¹û¶³Ó°Ôº

The Chair welcomed members to the meeting of the University Court. Particular welcome was extended to Silvia Cardinale, recently elected President (Student Activities) and to Chris Reilly, Interim Director of Finance.

Apologies were noted as having been received from Professor Richard Butt, Karen Cullen, Dr Arturo Langa, and Elizabeth Porter.

Andrew Watson declared that he had a previous working relationship with the company identified within Paper Court (24) 17 as being recommended for the provision of specialist expertise in the matter of loan refinancing. That relationship had ceased a number of years ago, but was noted by the Court under this item. There were no other conflicts of interest declared.

There was no Other Competent Business identified.

4.1 Minutes of the previous meeting

The unconfirmed minutes of the meeting of the University Court held on 17 April 2024 (paper Court (24) MINS 02) were APPROVED as an accurate record subject to the correction of minor typographical errors advised by the Secretary.

4.2 Matters arising

There were no matters arising from the minutes.

The Chair reported on her regular engagement with the University senior leadership, with members of the University community, and with wider stakeholders. As part of that engagement, she would be attending the meeting of the University Senate being held on 26 June 2024, having accepted the open invitation to Court members to attend as an observer. She looked forward to the graduation ceremonies on 1 and 2 July 2024, and encouraged members unable to take up this invitation to do so in future.

Further updates were provided as follows:

Risk Register: The Chair had attended the recent development session organised by the University’s internal auditors on behalf of the Audit and Risk Committee. The session had been designed to allow members to revisit and, as appropriate, re-develop the current risk register, and to revisit the institutional risk appetite more broadly. As an outcome, the Senior Leadership Team would work to consolidate the multiple risks identified currently within the register, in order to strengthen strategic focus and oversight. An updated register would be presented for approval to future meetings of the Audit and Risk Committee and the Court.

GIVE Scheme: There had been a very encouraging response to the recently launched Governor Investment Scheme (GIVE). The closing date for this first launch of the scheme was 1 July 2024, following which the Nominations Committee would review applications and arrange to meet with candidates. At this stage, eleven applications had been received, a couple of which suggested that the applicants, on the basis of their experience and expertise, could be eligible for consideration under the lay member recruitment arrangements. The Chair extended her thanks to the Secretary, and to the Alumni and Development Team and to other colleagues involved in promoting the Scheme.

PRINCIPAL’S REPORT

Court RECEIVED a detailed written report from the Principal and Vice-Chancellor (paper Court (24) 13). In speaking to his report, the Principal highlighted the following matters in particular:

6.1 SFC Final Funding Allocation

The operating environment remained essentially unchanged from the Principal’s most recent formal report to Court in April 2024, and as described in his briefing to Court, circulated to members in May 2024.

The SFC had published its Final University Funding Allocations for 2024-25 on 30 May 2024. ¹û¶³Ó°Ôºâ€™s resources for teaching had been cut by just under 4%, made up of a reduction in the main teaching grant, and the removal entirely (in line with the other modern universities) of the contribution to the Scottish Salaried Teachers Pension Scheme, and (in line with all universities) the Upskilling Fund.

Research and KE Funding had increased. However, the overall position was a further reduction in the overall funding position, as set out in more detail in the written report.

Universities Scotland continued to make representations to the Scottish Funding Council, lobbying for the reinstatement of the Upskilling Fund and increased transparency around the processes for agreeing funding and allocation of funded places. In a recent statement, Universities Scotland had highlighted to the Parliament the impact of decade-long under-investment on universities’ contribution to Scotland and the anticipated challenges, if the current path were to continue.

6.2 Scottish Funding Council Outcomes Framework and Assurance Model

The SFC had published its revised Outcomes Framework and Assurance Model on 6 June 2024, setting out the expectations of colleges and universities in return for the funding they receive. The new approach had been developed in response to recommendations from the SFC’s national review of tertiary education and research and would sit alongside the refreshed Scottish Tertiary Quality Enhancement Framework (TQEF).

Court and Senate would receive a detailed report at their first meetings of the next academic session on the implications of the revised arrangements. At this stage, members were asked to note that the revised approach would replace the current assurance and accountability arrangements (including Outcome Agreements). The SFC’s expectations of colleges and universities were set out in the Outcomes Framework. There were no specified targets each institution. Instead, outcomes were suggested as being ‘expressed more generally across the broad range of areas that matter to students, employers, the Scottish Government and other key stakeholders.’ The Assurance Model set out the mechanisms by which SFC would engage with colleges and universities and monitor their delivery of the outcomes.

Prior to full implementation of the Outcomes Framework and Assurance Model, a Self-Evaluation of the 2023-24 Outcome Agreement was required by 2 December 2024, as well as two case studies covering outcomes for students and for economic transformation and social renewal.

6.3 Scottish Government reform agenda

The Principal reported that he was representing Universities Scotland on the Education and Skills Reform Ministerial Group, which was chaired by Jenny Gilruth, Cabinet Secretary for Education and Skills. The first meeting of the Group had focused on providing a high-level overview of the overall reform programme, as well as more specific detail on the Independent Review of Qualifications and Assessment. The Principal would keep members updated on developments arising from the reform agenda and the implications for ¹û¶³Ó°Ôº.

6.4 Commissioner for Fair Access

In recent meetings with Universities Scotland representatives, Professor John McKendrick, the Commissioner for Fair Access, had reported that he believed the sector would not meet the 2026 interim target for the percentage of SIMD entrants to Higher Education, nor indeed, the 2030 target. Universities Scotland’s Admissions Policy Group would be considering the Commissioner’s report and any response from the Scottish Government at its next meeting.

The Principal had attended a roundtable on widening participation on the morning of 19 June 2024. At the meeting, members had shared ideas for initiatives, but these were disappointingly constrained by institutional and sector resource considerations.

6.5 40 Faces Universities Scotland had launched its 40 Faces campaign in April 2024. The aim of the campaign was to celebrate the sector’s existing progress toward the 2030 access targets, and the success of the individuals behind those statistics, but also to highlight concern that progress was slowing and to raise awareness of the reasons for that.

6.6 Public Bodies’ Climate change duties reporting

The annual summary analysis of public bodies’ progress towards net zero and effective adaptation action had been published on the Sustainable Scotland Network (SSN) website. The analysis showed good progress in some areas and sectors, whilst also identifying areas for attention over the coming years. In particular, the report highlighted areas that required strengthening across the public sector in relation to reporting on climate risk assessment and adaptation action. As Court members were aware, the University was actively engaged with this agenda through its Net Zero Strategy.

6.7 Student recruitment and student numbers 2024-25

The Principal provided an update on student recruitment for 2024-25. Undergraduate recruitment was progressing well, and it was expected that intake targets would be met. At this stage in the cycle, undergraduate RUK targets were on track and international targets had been exceeded. Many programmes remained open for late applications, with Clearing launching on 5 July 2024. Plans were in place to stretch offers and adopt flexible entry wherever possible to mitigate shortfall against SFC funded places, and in so doing avoid any subsequent withdrawal of places.

The Principal had reported previously on enhancements arising from the new conversion management tool ‘Gecko’.

He was pleased to report a significant increase in attendance at campus offer holder days and good uptake of campus tours and other specific sessions for applicants and

new students. Thanks were extended to colleagues involved in the recruitment and admission processes for their significant and successful efforts against a challenging context.

At postgraduate level, most applications remained open for September 2024 entry. At this stage in the cycle, Home (UK and ROI) postgraduate applications and offers were up on last year, although firm acceptances were down slightly, by 3.1%.

As reported previously the curtailment of the dependants’ visa, increased visa and health charges, and other factors had contributed to a reduction in the level of postgraduate international applications and acceptances this year. More positively, the Migration Advisory Committee (MAC) had published its Report on the Graduate Route on 14 May 2024. The MAC had found no evidence of widespread abuse and recommended retaining the Graduate Route in its current form. It also recommended more robust data collection and mandatory regulation of agents. These findings had been welcomed by the sector, and it was hoped there would be a positive impact on international student recruitment.

Having noted the updates on recruitment and widening access detailed above, members were interested to learn more about student retention and support initiatives, noting particularly the particular pressures experienced by students arising from COVID and the cost-of-living crisis.

In response, the Secretary provided an overview of the structures and arrangements in place to monitor student engagement and achievement and to support student persistence.

Efforts in this area required a whole institutional approach, and key elements of the approach were made visible to the Court through the University’s Outcome Agreement with the SFC, and in the minutes of the Senate. At an institutional level, oversight of widening participation and retention activity fell within the remit of the Widening Participation and Student Retention (WISeR) Board, which was convened by the Vice-Principal & University Secretary. Reporting into the Student Experience Committee, the Board had a remit to support and enhance widening participation and retention, taking an evidence-based approach to develop initiatives, strategies, policies, and procedures. The work was supported by monies allocated by the SFC through its Widening Access and Retention Funding (WARF). Within the Schools and Divisions, retention rates were considered through the Annual Monitoring process, leading to local and targeted interventions.

In common with other HEIs, ¹û¶³Ó°Ôº had experienced a significant increase in demand for mental health and wellbeing services in recent years. There was also growing pressure on other services, including student funding. Notably, there had been an associated increase in claims for extenuating circumstances and in student appeals. Whilst resources were limited, and public funding had been cut, the University continued to be able to offer counselling and wider mental health services without lengthy waiting times, having invested in staff resource for these critical support functions.

Beyond the support from the core Student Services Team, academic and professional services colleagues played an important pastoral role in the student experience. In particular, the Personal Academic Tutor System, which had been reviewed recently under the auspices of the Student Experience Committee (SEC), supported student wellbeing and retention. Other recent SEC projects with potential to impact positively on

retention included the reviews of the Extenuating Circumstances Policy and Assessment Regulations to provide more flexibility, without compromising the maintenance of academic standards.

The Chair thanked the Secretary for the comprehensive overview, noting the extensive ongoing work to respond to these very challenging circumstances.

6.8 Voluntary Exit Scheme

The Voluntary Exit Scheme had closed, resulting in a saving of £370,000 in the 2024-25 staff budget, with recurrent savings in the years to follow. The financial impact was set out more fully in the financial papers provided separately on the Court agenda.

6.9 Appointment of Interim Director of Finance

The Principal was pleased to welcome Chris Reilly as Interim Director of Finance. Key objectives during his period of tenure included the successful implementation of Galileo, refinancing of the Barclays loan, statutory accounts for 2023-24, and the stabilisation of the finance department, during a period of significant change.

6.10 Overseas engagements

The Principal reported that he had recently returned from a productive visit to ¹û¶³Ó°Ôºâ€™s partner institution in Nepal., Silver Mountain. During the visit, he had presented awards at the graduation ceremony, met with agents, and discussed with the leadership team at Silver Mountain the plans to increase their student numbers with ¹û¶³Ó°Ôº.

6.11 Festival of Learning

The most recent ¹û¶³Ó°Ôº Festival of Learning had focused on the theme of belonging, featuring presentations and workshops from staff and students on how students’ sense of being valued, respected, supported, and included are central to their sense of belonging to the University’s learning community. The Principal extended his thanks to colleagues involved in the organisation and delivery of the Festival.

6.12 Graduation

The Principal looked forward to welcoming Court members to the graduation ceremonies on 1 and 2 July 2024. Members were reminded that Dame Prue Leith would be stepping down as Chancellor of the University at the end of this calendar year, having served with distinction during her six-year tenure. As such, the 2024 graduation ceremonies would be the final ceremonies over which Dame Prue would preside as Chancellor.

The Principal closed his report by putting on record his thanks to colleagues for their continuing dedication and hard work, to students and student representatives for their commitment and leadership, and to Court members for all their support and encouragement.

The Principal provided context to Paper (24) 14, and in particular its appendix, which provide a planning timeline in graphic form which incorporated a number of milestones over the following nine months for the reporting and delivery of key financial and

organisational change activities discussed at the Court Strategy Day. The paper provided a brief update also on project EVOLVE, with others matters of importance arising from the Court Strategy Day being advised as having been addressed elsewhere on the meeting agenda. Papers COURT (24) 15-18 referred, along with the notes of the Strategy Day circulated separately under Agenda Item 20, Items for Information.

7.1 Project EVOLVE

The Principal reminded members that Project EVOLVE was the title of the overarching project for change management, incorporating several connected workstreams, including Project Galileo (the implementation of a new financial system) and a Target Operating Model (TOM), which was being progressed in partnership with SUMS. The overarching project aim was to enhance the effectiveness and efficiency of aspects of the University delivery, taking into consideration the changing context of HE, the rapid and ongoing evolution of technology, and the development of the University’s portfolio. Improved effectiveness and efficiency would, in turn, help to address financial challenges, underpinning a move to a recurring surplus budget position, and securing long-term financial sustainability.

Phase one of the TOM work (the ‘As Is’ phase) had been completed, including a first iteration of an activity-based costing model. A TRAC return had been completed as part of this phase, offering helpful benchmarking data. The second ‘To Be’ phase would take place over the summer period, with a prioritised implementation plan in place towards the end of October 2024. The project would likely extend over a 2-3 year period, but would influence the shape and delivery of aspects of the university over the next 10 years.

The Chief Operations Officer had been appointed as the Project Sponsor for EVOLVE, and the Senior Leadership Team would act as the Programme Board. Academic and professional services colleagues would be fully engaged in the workstreams, and more broadly, to co-create the new operating model. The Principal and SLT were acutely aware of the need for effective change management and careful coordination when delivering a project on this scale, taking into consideration sensitivities around roles and the redesign of services and functions. As such, there would be regular communications and opportunities for staff to discuss and inform developments.

7.2 Timeline

The timeline presented was designed to provide Court members with an easy-to-use graphic reference of milestones against which the Senior Leadership Team would report, and through which the Court could monitor progress during the critical period ahead.

Members welcomed the timeline as a useful reference and guide to the key milestones within the change management process. It was noted that there was a significant programme of work to be undertaken between July and September 2024, and that written updates would be provided during this period. Whilst the change management programme was extensive, the Court expressed confidence in the timeline and process. Members looked forward to future updates on progress.

COURT RECEIVED a paper and presentation on the budget and outturn forecast for the financial year 2023-24 (paper Court (24)15).

The Interim Director of Finance reminded members that the original budget for the financial year 2023-24 had been a deficit of £1.1m. The latest forecast was for a breakeven point position, subject to a further stretch savings target of £0.1m by year end. Key movements driving the improvement from the deficit position related to tuition fees, staff costs, long term maintenance, cost savings and SFC grants, as set out in more detail in the paper and presentation.

Whilst welcoming this positive update, members sought clarification on the factors leading to the discrepancy. In response, the Interim Director of Finance explained the £1.1m forecast deficit had arisen partly due to conservative forecasting, but also some errors in the original budget related to a miscalculation in tuition fees and incorrect inclusion of the long-term maintenance budget in the revenue budget. Members were advised also that it was possible that some of the current assumptions around capitalization of cloud based elements of the Galileo project might need to be revisited.

The Finance and Estates Convener reported that FEC had carefully considered the revised approach to presenting the budget, noting improved clarity and robustness. It was advised further to Court that improved reporting on maintenance costs via the FEC would provide greater assurance of accuracy on income and expenditure associated with the estate.

Court members endorsed the positive feedback from FEC. As an enhancement for future reports, it was requested that the cash position be added, including more explicit articulation of the below the line costs.

Court RECEIVED a paper and presentation on the budget for the financial year 2024-25 and the financial forecast for subsequent years for APPROVAL and submission to the Scottish Funding Council (paper Court (24) 16).

The Interim Director of Finance delivered a presentation covering the following:

· The wider environment (backdrop of economic pressure), including consideration of the public funding situation in Scotland; the challenges detailed in the recent Office for Students Report on Financial Sustainability of HE Providers in England; and ¹û¶³Ó°Ôº-specific contextual information (recent TRAC return).

· The 2024-25 Capital Plan split between specific projects (£4.6m) and long-term maintenance (£1.1m). Spend had been included for projects such as EVOLVE but with no financial benefits factored in, as these still had to be quantified.

· The final version of the 2024-25 budget showing a projected £500k deficit. Originally, a breakeven budget had been put forward, but this had been revised downwards on the advice of the FEC due to concerns about projected student numbers and tuition fees income.

· Factors influencing the move to the £500k deficit (bridge to budget), covering the following: SFC grants; research income; staff costs; tuition fees; HEP and TNE; and vacancy management.

· Projected student numbers and tuition fees.

· The 2024-25 cash position, showing a projected cash increase of £5.1m with an assumed £3.9 additional borrowing (subject to change).

· The three-year plan up to end of financial year 2026-27 prepared on a top-down basis, detailing income, cost, and capital assumptions.

· Risks presented under the following headings: student numbers; operating costs; staff numbers; loan refinancing; and reducing research income.

· Opportunities presented under the following headings: Project Galileo; financial reporting; income diversification; capital investment; and University efficiencies.

· Considerations for the Senior Leadership Team related to income, expenditure, and prioritisation.

The Chair thanked the Interim Director for the comprehensive and balanced overview.

Members sought clarification on the rationale for the projected £1.3m spend for EVOLVE and whether there might be scope to add an associated income forecast. The Principal advised that £1.3m was the best estimate at this stage of the longitudinal project plan. He reiterated to members that EVOLVE was driven primarily by a change management agenda, but that it was expected that benefits derived from the separate workstreams would include income generation and cost reduction/avoidance. Further, the longitudinal nature of the project (over three to five years) meant that it would be preferable to wait for the sequencing of projects to be determined and preparation of discrete business cases before adding any forecasts. Despite these reservations, there may be scope to include some cautious projections as the project moved forward, however.

Having carefully considered the detail of the budget and three-financial plan, Court APPROVED the submission of the proposals to the Scottish Funding Council by the June 2024 deadline.

Court RECEIVED a report on loan refinancing discussions, and on the

preparation of a five-year financial forecast (paper Court (24) 17). Members were reminded that Andrew Watson had declared an interest under this item (minute 2 refers).

As set out in the paper, ¹û¶³Ó°Ôºâ€™s loan with Barclays Bank with a current balance of £16.1 million would mature in December 2024 and therefore required refinancing. The original loan had been acquired to facilitate the University’s move to the Musselburgh campus in 2007. Since the current loan was financed, interest rates had increased and there would likely be a considerable increase in the interest rate required to refinance the loan once completed. At the same time, there was increasing nervousness in the higher education sector about a number of universities having overextended themselves financially, with large capital expenditure on their estates and over leveraging financially.

Members were advised that a specialist skill base was necessary to negotiate loans of this magnitude. Specialist expertise would also help to evaluate what sort of loan would be beneficial (Term, Revolver, or a combination of both).

The Finance and Estates Committee had considered potential loan advisers at the meeting on 6 June 2024 (Paper FEC 24 (MINS) 04) and put forward a recommendation to the Court for the appointment of QMPH to this role.

Court APPROVED this recommendation and also the request for delegated authority to be provided to the Chair of Court and to the Conveners of the Finance and Estates and Audit and Risk Committees to discuss, review and approve the preferred bidder and loan finance arrangements. This was necessary due to the tight timeline for negotiation and completing the loan documentation. Documentation would be brought to the October meeting of the Court.

Responding to a specific question about ethical issues, the Principal confirmed that the University’ ethical investment policy would guide decisions around the preferred lender, but the university had to be mindful too of its charitable and fiduciary duty. It was important to note that the university was seeking to borrow funds from, rather than to invest in a lender.

Court RECEIVED a status report on progress with the implementation of the new finance system (paper Court (24) 18).

As set out in the paper, the implementation date for Galileo had been moved from Period 11 or Period 12 in financial year 2023-24 to the start of Period 5 of financial year 2024-25, with a ‘go live’ date of 2 December 2024. The adjusted ‘go live’ date had been considered previously at the meeting of the Audit and Risk Committee on 5 June 2024, and the meeting of the Finance and Estates Committee on 6 June 2024 (papers Audit (24) Mins 02 and FEC (24) Mins 04 refer). ARC and FEC members had been supportive of the revised timeline, which would significantly derisk the project by extending the testing period, allowing for a full health check and review of decisions taken thus far. The Interim Director of Finance advised that the expected additional cost was around £400k, but that there may be potential to offset some of this this overspend.

Court RECEIVED an update on progress with the Land Development Project (paper Court (24) 19).

The Hub development was four months into its construction programme of 18 months and remained on schedule for completion in August 2025. A risk review workshop, scheduled for June 2024, was expected to confirm that the final costs of the development were projected to be below budget. In anticipation of this a proposal had been put to the City Deal Project Management Office, and agreement in principle reached, that any surplus from the construction budget be used to support the operational costs of the Hub Development.

The Joint Venture had reviewed and approved the format of proposed Income and Expenditure reports, with initial estimates confirming that the Hub would return a surplus. Following approval of the updated Income and Expenditure, it was planned to progress with the recruitment of the Hub Director who would be a direct employee of the Joint Venture.

Discussions were ongoing with the local authority planning department in advance of making a submission to the updated Local Development Plan to ensure congruence with ¹û¶³Ó°Ôº areas of expertise and aspirations. The Dean of Health Sciences and Principal

reported that they had met recently with the NHS Lothian Chief Executive to discuss potential joint developments.

Lay member Steven Hendry had offered to support the Joint Venture in considering the opportunities presented by the wider Edinburgh Park Development. Together with colleagues from CBRE, Steven would work with the Joint Venture to review and validate the general proposals for Edinburgh Innovation Park. This would include giving consideration to the options and routes to take the Park to the market at the appropriate time. The Principal extended thanks to Steven for his support and expert contribution.

Court RECEIVED the annual report on HR matters (paper Court (24) 20).

Thanks were extended to the Head of HR for the comprehensive review of matters arising during 2023-24.

Court NOTED a report on the following areas of compliance activity from 1 April 2024 to 30 June 2024 (paper Court (24) 21):

1. Complaints.

2. Requests made under the Data Protection Act 2018.

3. Requests made under the Environmental Information (Scotland) Regulations 2004.

4. Requests made under the Freedom of Information (Scotland) Act 2002.

5. Activity related to the Counter-Terrorism & Security Act 2015.

Thanks were extended to the Policy Adviser (Governance and Compliance) for his work on the paper.

15.1 Minutes of 1 May 2024

Court RECEIVED the minutes of an Extraordinary meeting of the Finance and Estates Committee held on 1 May 2024 (paper FEC (24) MINS 03).

Matters arising: Future Spaces (minute 2 refers)

Court HOMOLOGATED Convener’s Action taken to APPROVE contractual arrangements and associated expenditure in the matter of Future Spaces, such authority having been delegated by the University Court at its meeting on 17 April 2024 (minute 11.2 refers).

15.2 Minutes of 6 June 2024

Court RECEIVED the minutes of the Finance and Estates Committee held on 6 June 2024 (paper FEC (24) MINS 04). Matters arising were covered elsewhere on the agenda.

Court RECEIVED the unconfirmed minutes of the meeting of the Senate held on 8 May 2024 (paper SEN (24) MINS 02). There were no specific items brought to members’ attention.

COURT RECEIVED the unconfirmed minutes of the meeting of the Audit and Risk Committee held on 5 June 2024 (paper ARC (24) MINS 02). Matters arising were covered elsewhere on the agenda.

18.1 Meeting held on 4 March 2024

COURT RECEIVED the confirmed minutes of the meeting of the Equality and Diversity Committee held on 4 March 2024 (Paper EDC (24) MINS 01). There were no specific items brought to members’ attention.

18.2 Meeting held on 4 June 2024

COURT RECEIVED the unconfirmed minutes of the meeting of the Equality and Diversity Committee held on 4 June 2024 (Paper EDC (24) MINS 02). There were no specific items brought to members’ attention.

The University Court would meet as follows in Academic Session 2024-25:

Wednesday, 2 October 2024 at 3.00 pm in the Boardroom

Wednesday, 18 December 2024 at 3.00 pm in the Boardroom

Wednesday, 19 February 2025 at 3.00 pm in the Boardroom

Wednesday, 16 April 2025 – Strategy Day – all day event

Wednesday, 18 June 2025 at 3.00 pm in the Boardroom

20.1 Notes of the presentations and discussion held at the Court Strategy Day, 17 April 2024.

Progress on actions identified at the Strategy Day had been addressed by the Principal under agenda item 7 and would be reported at future meetings of the University Court.

20.2 Link to Court Member Information Repository, including past papers.

Members were reminded of the link to the Information Repository