To review proposals that the council act as the accountable body for the new Hereford University, NMiTE (new model in technology & engineering), during its establishment phase.

The Committee was asked to review proposals that the council act as the accountable body for the new Hereford University NMiTE (new model in technology & engineering), during its establishment phase.

The Chairman welcomed the following representatives from NMiTE:  Professor Janusz Kozinski, President and Chief Executive Officer; David Sheppard, Interim Chief Operating Officer; NMiTE, David Nolan, Interim Finance Director, NMiTE; and Jon Gorringe, Finance Advisor to NMiTE, ex Director of Finance, Edinburgh University.

The Chief Finance Officer (CFO) gave a presentation as appended to these minutes.  This replaced that published at appendix 3 to the report.  Mr Sheppard outlined the Department for Education funding assurance programme setting out the basis on which grant payments would be paid, the timing of payments, the internal processes in place to ensure that the business plan was delivered, the control structures and the audit framework.

In discussion the following principal points were made:

·        However beneficial the proposed University might be, the proposal that the council act as accountable body posed a potential financial and reputational risk to the Council.  Accordingly, it was suggested that if the council agreed to act as the accountable body the council itself should establish its own robust and appropriate governance framework to supervise the discharge of this role.  The Council might decide that it wished to carry out this role itself or delegate that responsibility to a committee or sub-committee.  If Council did decide to delegate that responsibility it was requested that in making such a delegation there was clarity as to the role of the body to whom responsibility had been delegated.  This should include, for example, what reports it would be expected to receive, and the level of input that could be expected from the council’s external auditors, so that appropriate resources could be allocated to enable the delegated role to be discharged.  It was noted that the cost of this monitoring work would be chargeable to NMiTE. 

·        During the points on behalf of NMiTE it was noted that they wish to avoid duplication and cost.  NMiTE has established its own audit framework upon which the council could draw.  However, members considered it essential that the council had its own independent assurance framework process in place.

·        The cabinet member – finance, housing and corporate services suggested the closest parallel would perhaps be the role delegated to the Audit and Governance Committee in relation to review and monitoring of the waste contract.

·        It was confirmed that accountable body status only applied to the grant funding stream.  Private funding that NMiTE had to secure, and obtaining this was one of the milestones, would be managed directly by NMiTE.

·        The Chief Finance Officer commented that if milestones were not being met discussions would be held with NMiTE in the first instance and if matters could not be resolved a report would have to be made to the Department for Education (DfE) for advice on the next steps.  He also commented that the council would be represented on the project advisory board and that the council would be able to review monthly audit reports that the NMiTE Board prepared for the Department for Educataion (DfE) so there would be complete transparency.

·        It was recognised that this was a complex project and noted that if significant difficulties did arise it tended to be the DfE’s practice to put one higher education institution in the care of another higher education institution.  NMiTE already had a close partnership with Warwick University.  The Council would not be involved.

·        In reply to a question on the potential for the council to be left out of pocket in certain circumstances Mr Nolan indicated that he considered paragraph 23 of the report containing this reference to be incorrect.  Members requested that Cabinet, the report to which contained the same paragraph, should be updated as appropriate.

In conclusion Professor Kozinski welcomed the debate that had taken place.  He acknowledged the points raised by the Committee.  However, he stated that he believed that the project would be a source of pride and great benefit to the County and that the NMiTE organisation had the expertise available to it to deliver it.

Members indicated that subject to the development of a robust and appropriate governance framework and assurance that there would be no cost to the council they would support the council acting as the accountable body.

RESOLVED:

That      (a)     Council be recommended to put in place a robust and appropriate governance framework to supervise the discharge of its responsibility as the accountable body itself, or delegate this role to a Committee/Sub-Committee providing sufficient detail on the mechanism by which this role is to be discharged is provided to any such body to enable it to fulfil its role;

              (b)     the wording of paragraph 23 in the report to the Committee mirrored at paragraph 23 of the report to Cabinet on 14 December 2017 in relation to risk management be reviewed and amended as appropriate; and

              (c)     subject to the above, Cabinet be advised that the Committee supports the proposal that the council acts as accountable body for public funding to support establishment of a new university in Hereford, provided assurances are given that no costs will be incurred by the Council.