Transparency data

SLC Board meeting minutes June 2023

Updated 24 April 2024

1. Attendees

1.1 Present

• Peter Lauener (PL) - Chair

• Chris Larmer (CL) - Chief Executive Officer

• Mary Curnock Cook (MCC) - Non-Executive Director

• Gary Page (GP) - Non-Executive Director

• Charlotte Moar (CM) - Non-Executive Director

• Rona Ruthen (RR) – Non-Executive Director

• Stephen Tetlow (ST) - Non-Executive Director

• Andrew Wathey (AW) – Non-Executive Director

• Natasha Toothill (NT) – Non-Executive Director

• David Wallace (DW) - Deputy Chief Executive Officer

• Audrey McColl (AMC) – Chief Financial Officer

• Gary Womersley (GW) - Company Secretary

1.2 Also in attendance

• Ailsa Harris (AH) - DfE (by videoconference)

• Lauren McNamara (LMC) – Scottish Government (by videoconference)

• Chris Williams (CW) - Welsh Government (by videoconference)

• Laura Irvine (LI) – Department for the Economy NI (by videoconference)

• Jason Dunham (JD) – CIO

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

• David Beattie (DB) – Executive Director, Change, Data and Repayments

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

• Helen Bogan (HB) – Head of Governance and Planning

• Stuart Brydson (SB) - Board Secretary (Secretariat)

• Adam Treslove (AT) - Head of Corporate Affairs (for Item 6.1 only) (by videoconference)

• Nicholas McDermott (NMC) – Chief of Staff (for item 5.1 only)

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

• Mark Cassidy (MC) – Head of Estates and Sourcing (for item 8.1 only)

• Ash Marston (AM) – Head of Infrastructure and Operations (for item 8.2 only)

• Angela McCafferty (AMCC) – Head of Change Governance and Assurance (for item 8.3 only)

• Paula McEvoy (PMC) – Head of Repayments Strategy and Insight (for item 8.4 only)

• Kevin O’Connor (KO) – Head of Repayment and Customer Service (for item 8.4 only)

2. Apologies

• Helen Bogan (SLC)

• Julia Kinniburgh (DfE)

• Jonny O’Callaghan (NI)

• Sinead Gallagher (Welsh Government)

• Catherine Topley (Scottish Government)

3. FOI Notice

Where asterisks (*) appear, these sections have been excluded from the minutes before placing on the website as the subject under discussion falls within one or more of the exemptions contained in Part II of the Freedom of Information Act 2000 and can be reasonably withheld.

4. Chairman’s Opening Remarks / Directors’ Matters / Declarations of Interest

PL was called away on an urgent matter as the meeting was starting and so AW assumed the chair until his return.

5. Strategic items

5.1 CEO Report

CL introduced the CEO Report, noting that he would focus on three main subjects: Academic Cycle, DSA, and GDPR.

Academic Cycle

CL explained that although, at the time of the April Board meeting which was very early in the cycle, applications had been around 10% higher than the previous year the situation had now changed, with applications now 3.5% lower than the same time last year. CL noted that although applications were lower overall, processing queues were higher. It was estimated that the high number of tasks in the queues were caused largely by duplicates in digital customer uploads, and certain applications generating more tasks than others. JC agreed and noted that Data Centre of Excellence colleagues were currently investigating the data.

CL highlighted that processing queues had been a focus at the regular Tuesday and Thursday Major Incident Team meetings of the ELT and SMT. Operations colleagues had now processed 15% more tasks than the same time last year, and the internal and external quality assurance measures were above target. CL thanked JC and her teams for their hard work.

In response to a question from MCC on the effect of Customer Engagement Management (CEM) on the queues, CL explained that there were two separate sides to CEM: making it easier for colleagues to serve customers, and then the broader benefit of getting more customers into self-service. The firm intention was to encourage customers to increase use of self-service, which in turn would drive down calls and contacts.

TT asked whether robotic process automation (RPA) in operations could have a benefit. CL explained that RPA could yield significant benefits with simple processes but the complex policy landscape which SLC was required to operate limited its use in the application cycle.

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PL joined the meeting.

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Corporate Performance Dashboard

PL noted that a comparison to the previous year on technology green days on the CPD would be helpful.

ACTION: Comparison to last year to be added to the technology green days information on the CPD.

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People Directorate

TT noted that the new Executive Director of People would join SLC in July. CL explained that he was currently also acting as interim Executive Director of People and looked forward to the new member of the ELT starting. He expected her priorities to be getting to know her team, getting to know the ELT and shareholders, and reviewing the broader People corporate strategy.

6. Chair’s Opening Remarks / Directors’ Matters / Declarations of Interest

PL welcomed everyone to the meeting and especially to TT who was attending her first ‘in person’ meeting today.

There were no declarations of interest specific to the meeting.

6.1 Update from the Chair

PL highlighted that he and CL had regular meetings with Baroness Barran, Minister for the School System and Student Finance. The next meeting would focus on progress with this year’s application cycle.

PL also noted that he had attended Skills for Growth 2023, a DfE led event that focussed how the education and training system could best support skills and the economy. This had also been attended by Gillian Keegan, Education Secretary; Kemi Badenoch, Secretary of State for Business and Trade; and Jeremy Hunt, the Chancellor of the Exchequer. Sir Michael Barber, who had been appointed as an adviser to the Chancellor and the Education Secretary on the implementation of the Government’s skills reform programme had led panel discussions of key themes.

PL explained that there would be three meetings of the Board in July, which would be the meeting to review and approve the Annual Report and Accounts 2022-23 on 7 July, an Organisational Effectiveness and Efficiency Deep Dive on 11 July, and the regular meeting of the Board on 31 July.

PL noted that today may be the last physical Board meeting in the Bothwell Street offices due to the move to 10 Clyde Place. The September meeting would be held in Darlington and if it was not possible to hold the November meeting at 10 Clyde Place, SLC colleagues would if possible arrange a site visit.

7. Strategic items

7.1 CFO Report

MMC joined the meeting.

AMC introduced the CFO Report noting that SLC had started the year with a budget pressure of £0.7m on Admin, £8.6m on Programme and a surplus on Capital of £12.9m. Cost pressures of around £12m had already been absorbed to get to that position. There were subsequently further emerging risks on projects already in delivery, which were outlined in the paper.

The SLC pay case, submitted at the end of May would be affordable across the three year implementation period, however, DfE had now confirmed that there would be no additional funding available to support the smoothing of the impact across financial years. SLC had already included the impact of year one of the pay case in the 2023-24 budget and so this would mean that the additional element of year two of the pay case would need to be funded from the baseline funding for financial year 2024-25.

As highlighted, these pressures would be managed through initiatives identified from both Project Catalyst and the transformation work led by Proteus looking at the end-to-end Change process. Project Catalyst had identified over 80 cost-saving ideas, and these had been reviewed and synthesised into initiatives to verify potential savings. Of the 80, 29 had progressed to Gateway 2 savings which had been validated by SLC subject matter experts. These early and indicative estimates suggested that the 29 initiatives had the potential to save over £30m over a three year period, with most of the potential savings expected in the final year. Phase 2 would convert these Gateway stage 2 projects into detailed business cases for approval by ELT.

This complex in-year financial position was challenging and would require stringent management to ensure SLC stayed within control totals and tolerances. In parallel, there was a need to build sustainable budgets for years two and three of the pay case which would also form a crucial part of the forthcoming Comprehensive Spending Review (CSR) 2025 planning. Therefore, the finance challenge meetings introduced last year would continue, incorporating financial risks input from the planned transformation programme board.

In this context, the Cabinet Office announcement on 2 June that all public sector employees below the grade of Senior Civil Servant should receive a non-consolidated payment of £1,500 but that no additional funding would be provided, had added to the challenging financial position already being managed. The impact for SLC was a further additional pressure of around £5.6m.

Non-Consolidated Payment

Speaking on behalf of the ELT, CL recognised that it was right to make the £1,500 payment. There had however been difficult decisions made around which projects would be paused to fund the payment, and there would be subsequent consequences. SLC had gone through a robust reprioritisation process to review again the Change priorities for the year to identify savings that could fund this payment. All projects, both approved and in the pipeline, had been part of this process, and no new bids for pipeline funding would be accepted at this stage. Shareholders were informed of the review at the Joint Quadrilateral Committee on 15 June.

CL noted that of the shortlist of 12 potential projects that were identified from which to achieve the savings, seven were left. Projects including LLE, DSA and GDPR had been ruled out of the review at the early stages based on their strategic importance, including that they were publicly stated government commitments or legal requirements. The ELT were planning to pause five of the projects and were actively discussing the remaining two with shareholders.

AH highlighted that, in the wider DfE context, every Department had been put in the same position as SLC to find the funding to make the £1,500 payment.

CM asked whether the information in the paper meant that the projects being paused would save more money than was required to make the non-consolidated salary payments. AMC confirmed that all of the money was required, with some of it being used to bring projects to a safe stop. AMC went on to note that ongoing, detailed budget reviews would continue.

RR asked whether the pausing of would impact the customer experience and potentially increase costs for next year. ST noted that it would be important as well to account for the future costs of LLE. CM noted that there would continue to be pressures on the budget but that she had confidence in the team to take appropriate action. AW explained that this was a high level, long term piece of work and that looking at savings had been productive.

PL noted that an update at the July Board meeting on the early work being undertaken on Catalyst and Proteus in terms of potential future savings would be useful.

ACTION: Update at the July Board meeting on the early work being undertaken on Catalyst and Proteus in terms of potential future savings.

PL welcomed the intention to begin work on the 2025 CSR in advance of the expected Government-wide timetable and in view of the pressures and prioritisation challenges that SLC would have to manage. This would in effect mean beginning preparation of a zero-based budget process for 2024-25 which would then provide a basis for the subsequent Government-wide CSR. PL proposed that the Board should plan a strategy day in the autumn to bring together this work.

ACTION: Consider and propose the approach for Board strategy session later in 2023.

AMC noted that the potential savings from Catalyst were only from the projects that had reached the Gateway 2 stage. DB highlighted that the focus of Catalyst would be to make the business more efficient and noted that Proteus would need investment.

The Board took assurance from the CFO Report and endorsed the Non-Consolidated Payment approach.

MMC left the meeting.

7.2 Draft ARA Foreword

PL introduced the draft ARA forewords noting that the ARA would come to the Board for approval at the meeting on 7 July.

The Board noted the draft ARA forewords and provided suggestions for edits which would be considered as drafts were finalised for the 7 July meeting.

8. Reports from Committees

8.1 ARC Update

CM introduced the ARC Update noting that the Committee had reviewed and approved the ARA subject to minor edits.

CM highlighted the annual internal audit on the application processing error rate. The error rate had increased since the previous year and so there had been a thorough discussion at ARC around the need to minimise errors and the possible causes. ARC had been assured that there was a robust process in place to review and address errors.

The Board took assurance from the ARC Update and approved the Risk Management Strategy.

8.2 RemCo Update

AW introduced the RemCo Update noting that at the 31 May meeting they had discussed the SLC Pay Case and that members had also attended a separate pay workshop.

AW confirmed that succession planning is discussed annually at RemCo.

The Board took assurance from the RemCo Update and approved the RemCo Annual Report and RemCo ToR.

8.3 TEOC Update

ST introduced the TEOC Update noting that the meeting had just taken place the previous Monday. At the meeting there had been discussion around cashable benefits and lifecycle costs, enabling Opex, assurance of the level of engagement in Proteus, and a better understanding of investment priorities. JD had provided the Committee with assurance on the overall programme delivery of the Technology Strategy.

ST noted that there had been a helpful slide in the TEOC meeting pack on the achievements of the technology strategy in terms of lost hours that could be shared with the Board for information.

ACTION: Achievements of the technology strategy slide from the June TEOC to be made available on iBabs.

The Board took assurance from the TEOC Update.

9. Directors’ Reports

9.1 Move to 10 Clyde Place

MC joined the meeting.

MC introduced the Move to 10 Clyde Place noting that although the intention was to hold the November Board meeting in the new building, he was unable to confirm this yet.

MCC noted that the move to the new building may be an opportunity for a cultural reset and modernisation of SLC. GP also highlighted the environmental benefits of the move. TT noted that the new building would be a great place to work and could be used in the strategy for colleague recruitment and retention. DW explained that the SLC Communications team were already working on themes for the new building and that more would be done on the link with Employer of Choice and the intention to reinforce a culture of collaboration and team work.

LMC left the meeting.

The Board noted the Move to 10 Clyde Place and took assurance that the plans were robust and well-developed.

MC left the meeting.

9.2 Bothwell Street Exit

AM joined the meeting.

JD introduced the paper on the Bothwell Street data centre exit noting his confidence in the ability of AM and his team. The work was complex and difficult, but the programme had detailed delivery plans which were on track and which would be a significant step forward for SLC.

AM explained that the data centre would exit Bothwell Street before the end of the year and that the new centre was progressing well. Whilst the complexity of the programme meant that it would never be declared risk free, there were active mitigations in place.

RR asked about the risk of a loss of production services. AM noted that there would be a third party organisation on site to provide technology expertise and that they were doubling up on connectivity links, amongst other planned mitigations.

CL noted that although the move to the new building was a massive step forward for SLC it should be remembered that over 2,000 colleagues in Darlington and Llandudno would not be part of the move.

CL lauded the good work from MC and AM on what had been challenging and complex projects.

The Board noted the paper on the Bothwell Street data centre exit and took assurance from the detailed planning that had been carried and risk mitigation that had been presented.

AM left the meeting.

10. Change Update

AMCC joined the meeting.

DB introduced the Change Update noting that some of the financial aspects of the transformation programme had already been discussed in the meeting today, but that resourcing would also become a critical debate. The achievements of the programme had been notable and had been delivered despite the challenging environment. DB opined that the programme was in a good place and that as well as discussing it with AH, there had been a positive discussion at TEOC. There would be further discussion at the 11 July deep dive meeting of the Board.

DB highlighted that the challenge of concurrent change was significant and even more so with a background of the scale of capacity and the funding gap. There would be a need for a reset in SLC strategy with the overarching theme being doing less better.

PL noted that he and the Board had been impressed by the Change presentation to the Board that had taken place before the meeting today.

CM noted that more information on the breakdown of the reported £145m of realised benefits would be useful.

ACTION: More clarity on the impact of the £145m benefits being delivered as noted in the 7 July Board Change paper to be made available.

TT noted that there were over 100 SLC products and DB confirmed that this was a major cost and complexity for SLC as programmes had a long life with the long repayment periods. CL explained that further work that had been done on economic analysis would be shared at the main July Board meeting. AH highlighted that it was difficult to make progress on policy simplification because of the number of factors to take into account in terms of eligibility for loans; but some important simplifications would follow as LLE was developed.

AMCC explained that the projects yet to be started had a nominal amount of budget assigned to them and that not all of them would need to be started at once. The ELT were keeping a close eye on projects yet to start and were also planning to streamline and governance and make it more rigorous and more efficient.

The Board noted the Change Update.

AMCC left the meeting.

10.1 Repayments Report

PMC and KOC joined the meeting.

DB introduced the Repayments Report.

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PMC underlined the success in increasing the verified customer rates, which would result in an improved rate of loan repayment, a clear benefit to taxpayers. The data was being used to help understand how to make further improvements, and the gap was being closed all the time.

PL noted that student funding repayments would be an important part of the CSR and that the March 2023 leaning-in session with the Repayments department had been impressive and helpful.

The Board noted the Repayments Report.

PMC and KOC left the meeting.

11. Governance

11.1 Minutes of meeting held on 1 December

The minutes of the SLC Board meeting held on 27 April 2023 were approved as a true and accurate record.

11.2 Matters arising from previous meetings

The matters arising document was approved as accurate.

12. Any other business

PL noted that AH would be moving to a new role within DfE and thanked her for her valuable contribution to SLC. She had epitomised the role of a critical friend and helped to establish a ‘one team’ approach between SLC and all parts of DfE. Her constructive approach had helped to make the SLC more effective and improve our value for money.

12.1 Date of Next Meeting

The next meeting was confirmed as being at 10.00 am on Friday 7 July 2023 by Teams with Executive hosting from the Glasgow Boardroom.

There being no other business the meeting ended at 1.35 pm.