.

The Council then celebrated the contributions from all the departing governors over champagne and a cake.

Paul H Bridges

Clerk to the Governing Council

12^th July 2011

» 21 October 2011

THESE MINUTES HAVE BEEN EDITED

Membership

• Mr Chris Hughes, Chairman* P
• Mr Ian Gibbard Chair FEGPA
• Mr Dominic Anderson P
• Ms Joanne Kay P
• Mrs Susan Ambler P
• Councillor Andrew Lewer P
• Mr James Beckett P
• Dr Antonios Platsas P
• Mr Neil Calvert P
• Mr Peter Richardson P
• Professor John Coyne P
• Ms Andrea Robertson-Begg P
• The Venerable Dr Christopher Cunliffe A
• Mr Martin Rogers Chair Audit& Risk P
• Mrs Olivia Dean P
• Councillor Evonne Williams A
• Mrs Elizabeth Fothergill Chair FEGC P

(*Also Chair of the Nominations and Remuneration Committee)

In attendance of the seminar and the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Philip Plowden, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

The Minutes

1. The Chairman welcomed Mr James Beckett UDSU President and Mr Dom Anderson Vice-President Academic Affairs and thanked them for the excellent presentation in the governors' seminar immediately before the meeting.

2. Apologies for absence were received from the Venerable Christopher Cunliffe and Mr Ian Gibbard. Apologies for early departure were received from Mr James Beckett and Mr Dom Anderson.

3. There were no declarations of interest by the members of the Governing Council.

4 Council approved the minutes of the meeting of the Governing Council held on 8^th July 2011.

5. There were no matters arising and no outstanding matters.

7. The Chairman's report

The Chairman expressed thanks to the membership for their confidence in appointing him as Chairman and explained that as the higher education environment was changing there would inevitably be some changes necessary in the way in which the governing body works. Sometimes external events require a rapid response and so planned items may be brought forward earlier than expected and important items may need to be brought to the attention of the governors without the normal accompanying written paper. Council will need to be prepared to act swiftly and surely on occasions in order to ensure that the University responds appropriately to a given opportunity. The Chairman will assume that governors have read the agenda papers before the meeting so that meeting time is used for debate. The Chairman confirmed that the residential meeting at Makeney Hall on 24^th and 25^th November will run from lunchtime on Thursday until lunchtime on Friday and will not extend earlier on the Thursday and later on the Friday as had been envisaged previously.

8. Vice-Chancellor's report

Professor John Coyne, the Vice-Chancellor presented his written report and announced that there were now four additional significant items which he would present in turn:

(i) Recruitment 2012/13 and making a bid to the pool of FT undergraduate student places:

HEFCE had issued guidance on 17^th October and required a response for universities by 11^th November - much earlier than had been expected. A pool of 20,000 full time undergraduate student places would be created and universities which satisfy a range of criteria would be permitted to apply for a share of the pool. Every university would be assessed regarding the contribution that it would make to the pool of student places. The procedure for the calculation is complicated. Firstly, all students with grades of AAB or better are excluded from the considerations. The control number for 2010/11 would be reduced by 2% and a further 2% in respect of growth. Then there would be a standard contribution of 9%. If a university offers large numbers of places in the SIVS (strategically important and vulnerable subjects), these are protected. Universities will only be permitted to make a bid for student places from the pool if they satisfy all of the following criteria:

(a) They have set FT UG fees of less than £7,500 [average] for September 2012

(b) The Quality Assurance Agency has expressed full confidence at institutional audit

(c) The National Student Survey scores are at or above benchmark

(d) The non-completion levels are not regarded as a matter for concern

(e) Programmes have professional accreditation when this is appropriate

The Vice-Chancellor explained that the University of Derby satisfies all these criteria and so it will be able to bid. According to the University's calculations the University's control number of 3,400 would be reduced to 2,700 following the creation of the pool of student places. The Vice-Chancellor therefore proposed to bid for sufficient students to return the recruitment level back to the control number. In fact if there were any signs of the imposition of a pro rata reduction, the Vice-Chancellor was inclined to bid for more places. There is an appetite to grow the student numbers in the areas where students had performed well and the satisfaction levels are high. It was noted that no University would be allowed to grow by more than 20%.

Peter Richardson was fully supportive of the University position and congratulated the Vice-Chancellor on the position that had been reached. Cllr Andrew Lewer asked if any of the universities that had set high fees were re-visiting their position now. The Vice-Chancellor replied that the government had made it fairly plain what the expectations of universities were. It is known that about 28 universities have approached OFFA to ask for permission to reconsider their OFFA agreement and the levels of their fees. The members of Council remarked that these universities were very fortunate indeed to have this opportunity.

(ii) Full time undergraduate Student recruitment 2011/12

The Vice-Chancellor reported that the University was between 80 and 85 students over the control number. The Vice-Chancellor said that he had been in contact with HEFCE to notify them in advance and to confirm that he had been attempting to keep to the control number. The University had not been engaged in a tactic to gain an advantage (as others may have done) by recruiting extra students this year in the belief that the control number would not apply in future.

(iii) The non-completion figures

The Vice-Chancellor reported that the non-completion figure was greatly improved this year (11.5%) compared to last year (24%). This kept the University back in the contract range which is also good news. At the same time the Vice-Chancellor noted that the average UCAS tariff points held by entrants continues to improve and is this year estimated to be approaching 300 UCAS points. One disappointment was the fall in the proportion of students with First or Upper Second Class Honours Degrees, This had dropped from 51% to 46 % but this was due to a change in the calculation which now includes the retakes in the year in which they complete. This downward shift will only apply this year and the calculation will be more favourable next year.

9. A full and very informative UDSU report had been given at the pre-meeting seminar.

The Annual General Meeting

The Chairman declared open the Annual General Meeting of the University of Derby Private Company, Limited by Guarantee and Exempt Charity.

10. The Statutory Accounts for 2010/11 The Council received the following documents:

(i) Financial results excluding DSRL and Derby Theatre (Schedule 1)

(ii) Balance sheet excluding DSRL and Derby Theatre (Schedule 2)

(iii) Derbyshire Student Residences Limited (DSRL) accounts (Schedule 3)

(iv) Derby Theatre accounts (Schedule 4)

(v)Consolidated income and expenditure account (Schedule 5)

(vi) The annual accounts (Schedule 6)

The Chairman noted that the reports, which reflected a very strong performance over the past year had been fully discussed by Finance, Employment and General Purposes Committee and by Audit and Risk Committee. He invited further questions. There were none. On behalf of the governors, the Chairman congratulated the Deputy Chief Executive and Finance Director and his team for their excellent work in completing the financial statements earlier than most other universities.

DECISION: Governing Council approved the Annual Accounts for 2010/11.

11. The letter of representation

DECISION: Governing Council approved the letter of representation.

DECISION: Governing Council also approved a proposed letter of support to be signed and issued by the Deputy Chief Executive and Finance Director in respect of the University of Derby subsidiary companies.

12. The appointment of KPMG as the External Auditors for the financial year 2011/12.

It was noted that there had been a full competitive tendering process in the summer in which KPMG had participated and had been selected.

DECISION: Governing Council approved the appointment of KPMG as External Auditors for 2011/12.

The Chairman, Vice-Chancellor and Company Secretary signed the Accounts

The Chairman declared the Annual General Meeting closed. The Council meeting continued.

OTHER DECISION ITEMS

13. A review of the University Constitution

Governing Council received a short paper prepared by the Clerk which set out the background to the development of the current constitution and drew attention to some of its shortcomings. The Chairman thanked the Clerk for the paper and underlined the inadequacy of the current memorandum of association. We needed a simpler more enabling document for now and the future. Council agreed that the constitution should be reviewed.

DECISION: Governing Council approved the proposal to establish a committee to review the Constitution and prepare a new compact Constitution together with a set or ordinances.

The Chairman invited volunteers for the review committee and the following persons were noted: Chris Hughes (Chairman), James Beckett, Neil Calvert, Olivia Dean, Joanne Kay, Dr Antonios Platsas, Professor Philip Plowden and Paul Bridges as Secretary. The dates of the initial meetings would be passed to all members if others wished to attend.

Annual reports

14. The Annual Report of the Audit and Risk Committee 2010 -11

Mr Martin Rogers, Chairman of Audit and Risk Committee presented the annual report. He commented that the report was favourable and indicated no special areas of concern. It was noted that one word was subject to change on page five. The University was waiting to hear from the external auditors KPMG. The Chairman underlined the importance of Audit and Risk in the future.

DECISION: Governing Council approved the Annual Report of Audit and Risk Committee for 2010/11.

15. The of Academic Board annual report

Professor Liz Barnes presented the annual report from Academic Board. The Chairman asked her what the main challenge is ahead. Professor Barnes drew attention to the task of completing the major academic exercise of converting the curriculum from 15 to 20 credit modules. The Vice-Chancellor explained that the larger standard size of module would facilitate deeper learning and at the same time would lessen the assessment burden for students. This involves reviewing every programme curriculum. The University also has to produce the Key Information Set (KIS) for every programme by March 2012. Professor Plowden added that the Learning Enhancement and Innovation department had been created to underpin learning developments but this was proving difficult at present because senior staff are currently in the process of being appointed. This means that the support for academic staff engaged in these processes is not as strong as the University would wish. Staff governors confirmed that there are some indications of strain.

Olivia Dean welcomed the more rigorous approach to student deadlines and commented that extending deadlines is seldom the kindness that it might appear to be. Professor Barnes agreed. Neil Calvert noted that A levels are shifting towards terminal assessments with less opportunity for re-sits. So this would mean less expectation of re-sit opportunities from students in the future. He also commented that it was difficult to see how the proposed post qualification application system will work if it is introduced in due course. The Vice-Chancellor noted that there were indications that students were tending to return to traditional subjects. Recruitment to Biology, Geography and Geology, History, Mathematics and Initial Teacher Training had all gone up this year reversing long term declines in some instances.

DECISION: Governing Council approved the Academic Board report for 2010/11.

16. The Corporate Planning Statement

The Vice-Chancellor introduced the Statement and explained that it represented a comprehensive report on progress over the past year. He drew attention to the large increase in the number of clients now engaged with the University of Derby Corporate.

Mrs Liz Fothergill was pleased to see the articulation of the Derby Graduate but could not see encouragement to take up engineering as a career. The Vice-Chancellor commented that recruitment to engineering at the University is still quite problematic. Mr Calvert added that the same applied in schools. Compared to the physical sciences, engineering was not regarded as an attractive prospect.

DECISION: Governing Council approved the Corporate Planning Statement for 2010/11.

Leek College

17. An update report on the merger with Leek College of Further Education

The Vice-Chancellor reported that two members of staff had now been invited to join the governing body of Leek College. He was also pleased to report that Leek College had recruited well for the current year. The merger was going to take time because there is no standard reference work on how it should be done. However the Minister of State has indicated his support in principle for the merger and this is very significant. The University will exercise a management role through the management committee until the merger completion.

Governing Council received the update report.

PERFORMANCE REPORTS

Academic matters

16. An update on the University undergraduate non-completion position

Governing Council noted that it had already considered this matter in the Vice-Chancellor's report.

Governing Council received the update report.

17. A report on the progress in the reshaping of the academic portfolio

Professor Liz Barnes presented the paper on reshaping the academic portfolio. The Council considered the outcomes of the National Student Survey which was appended to the paper. Council noted that five programmes had scored 100% satisfaction and a majority of programmes had scored more than 80% but eight programmes had scored less than 60% which was poor. The key theme was communication. History had introduced a series of commendable practices and other subjects could learn from their experience. Professor Philip Plowden has planned a series of meetings with the underperforming and high performing areas. The Chairman commented that the evidence also showed that when subjects make the effort, they can raise the scores. Professor Plowden pointed out that some areas with low UCAS entry scores still managed to achieve high scores in the National Student Survey. Professor Barnes drew attention to the fine improvement in nursing since last year. The Vice-Chancellor added that the University would continue to perform as well as possible in the area of student satisfaction.

Council was pleased to note the progress and endorsed the effort devoted to student satisfaction with their programmes and received the report.

The Key Performance Measures and Sustainability

18. The October 2011 edition of the University's Key Performance Indicators

Professor Coyne presented the latest edition of performances in relation to the key performance indicators. Council noted that the KPI dashboard was green with the exception of graduate employment which was red. The Vice-Chancellor explained that graduate employment was defined as such if the majority of employees are graduates. In this respect it remained an anomaly that setting up a business was still regarded as a non-graduate activity. This may change if a higher percentage of graduates became entrepreneurs. There is a need to increase student engagement with employers and although this is under consideration during the redesign of programmes for the new 20 credit framework it will become a major initiative after completion of the restructuring.

Council received the report.

19. A revised set of University Key Performance Indicators

The Vice-Chancellor introduced the paper that proposed a new set of Key Performance Indicators that focused on sustainable University outputs. The HR Director had observed that there was no measure that related to staff and this was clearly a critical area. One possibility was a measure of higher degree qualifications but Council members were not inclined to this view. Another possibility was staff engagement. There was general agreement that a reflection of continuing professional engagement would be appropriate. Antonios Platsas said that, in his opinion, it was the duty of every academic member of staff to update their portfolio and he was unhappy when he encountered complacency. The Vice-Chancellor confirmed that he was minded to include a people measure. Another area that might be of public interest was that of energy conservation and energy generation.

Peter Richardson suggested the inclusion of online learning since this is a University priority. Professor Barnes explained that this came into the performance report category and there would be a quarterly report to the Council on online learning.

Governing Council received the paper and endorsed the views of the Vice-Chancellor.

20. The September edition of the Corporate Risk Register

Council noted that the Corporate Risk Register had been discussed by FEGP and Audit and Risk Committees.

Council received the Corporate Risk Register for October.

21. The institutional performance matrix for 2011/12

The Council noted that the institutional performance matrix had been prepared using a new simpler format. The Chairman had indicated that an improved position in the overall league table position must now become an aim of the University because this affected the perceptions of the University by external bodies and many students in particular. The Vice-Chancellor reported that Professor Barnes is chairing a working group that was examining all the factors and identifying the areas where the University could improve. The point of contact with the league table compilers had been moved from the Press Office to Professor Barnes.

Council received the institutional performance matrix.

22, The annual HEFCE letter of assurance issued in July 2011

The Vice-Chancellor presented the annual HEFCE letter of assurance which had been received in July. The letter had indicated the University was not regarded to be at risk. It did mention a compliance item regarding the need for the governing body to approve the annual Transparency of Costing Report. This has already been notified to Audit and Risk Committee. The letter included a set of metrics at the back. The Vice-Chancellor took the members systematically through each metric pointing out in which quartile is best and then in which part of the national rankings the University is actually placed.

(i) Historical surplus - the University is in the top decile

(ii) Net liquidity - better than average for the sector

(iii) Exposure from borrowing - the University has significant borrowings arising from the residential builds nearly 15 years ago (Derbyshire Student Residences Limited - DSRL). Some Universities remove these loans from the balance sheet. If the University had done this, its borrowings would appear very low indeed and the University would probably appear in a high position in the sector rankings.

(iv) Net cash - the University is probably in the top decile.

(v) Staff cost as a proportion of the total (53.5%) - this is exactly the desirable position.

(vi) The condition of the physical estate - only 8% is poor (categories C and D) so the University is amongst the best.

The Vice-Chancellor concluded that this letter evidenced a University in very good shape.

23. The Pro Vice Chancellor for Resources and Finance Director's report

Council received and noted:

(i) The Current Year Performance and cash flow position (Schedule 8). International recruitment is below target but is steadily improving.

(ii) The Capital Expenditure allocations.(Schedule 9)

(iii) The Estates Project Update indicated the Britannia Mill extension remains in the cost envelope despite the delay caused by the bankruptcy of the first contractor. The contractor (OPM) which had refurbished the Kirtley Building had sought an additional payment of £487 k. The University had sought external professional advice and been told that it owed £162 k. This had been offered to OPM and accepted. In order to make the Harpur Hill more attractive to property developers and also to improve the health and safety position, demolition of the buildings has commenced. The rubble is being converted into hard core to avoid the area being designated green space. Work is commencing on developing Estates Strategy Three.

(iv) The Treasury Report - there had been a 12% return on long term investments which was considered good.

(v) The IT strategy was received.

The Chairman indicated that he wanted Council to view the University as a whole, including all the subsidiaries. He reminded governors that all committee papers are available to them in the website folder and that they were advised to consult them.

24. A report on the progress of Derby Theatre

The Vice-Chancellor reported that Derby City Council had removed funding support for Derby Theatre. This was extremely disappointing and makes a serious impact on the nature of the Theatre.

Henceforth Derby Theatre will primarily be a learning theatre for the University of Derby performance students and it will aim to attract more commercial receiving productions and local drama groups, with an unfortunate reduction in original productions. Council agreed that we must keep abreast of the situation and be aware of both the potential financial and reputational risk.

25. The University of Derby Corporate

The Deputy Chief Executive and Finance Director reported that the University of Derby Corporate is performing well with a large increase in clients. It has the challenge of achieving a surplus despite the sudden cessation of support funding from HEFCE which was originally expected to continue for two more years. This decision is being actively challenged along with other funding changes from HEFCE which are proving detrimental. Council will be kept fully aware of the consequences.

26. The 2011/12 enrolment position

Professor Liz Barnes reported the recruitment position. As mentioned earlier, FT undergraduate recruitment is 85 above the control. Part time recruitment, international recruitment and Further Education are below target but are still recruiting. The University had received a visit from the UK Border Agency which has become a uniformed service protecting UK borders. Peter Richardson emphasised the challenge of the international agenda. The Vice Chancellor and Professor Plowden responded to say that the risk is in fact quite low because the University is not dependent on overseas recruitment.

27. The Human Resources report

The Vice-Chancellor reported that there had been settlements on pay by both Unison and UCU. There was however prospective industrial action regarding the protection of pensions. The Vice-Chancellor had written to the Unions to say that while he understood their anxiety regarding their pensions, thought needed to be given to the harm to students if they took industrial action. He could not sympathise with any action that harmed students.

The Vice-Chancellor was pleased to announce a new appointment: Professor Christine White, Head of the School of Art and Design who comes from Nottingham Trent University. In addition Mr Ian Roberts has been appointed interim Head of the Business School for one year.

Olivia Dean drew attention to the huge cost in terms of time spent defending a claim from a member of staff at a tribunal. The Vice-Chancellor said that it had probably cost in the order of £200 k to defend the University from false allegations raised by this former member of staff. The decision whether to defend the good name of the University was difficult in these circumstances. The Deputy Chief Executive said that the University takes firm action in certain situations to avoid the perception that the University is a 'soft touch'. There was now another claim for £6,000 from the same litigant which might also go to tribunal at great cost.

Chairmen's reports

23.Council received brief verbal reports from the chairmen of FEGC and Audit and Risk Committees.

INFORMATION MATTERS: The following documents are located on the Governing Council website

24. The confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 13June 2011

25. The confirmed minutes of the Audit and Risk Committee of 6 June 2011

26. The confirmed minutes of the Further Education and Governance Committee of 21 June 2011 and unconfirmed minutes of 20 September 2011

The next meeting of the Governing Council will be held on Friday 9 December 2011 at 12.30 pm at the Kedleston Road Site, Derby.

Paul H Bridges

Clerk to the Governing Council

24 October 2011

» 22 October 2010

Membership (currently 21 members)

• Mrs Dianne Jeffrey (Chairman) P
• Mr Chris Hughes, Vice-Chairman P
• Mr Peter Allwood P
• Mr Caleb Jackson P
• Mrs Susan Ambler P
• Dr Christine Jones P
• Mr Jack Clemson P
• Ms Joanne Kay P
• Professor John Coyne P
• Cllr Andrew Lewer P
• The Venerable Dr Christopher Cunliffe P
• Dr Antonios Platsas P
• Mrs Olivia Dean P
• Mr Peter Richardson P
• Mrs Elizabeth Fothergill, Vice-Chairman P
• Ms Andrea Robertson-Begg P
• The Venerable David Garnett A
• Mr Martin Rogers P
• Mr Ian Gibbard P
• Ms Alison Smail P
• Cllr Evonne Williams P

In attendance at the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Professor Michael Gunn, Pro Vice-Chancellor P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

Invited as observer: Mr Simon Redfern, Senior Publicity Manager P

The agenda

1. The Chairman welcomed to Councillor Evonne Williams, Cabinet Member for Children and Young People, Derby City Council, Mrs Susan Ambler, co-opted non-teaching member of staff and Mr Simon Redfern Senior Publicity Officer who attended as an observer.

2. Apologies were received for later arrival from Dr Platsas.

3. There were no declarations of interest.

4 The minutes of the meeting of the Governing Council held on 9^th July 2010 were approved.

5. Matters arising.

Item 11.5: Olivia Dean reported that she had attended the training on safeguarding at Buxton and had found the session informative.

6. Outstanding actions from the previous meetings of the Governing Council

Council noted that the final sum reclaimed by HEFCE would be known in early November.

7. Chairman's report

(i) The Chairman reported that she had attended a meeting of Chairmen of University Councils in which there was evidently much alarm at the financial turbulence in the HE sector. She felt that she was amongst just a small number of chairmen who felt confident that their institution was fit for the future and would emerge successful when the turbulence abates. In particular, communications between management and governance are good and the University will rise above the challenge.

(ii) The Chairman invited volunteers to complete feedback forms at the end of the meeting to comment on the organisation of business for the meeting.

8. Vice-Chancellor's report (GC/10/3/8)

(i) Professor Coyne was personally delighted for Michael Gunn that he had been appointed as Vice-Chancellor at Staffordshire University and would be taking up his new post in the New Year.

(ii) Professor Helen Langton has taken up her new post as Executive Dean at the University of West of England. Professor Guy Daly from Coventry University has been appointed as the new Dean of Education Health and Sciences. He will join the University in January.

(iii) Dr Ruth Ayres will join the University on 15^th November as the Dean of Learning Enhancement and Innovation.

(iv) It was disappointing to report that 212 applicants who had accepted firm places and in many cases booked accommodation in hall had not turned up to enrol. The number of 'no-shows' had increased markedly this year. Five had gone to other universities, which is against UCAS rules and others had just changed their minds and had not thought it important to tell the University. As a consequence there was a risk of wasted places and lower than expected income. The University will aim to recruit more students in January.

(v) The Vice-Chancellor drew attention to the implications of the recently published Browne Review into higher education and student finance, as well as the just-released Comprehensive Spending Review He commented that the Browne Review should not be under-estimated. This would be the biggest change for 50 years as the cost of higher education would shift wholesale from the state to the student who therefore would carry a significant debt obligation. Students who satisfy the entry qualification requirements set by the state, would be given a voucher to study wherever they are offered a place. This would give the government a mechanism by which it can control the number of places sought each year by raising or lowering the threshold at which aspiring students are deemed qualified. The proposed new system is potentially workable but it remains to be seen how students would respond to the high debt potential. The Vice-Chancellor also pointed out that In the new climate, universities which discuss fee levels in meetings together could be accused of participating in a price-fixing cartel.

The Vice-Chancellor advised that financial year 2011/12 will be extremely challenging and the possibility of a within-year adjustment by HEFCE could not be ruled out. The Vice-Chancellor has cautioned the government on the pace of change because a great deal of change will be compressed into the next academic year. The indications are that HEFCE funding for tuition at Derby could be reduced by, at best, £23 M or at worst by £30 M per annum. The University will prepare a series of scenarios to discuss at the residential meeting in November. The University will need to make sure that its processes are functional and purposeful and not simply designed to meet regulatory requirements.

The Chairman invited the views of the two academic pro vice-chancellors. Professor Barnes and Professor Gunn emphasised the importance of appreciating the students as customers who will demand the best quality of provision.

One member noted that the changes would coincide with the change in the leadership of the Governing Council. He wondered whether the existing corporate planning process is sufficiently fit-for-purpose. The University could be a very different institution in four years' time. The Vice-Chairman [chairman designate] commented that in the new financial climate Governing Council may need to behave more like a commercial board. The Vice-Chancellor observed that the problem encountered with students this year may be avoided in future if students are required to pay a deposit. He also commented that the quality-related stream of funding may be restricted to a number of research-intensive universities. Furthermore, while the government reduces the levels of funding paid directly by the state it is also likely to increase the burden of accountability by strengthening the regulatory bodies and creating a Higher Education Council.

(vi) The Vice-Chancellor reported that following the Sturgess Fields Hearing the Derby City Council had been advised to make two-thirds of the land a Town Green. The University had requested that this should not be implemented for two years so that it could respond with a constructive joint management proposal that would be advantageous to local residents as well as the University. This proposal was rejected. As a consequence the Vice-Chancellor said that he had responded by instructing that fencing should installed limiting access to the remaining land [the meadow] to prevent the same fate occurring to the remainder of the University's land.

9. The University of Derby Students' Union

Mr Caleb Jackson reported that the UDSU was approaching the elections of 38 part time positions. The sports teams had had quite a good start with about 55% of matches as wins. This was quite pleasing because most had won promotion last year to higher divisions this year. The UDSU is now recruiting coaches to help them improve further. The Freshers' Week was a fabulous experience and a great success. IKEA has give £10 k to help fund community projects, which is greatly appreciated. The UDSU was entering a competition which measures the input of students in University decision-making. They hoped to get a high rating. Jack Clemson reported that the UDSU would be participating in demonstrations against the changes recommended by the Browne Review but he assured Governing Council that at the end of the day the UD SU aimed to support the University and work with the University management.

The Annual General Meeting

The Chairman declared open the Annual General Meeting of the University of Derby Private Company, Limited by Guarantee and Exempt Charity.

10. The Statutory Accounts for 2009/10 (GC/10/3/10)

The Deputy Chief Executive and Finance Director reported that the University only operating result with a surplus of £9 M against a budget of £6 M was a good result. Derbyshire Student Residences Ltd had made a surplus of £1 M compared with a budget of £700 k. The DCE also reported a good level of cash in hand in the bank and revenue reserves which now exceeded £50 M. The year-end accounting and auditing had been completed by the end of September.

The DCE explained the change in pension liabilities from a calculation based on the change in Retail Price Index to one based on the Consumer Price Index had resulted in a favourable adjustment of £6.7 M. This has been initially reflected in the Income and Expenditure Account and this position was agreed by KPMG. However, sector practice overwhelmingly favours the inclusion of the improvement in the Statement of Total Recognised Gains and Losses (STRGL) therefore the University has decided to align with sector practice. It may be more appropriate to use this alternative treatment so that there is not an artificial component to the surplus. About £500 k of the £6.7 M is attributable to staff with enhanced pensions so the position now is that £500 k will go on to the Income and Expenditure account and the remaining £6.2 M is shown within the STRGL.

The DCE reported that the maximum possible claw-back from HEFCE in respect to the non-completion data is £1.2 M and the University has allowed for this within the budget. KPMG will sign-off the audited accounts providing HEFCE do not identify any material difference between the University's data and the position according to the HESA return with regard to non-completions. There was some further discussion as to whether it was appropriate for the Council to sign the accounts at this moment. The Vice-Chancellor reported that he had seen the report today and he believed that there would not be a material difference and so the auditors would be in a position to sign off the accounts.

DECISION: The Council approved the statutory accounts.

DECISION: The Council approved the letter of representation.

11. The appointment of KPMG as the External Auditors for the financial year 2010/11.

There was a discussion of the re-appointment of the external auditors for 2010/11. It was agreed that although the Council has had complete confidence in our auditors KPMG, it was good and usual practice to have a review at regular intervals. The Finance Director was asked to prepare a paper on our options for this process for the next meeting of the Audit Committee.

DECISION: The Council approved the re-appointment of KPMG as the auditors for 2010/11.

ACTION: Council asked the Finance Director to prepare a plan and process for a regular review of the auditors, for the consideration of the Audit and Risk Committee on 15^th November 2010.

The Chairman declared the Annual General Meeting closed. The Council meeting continued.

12. The action plan regarding non-completion data submitted to HEFCE. (GC/10/3/12)

The Vice-Chancellor presented the HEFCE audit report, the Registrar's update and the Action Plan. The new procedures would provide a sound platform. Professor Gunn was working with Mrs Hughes to provide robust tests. KPMG auditors will also carry out tests to satisfy themselves that the data are accurate. The DCE will sign off on behalf of the Vice-Chancellor. The Vice-Chancellor pointed out to Council that 188 students who had gained honours degree awards in the normal scheduled time, taking their assessments at the first opportunity had nonetheless been regarded as non-completers according to the HEFCE rules, This showed the nonsense of the former rules which had now been replaced by HEFCE for 2010/11.

A staff governor asked why the matter had not been picked up by the internal auditors who are expected to audit systems on behalf of the University. The Vice-Chancellor explained that for several years the University had been applying the rules using guidelines agreed with HEFCE and the auditors had worked to the same guidance. So there had been no issue. Following the debacle at London Metropolitan University with the serious misreporting of student numbers, HEFCE had resorted to a very strict interpretation of the rules. The internal auditors picked up and reported some data issues in a requested audit in early May 2010 and these were confirmed subsequently in the HEFCE audit. No blame can be placed with the internal auditors.

DECISION: The Council endorsed the action plan.

Annual reports and proposed quinquennial review

13. The Annual Report of the Audit and Risk Committee 2009 -10 (GC/10/3/13)

Martin Rogers, Chairman of Audit and Risk Committee introduced the Annual Report of the Audit and Risk Committee. The Chairman of FEGP commented that it was a good report. He recommended that the committee should assess the risks for the future at a forthcoming meeting. The Chairman of Council commented that Council might wish to review the current Council committee structure to see if it is appropriate for the future.

DECISION: Governing Council approved the Annual Report of Audit and Risk Committee.

14. (i) To approve the Academic Board annual report (GC/10/3/14i)

Professor Liz Barnes presented the annual report of Academic Board. She drew attention to the steps which had been taken to improve student performance. She explained that the criteria used to assess the category of honours to be awarded have been simplified following remarks received from external examiners. The Vice President UDSU Academic Affairs said that he believed that it was important that students should feel appropriately challenged.

DECISION; Governing Council approved the report.

(ii) To approve the Corporate Planning Statement. (GC/10/3/14ii) John Coyne

The Deputy Chief Executive described the purpose of the report and the way in which it is structured. The Vice-Chancellor explained that this report is submitted annually. It is compiled in accordance with a format which is set down by HEFCE.

DECISION; Governing Council approved the report for submission to HEFCE.

15. The Chairman's one-to-one meetings with governors.

The chairman thanked the members of Council for the time that they had spent in the one-to-one meetings with her. The feedback had been most useful. She listed the main points:

Aspects of the University which made governors proud

• The financial position

• The team spirit and friendly atmosphere in the Council
• Teaching delivery which takes place outside the classroom
• The quality of the academic provision

Aspects which cause frustration

• The difficulty with the availability of space at Markeaton Site
• The modest extent of the international recruitment at Derby
• The difficulties with the non-completion data
• The limited use of governors: perhaps there should be a governors' think tank.

Aspects which make governors fearful

• Will students in FE Colleges demand that the FE colleges offer degree courses?
• Are staff governors compromised in what they can say and do on Governing Council?
• Will traditional academic disciplines be squeezed out by the changes in funding in the HE sector
• Who is the guardian of the traditional subjects like History, English and Geography
• Do governors challenge enough? This is why staff governors are important because they know more about University operations.

Aspects over which governors expressed hope

• Governors hope to foster more pride in the University
• Governors hope the University will not lose sight of widening participation
• Governors hope that Derby will continue to see itself as the regional university for Derbyshire
• Governors hope that Council will be prepared to take tough decisions when necessary
• Governors hope for closer ties with City and County

Governors' suggestions

• Governors would like to be able to attend other committees. (NOTE: Governors are welcome to do so.)
• Committee Chairs should receive the weekly issue of Times HE supplement
• Governors might benefit from being subjected to the life of a student for one day and go through all the trials and tribulations that they have to suffer in enrolment, finding class rooms, writing assignments, submitting assignments and travelling with modest means. Many Governors thought this an exciting idea.

16. The Register of Interests on the University website. (GC/10/3/16)

Council considered the proposal that the register of interests should be placed on the website. This was discussed in some detail. It was felt that the transparency that it would give would be beneficial. It would be very important that the record is regularly updated. Overall, members felt that this was a good development were in favour of the proposal.

DECISION: Council agreed to the proposal but asked that there should be an introductory paragraph which explains that the information is refreshed annually in July and August.

Peformance reports

17. The academic report for 2009/10 (GC/10/3/17)

The Professor Michael Gunn and Professor Liz Barnes presented the academic report. They drew attention to the focus of attention on assessment.

One member noted the disappointment that had been expressed regarding the relatively low proportion of students obtaining a good honours degree. At 50.1% this was higher than previously but below the sector norm.. Council felt that overall It was the learning experience that is really important and that perhaps there are other indicators that should be considered as well as the class of honours. such as a way of measuring value-added? Governors noted that the average UCAS score held by entrants had increased in recent years but the actual range is quite wide.

One member asked if Law had done well again in the Student Satisfaction ratings again. It was noted that the score had slipped a bit compared with last year. Another welcomed the focus on student performance. Professor Gunn commented that there was always more that the programme team can take on. The programme team needs to interact positively with the students on the programme. This is fundamentally what it is about.

The Clerk commented that the national Measuring and Recording Scoping Group chaired by Sir Robert Burgess, Vice-Chancellor of Leicester University (2004) had endeavoured to identify a single method for measuring value added but had not succeeded because the notion of value-added is so variable across the sector. Students entering Cambridge with four passes at grade A could only match their entry achievements but could not easily show value added in any quantitative way. However, it would probably be feasible to devise suitable indices at Derby. He would recommend adopting quantitative and qualitative measures.

DECISION: Council accepted the academic report.

18. The UD Students Union performance indicators (GC/10/3/18)

Caleb Jackson presented the UDSU report and explained some of the results. In some measures the result had fallen short of the target but the UDSU had identified the action needed.

The Council complimented the UDSU on the careful systematic analysis. The format gives a clear picture. The KPI targets are appropriately demanding.

Council received the report.

19. (i) The October 2010 edition of the University's Key Performance Indicators (GC/10/3/19i)

Professor John Coyne presented the KPI dashboard. He commented that all the financial indicators were purples and greens indicating that the targets had been attained or well exceeded whereas all the student related indicators were amber or red indicating shortfalls compared to targets. He drew attention to the recruitment of overseas students which had fallen from purple to red in one step. These matters are being addressed in the current year.

(ii) The September edition of the Corporate Risk Register. (GC/10/3/19ii) John Coyne

The September edition of the corporate risk register has been examined by Audit and Risk Committee and FEGP and was accepted.

20. The Pro Vice Chancellor for Resources and Finance Director's report

The Deputy Chief Executive and Finance Director presented the financial reports and the reports on Derby Theatre and University of Derby Corporate. He reported that the Derby Theatre floor had been strengthened and that the Treasury Report has been subject to the scrutiny of FEGP. Peter Richardson questioned whether the treasury policy on investment was scrutinised by appropriately skilled individuals. The University has a very limited risk appetite in terms of its investments and so this gives the Finance Director enormous responsibility. Mr Richardson offered to discuss this outside the meeting with the Finance Director.

ACTION: It was agreed thatPeter Richardson and Ian Gibbard (Chairman FEGP) should meet with Hari Punchihewa to discuss any points of clarification with regard to the approved investment policy.

Councillor Andrew Lewer requested clarification regarding the plan for the opening of the Enterprise Centre. The DCE explained that the University wanted to invite the Universities minister David Willetts to open the Enterprise Centre. The University was hoping that he could open the building as part of a visit to Derby in the near future.

22. The 2010/11 enrolment and indicative income position (GC/10/3/22)

Council received the report.

23. The Human Resources report. (GC/10/3/23)

Professor John Coyne reported that it was necessary to impose a recruitment freeze which meant that there would not be an automatic replacement for each post which becomes vacant. This was necessary because HEFCE could not give an assurance that there would not be an within-year adjustment to the funding in the current year. This meant that the University needed to be very prudent with the existing resource. All positions which become vacant will require specific Executive approval to proceed to replacement.

Corporate responsibility

24. The annual environmental responsibility report (GC/10/3/24)

The report was received.

Faculty and Departmental news (GC/10/3/25)

The summary of faculty and departmental news was received. The Chairman asked that thanks should be conveyed to Helen Lingwood for preparing the summary.

INFORMATION MATTERS: The following documents are located on the Governing Council website

26. Council received the confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 14 June 2010

27. Council received the confirmed minutes of the Audit and Risk Committee of 7 June 2010

28. Council received the confirmed minutes of the Further Education and Governance Committee of 22^nd June 2010 and unconfirmed minutes of 21 September 2010

The next meeting of the Governing Council will be held on Friday 10 December 2009 at 12.30 pm at the Kedleston Road Site, Derby.

Paul H Bridges

Clerk to the Governing Council

26 October 2010

» 10 December 2010

Membership (currently 21 members)

• Mrs Dianne Jeffrey (Chairman) P Mr Chris Hughes, Vice-Chairman P
• Mr Peter Allwood A Mr Caleb Jackson P
• Mrs Susan Ambler P Dr Christine Jones P
• Mr Jack Clemson P Ms Joanne Kay P
• Professor John Coyne P Cllr Andrew Lewer P
• The Venerable Dr Christopher Cunliffe P Dr Antonios Platsas P
• Mrs Olivia Dean P Mr Peter Richardson P
• Mrs Elizabeth Fothergill, Vice-Chairman P Ms Andrea Robertson-Begg P
• The Venerable David Garnett A Mr Martin Rogers A
• Mr Ian Gibbard P Cllr Evonne Williams A

In attendance at the main meeting:

• Mr Hari Punchihewa, Deputy Chief Executive and Finance Director P
• Andrew Hartley, Acting Pro Vice-Chancellor P
• Professor Elizabeth Barnes, Pro Vice-Chancellor P
• Professor Paul Bridges, Clerk to the Governing Council P

The Governing Council Seminar

Sports and Exercise: Recreation, Competition and Performance

Presenters:

Hari Punchihewa, Deputy Chief Executive & Finance Director: Chair of Sports Development Group

Mr Ollie Shearer, Sports Development Manager

Mr Kelvin Browne, President of the UD Athletic Union

Dr Peter Jones, Head of Sports and Exercise

Hari Punchihewa explained that two years ago he had been tasked by the Vice-Chancellor to oversee a concerted development of sport at the University. He had appointed Ollie Shearer as the Sports Development Manager and, together with Ian Willgoose, Director of Estates they had led a Sports Development Group. The group would oversee the development of facilities and a culture with three key words: participation, opportunities and performance. Very quickly the Group devised a strategy and investment followed leading to a major improvement in facilities for sport and recreation.

Ollie Shearer explained how the Group had identified clear objectives. They would work collaboratively with local groups to build facilities and performance to bring the University in to a prominent position within ten years. The brand would be TEAM DERBY. The targets are ambitious. There will be 1,800 participating students in Derby teams by 2012; 25% staff engagement by 2011 and the University will enter the top 50 for performance by 2015. Kelvin Browne reported the impressive improvement which followed the year after the installation of the 3G Sports pitches and flood lighting. There were now 26 clubs, 33 teams, and 23 national governing body qualified coaches. University had climbed an unprecedented ten places in the league. Kelvin listed some of the notable sporting talents who had chosen to study at Derby.

Dr Peter Jones explained how he aimed to promote sports through enabling students to be involved in working with individuals and teams which would enhance their future employability. He had established links with local teams which would raise important opportunities for the students. Ollie Shearer continued on the same theme placing emphasis on the importance of working in partnership with local sporting clubs in a range of different sports. Under the banner of TEAMDERBY, the University would rise to be a recognised top institution for sport by 2020.

Members were interested on how the interests of disabled staff and students would be catered for. Ollie Shearer reported that the New Kirtley would offer some facilities and he was aware of a number of disabled students and staff who are committed to sports and exercise. He planned to make further developments for the disabled. Members of Council asked for more information about collaboration with local sports clubs. It was noted that there are significant arrangements with Derby County, Derby Athletic, Burton Albion many other clubs. Peter Richardson gave the strongest possible encouragement to take advantage of opportunities over the next two years. These would be the best the University would have.

The Vice-Chancellor asked the presenters for their recommendation regarding the next location for investment. Peter Jones remarked that while the new Kirtley facility would be wonderful, the next step would be to look at the Sports hall. Kelvin Browne emphasised the importance of identifying and supporting sporting talent. The Vice-Chancellor noted that Derby City Council was planning for major sports developments including water sports and an indoor track. Hari Punchihewa concluded that the next developments would include changing rooms with a small stand close to the pitches at KR, the expansion of the sports hall and the patenting of the brand TEAMDERBY.

The Chairman thanked the team for their excellent and informative presentation.

Minutes

The meeting opened with a short report on the national student demonstrations in London and the further demonstrations at a number of the universities where students had occupied buildings in action against the proposed increase in tuition fees. Jack Clemson and Professor John Coyne had appeared on East Midlands Today on the day of the vote. Jack Clemson had spoken very eloquently on the issue of the rise in tuition fees. The University fully respected the students' position and arguments. They had no issue against the University of Derby where the relationship between the Executive and the UDSU Sabbatical Officers was very good. The Chairman commended the UDSU officers on their approach and the effectiveness with which they had lobbied Members of Parliament. This had resulted in a very close vote in Parliament.

1. Apologies were received from Peter Allwood, Venerable David Garnett and Martin Rogers.

2. There were no declarations of interest.

3 The minutes of the meeting of the Governing Council held on 22^nd October 2010 were approved. (GC/10/4/3)

4. Matters arising: There were no matters arising.

5. It was noted that both outstanding actions had been completed and were now closed.

6. Chairman's report:

The Chairman welcomed Mr Andrew Hartley, Acting Pro Vice-Chancellor to his first meeting. She announced that, sadly, Mr Peter Allwood had signalled his intention to step down from Council in July 2011 when he takes retirement from Lichfield Cathedral School. Peter will have served the Council for eight years and will be greatly missed for his valuable input. She also announced that the Informal Meeting of the Governing Council on 13 January 2011 would focus of the University's tuition fees strategy and follow-up after the residential meeting held at Makeney Hall. (Note: The Clerk tabled the report of the residential meeting at the end of the meeting.)

7. Vice-Chancellor's report (GC/10/4/7)

The Vice-Chancellor thanked the members of Council for their input to the residential strategy meeting held at Makeney Hall in November. He was pleased to announce that there had been a 197% increase in applications for places on the Primary Education course since the OFSTED inspection and the outcome of Grade 1. The Health Authority had now largely restored the education provision contract thanks to the efforts of Professor Lorraine Ellis. They had also been in touch with the University to enquire about the possibility of transferring some provision from another provider to the University. He was also pleased to report that the non-completion rate for 2009/10 had improved by 6% compared to the previous year. The fairer mechanism employed for making the calculation was a primary factor in this improvement. The Vice-Chancellor added that the University had not exceeded its control number and the numbers now come within the envelope defined by HEFCE. He had therefore submitted, as invited by HEFCE, a claim against the implementation of the claw-back and he believed that the case was strong.

The recent open day had coincided with the first heavy fall of snow. Despite the conditions, 750 students and parents had travelled long distances to attend the open day and the University was delighted with the attendance. Applications for September 2011 are up by 42% against a national increase of just 15%.

The Vice-Chairman asked if any claw-back was likely to be an assessed fraction of the claw-back amount (£1.3m). The Vice-Chancellor thought that it was most likely to be all or nothing. The University would probably hear in January, in the mean time the University would continue to plan on a prudent basis assuming that the letter would not be successful. The Chairman of FEGP asked if the number of non-completions would become financially less important in terms of HEFCE funding. The Vice-Chancellor replied that this was probably the case but the future of HEFCE is not yet known. Council members urged the University to continue its efforts to monitor non-completion and keep the proportion of non-completing students as low as possible. The Vice-Chancellor added that the University will wish to consider lifting the fees to above £6,000 but some additional conditions had been introduced in the period just before the vote in Parliament in order to provide a disincentive to raising fees beyond the figure of £6,000 and it was not known what these conditions are.

Council members if the University had identified the reasons for the higher than expected number of no-show place holders. The Vice-Chancellor replied that his investigation had discovered that the customer services management ha been predominantly one-way with little encouragement of the response from those holding conditional and confirmed places. This would change in 2011 and there would be a more interactive approach adopted. It was also noted that relatively wealthy parents might decide to pay fees up front which would, even at £9,000 per year, be less than the school fees that they had been paying hitherto. They would do this to avoid their children having to pay interest on a loan of up to £27,000 over three years. If they took this action then this would make the funds available to other students.

Councillor Andrew Lewer commented that even when senior managers had decided to reduce bureaucracy and discontinue unnecessary processes, it took time for this revised approach to infiltrate down through organisations. The University might find that there were still requests to carry out tasks that were no longer necessary. The Vice-Chancellor commented that he concurred and he was keen to save resource expended in producing data solely for the purpose of fulfilling external compliance.

Council received the report.

8. The University of Derby Students' Union

Caleb Jackson reported that work is proceeding on the community service project. Derby had been divided into four quadrants and currently the focus is on the Ashbourne area. He was pleased to note that the University had responded to a student request to extend the bus service to all sites until 9.00 pm. The UDSU had held a Board meeting to which all 27 part time UDSU representatives had been invited and 16 had attended which was better than in 2009. The recent heavy snow had disrupted the sports fixture programme but the teams had continued to train. The UDSU is scheduled to be audited fairly soon and the target is a Bronze award. He also reported that an international society has been established. Jack Clemson reported that the Programme representative programme had been very successful. Over 100 people attended and the calibre of the questions and responses was high. One immediate outcome had been the extended bus times.

Council received the report and commended the UDSU on the developments.

Decision matters

9. The application from Mr Neil Calvert for appointment (GC/10/4/9)

Council members considered the application and the recommendation of Nominations and Remuneration Committee.

DECISION: Council approved the appointment of Mr Neil Calvert as an independent member of the Governing Council for the period until 31 July 2013. He would then be eligible for re-appointment for a further two periods of three years.

10i The University Performance Matrix of Targets for 2010/11 (GC/10/4/10i)

Professor Coyne presented the performance matrix which is used to assess the overall performance of the University in July 2011. This assessment is then used to determine the performance-related bonuses payable to the 132 members of the leadership team on personal contracts. Professor Coyne hastened to assure Council that the bonuses are restrained and are on a scale up to 10% and bore no resemblance to bankers' bonuses. The Chairman commented that the criteria for outstanding institutional performance were extremely stretching.

DECISION: Council approved the performance matrix

10ii The proposal that the Deputy Chief Executive and Finance Director shall be authorised to sign an application approved by the Council for the provision of the NatWest Bulk Cash Service. The Council notes that the application includes an indemnity in favour of the Bank and giving of this indemnity is in the interests of the Company.

Council noted that the proposal asked the University to take responsibility for the cash stored in the machines. Council noted that the risk was covered to a specified limit by University insurance. Council asked if the installation of one machine would be enough. The Deputy Chief Executive and Finance Director felt that it was best to assess the position after a period of operation with one machine before adding a second machine.

DECISION: Council approved the proposal and accepted the risk that is involved.

Performance Reports

Equality and Diversity and Human Resources

11. The annual report of the Equality and Diversity Committee 2009/10 (GC/10/4/11)

Professor Coyne presented the annual report of the Equality and Diversity Committee. He commented that part of the report were quite pleasing although there were indications of some unevenness in academic performance between BME and other students which are being investigated. Following the departure of Michael Gunn, the Committee is chaired by the HR Director Martyn Holden. A new chairman will be appointed in due course.

Mrs Fothergill drew the Councils attention to the considerable extent that some universities go to comply with legislation. She commented that the governing councils of some universities have s significant role to play in implementation of policy. The Governing Council was pleased to note that it has already appointed Ms Joanne Kay as the Equality and Diversity Champion. The Vice-Chairman suggested that the recommendations should become targets and then these be presented in a leaflet.

DECISION: Governing Council received the report.

12. The Human Resources report (GC/10/4/12)

Professor John Coyne presented the HR report and Council noted that the background statistics pack is located on the Governor's website. He reported that the University had adopted a prudent policy with regard to staff recruitment. Staff leaving the University are not automatically replaced. The Executive examines each vacancy and comes to a decision as to whether it needs to be replaced or a different arrangement put into place. He reported that Mr Darren Tidmarsh has been appointed HR Director at Sheffield College. He will be replaced by internal arrangements. He also reported that the University had succeeded in recruiting an occupational health adviser. Governors drew attention on the increasing pressure for staff to be flexible in their conduct of their duties. Professor Coyne added that the HR department had been examining contracts to make sure that they are suitable for the kinds of work patterns the University will need to operate in the future.

Council received the report.

The Key Performance Measures and Sustainability

13. (i) The December 2010 edition of the University's Key Performance Indicators (GC/10/4/13i)

Professor John Coyne presented the Key Performance Indicator dashboard. He commented that while student recruitment had been disappointing as a result of the no-shows, the number of applications for September 2011 was extremely positive and really warranted a bright purple. The next edition of the KPI dashboard due in March would be more meaningful in terms of reflecting the overall University performance.

Council received the report.

(ii) The November edition of the Corporate Risk Register. (GC/10/4/13ii)

The Council noted that the health and safety risk has been transferred to the Health and Safety risk register.

Council received the report.

14. (i) The summary UD Students' Union year end accounts for 2009/10. (GC/10/4/14i)

Caleb Jackson reported that there had been an operating deficit of £85 k. Part of the loss related to the sports budget and part related to the sales from the store but the UDSU had received a substantial VAT refund of £333 k which had resulted in a significant overall rise in reserves at the year end. The UDSU holds a monthly meeting with Susan Ambler which is proving very useful.

(ii) To consider the latest UD Students Union performance indicators. (GC/10/4/14ii)

Caleb Jackson and Jack Clemson presented the UDSU performance indicators which indicated a satisfactory position. Members of Council were interest know the period of overlap when the new sabbatical offers are elected. It was noted that at some universities it is mere 30 days in which the new sabbaticals must learn the business but at Derby there is a substantial period of overlap.

Council received the reports.

15.The Deputy Chief Executive & Finance Director's Report

(i) The monthly management accounts for 31 October 2010 (GC/10/4/15)

The Deputy Chief Executive presented the October management accounts. He drew attention to the fact that the income is phased in accordance to the budget until November. The accounts show a favourable variance to budget because teaching and support costs are £0.7m less than budget. This was partly due to pay settlements being less than anticipated and also a tightening of the approval process for staff recruitment

(ii) The flexed budget(Schedules 1 and 2)

Council received the flexed budget noting that there were minor adjustments to incorporate year-end balances and no change to the planned operational surplus of £7.0m.

(iii) Forecast One

Forecast One shows a minor improvement in the operational surplus of £163 k compared to budget. There would be some reduction in core income if the threatened claw-back proceeds but if the letter of appeal is successful, this loss will be reduced. The University is planning prudently and the accounts assume that the appeal is unsuccessful. The forecast has also taken into account the reduction in fee income due to the shortfall in the recruitment of FT undergraduate and international students. Council noted that in view of current uncertainties HEFCE has indicated that it does not require the forecasts from institutions until 15 April 2011.

The Vice-Chairman commented that it was really important that the University should adopt the prudent path and control costs tightly. He noted the potential upsides and hoped that the University would be able to bank them without adversely affecting the student experience. The Deputy Chief Executive confirmed that this was indeed the approach that the University is taking. The Vice-Chancellor pointed out that ministers are likely to press for a reduction in funding in the financial year 2011/12 which commences in April. He thought it likely that ministers would press HEFCE to deliver some of the savings from the beginning that year which would coincide with the last four months of the University 2010/11 financial year. It was therefore probable that there will be some reduction in spending that would affect the current financial year.

Council received Forecast One.

(iv) The Cash Flow Forecast(Schedule 4)

Council received the cash-flow forecast for the period to July 2015.

(v) The Estates Project Update

The Deputy Chief Executive reported that ROK had gone into administration and the administrators had not made alternative arrangements for the completion of the Britannia Mill project. The contract was therefore terminated. An independent evaluation had been made of the work completed to date and the sum that is payable by the University. The University has requested the two contractors who were initially shortlisted to present a proposal to complete the project. The Deputy Chief Executive confirmed that a new contractor should be in place by mid-January.

Council received the Estates update.

Derby Theatre and University of Derby Corporate

16. (i) An update report on Derby Theatre (GC/10/4/16i)

Council noted that the contribution from Derby City Council would reduce by 33% next year and the Arts Council has announced a reduction of 6.9% for next year. The University has a choice of options regarding the future contract with Derby Live. The University could continue the present contract or it could decide to end the contract with Derby Live. One problem with the contract from the Theatre perspective is that Derby Live prevents the Derby Theatre from presenting a production that might compete with the production at other Derby venues and so the Theatre is not always able to offer the production which it regards as most suitable for the season. The Derby Theatre managers are bringing in consultants to advise as to which way forward would be most successful. Council suggested that Mr Peter Allwood, governor and Head Teacher as Lichfield Cathedral School could be consulted on this matter because he has much relevant experience to offer.

It was noted that Derby City has kept its agreement to upgrade and refresh the facings of the shops in and around the Theatre and the whole area looks much brighter now. Council members recommended that the University should continue to foster good relations with the Derby City Council.

The Vice-Chancellor described the experience of visiting the Derby Theatre for a performance as pleasant. Travelling, parking and gaining access to the Derby Theatre were all straight-forward and very good value.

Council received the report.

(ii) An update report on University of Derby Corporate (GC/10/4/16ii)

Andrew Hartley, Acting Pro Vice-Chancellor reported that the University of Derby Corporate continues to make good progress.

Council received the report.

Admissions and recruitment

17. (i)Student recruitment in 2010/11. (GC/10/4/17i)

Council received the report and noted that the contents had already been fully discussed under the earlier items and at Finance, Employment and General Purposes Committee.

(ii) A report on the Access to Learning Fund withdrawals for 2009/10 (GC/10/4/17ii)

The Vice-Chancellor reported that there had been a 17% reduction in funding but an 18% increase in demand for this fund. The University is developing further financial guidance for students.

Council received the report.

18. The position regarding student applications for2011/12 (GC/10/4/18) John Coyne

Professor Liz Barnes presented the report on the position regarding applications. The number of applications for January 2011 is not as high as had been expected although it is rising steadily. There are now 68 applications. The position for September 2011 is healthy with an increase of 40% compared to last year.

The UDSU Vice President for Academic Affairs commended the initiative to promote modules as bite-sized courses. It was hoped that this would enable interested persons to join existing classes although there may be more of a market for evening and week end courses.

Council received the report.

Collaborative audit

19. The forthcoming Quality Assurance Agency Collaborative audit. (GC/10/4/19)

Professor Liz Barnes presented a short paper regarding the preparations for the collaborative audit. It was now three years since the last audit and the University would be able to demonstrate improvements.

Council received the report.

Corporate responsibility

20. The annual environmental responsibility report (GC/10/4/20)

The Deputy Chief Executive and Finance Director presented the annual report for environmental responsibility. He suggested that in future the Council might like to receive a report every six months at alternate meetings. The decision as to which meetings would be most appropriate would be discussed with the Clerk.

Council received the report.

Verbal reports from the Committees of Council

The chairman of each Committee is invited to report briefly on any matters which they feel should be brought to the attention of the full Governing Council and are not already on the Council agenda.

21. Audit and Risk Committee: There were no special points to raise.

22. Finance and General Purposes Committee: Mr Ian Gibbard, Chairman

Mr Gibbard suggested that the strategy for IT Services would be of interest to the full Council. FEGP had requested the opportunity to see the assumptions used in the scenarios to arrive at the fees that the University will charge.

23 Further Education Governance Committee: Mrs Liz Fothergill, Chairman

Mrs Liz Fothergill reminded Council that the Buxton College of Further Education which the brand name for the University's further education provision is aiming for a Grade 1 at the next OFSTED inspection. At the last inspection the College was given Grade 3. The current position as demonstrated in the latest Self Assessment Report is that the provision is still at Grade 3. The Committee was a little disappointed that there had not been more progress although it was recognised that the new management team has only been in place since April 2010. She commended the efforts of the Head of the College to bring about a change in culture and remove some of the older attitudes which are holding the College back.

Olivia Dean observed that some of the targets are almost impossible to attain for a rural college like the one at Buxton because the targets assume a city context with large numbers of apprentice opportunities. Professor Coyne announced that he had received today a letter indicating the intention to set minimum contract values. He also drew attention to the presentation given by Jane Peacock of the Learning Funding Agency in which she indicated that the Agency anticipates that 73% of FE providers will be financially unsustainable by 2013/14. This was a very high proportion. He believed that it would be important for the University to work with colleges in the vicinity because it would be a risk to have vulnerable colleges in the University's supply chain.

Other Council matters

24 Governing Council received the skills matrix. (GC/10/4/24)

INFORMATION MATTERS: The following documents are located on the Governing Council website

25. The confirmed minutes of the Finance, Employment and General Purposes Committee meeting held on 14 October 2010

26. The confirmed minutes of the Audit and Risk Committee of 11 October 2010

27. The confirmed minutes of the Further Education and Governance Committee of 21 September 2010.

28. Council noted that the next meeting of the Council will be chaired by Chris Hughes the Vice-Chairman and Chairman Designate.

The next quarterly meeting of the Governing Council will be held on Friday 18 March 2011 at 12.30 pm at the Kedleston Road Site, Derby.

Paul H Bridges

Clerk to the Governing Council

17 December 2010