AT A MEETING of the FINANCE & GENERAL PURPOSES COMMITTEE held in the College on TUESDAY 29 JUNE 2010 at 5.30 pm. Present P FISK in the Chair A Armstrong N Baldry A Isherwood and J G Moorley. Apologies for absence were received from C Middlemass and A Townsend. Also in Attendance L Oliver (Clerk) N Davison and S Ruddock (Directorate) and L Heighton (Finance Manager). 1
Declarations of Interest There were no Declarations of Interest made prior to the consideration of business.
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Capital Funding for the Nursery The Committee considered a report on the situation regarding the capital build project for the Nursery. As the current Nursery was not fit for purpose an application was made for funding from Sure Start for refurbishing the building at a provisional cost of £150k including fees and VAT. A grant of £97k had been finalised in May with College cash input of £53k. It had become clear however that three load bearing internal walls were unsafe and the total cost of the scheme had risen to £233k including fees and VAT with the Sure Start grant remaining at the original level. The College could however fund the remainder of the cost of the project by using the health and safety element of the 2010/11 capital budget. The Financial Improvement Plan and Business Plan for the Nursery would ensure that the facility generated a net annual cash contribution of £80k pa. The Committee discussed whether changes to the Lennartz Rules on VAT might be beneficial with regard to this project, the pricing policy for use of the facility and the use of capital and revenue funding across different financial years.
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The Chair of the Committee suggested that the external appearance of the building was in need of upgrading such as window replacement, with existing cladding and new cement rendering being coloured to match the new College main building. At this time however the College was concerned that any additional works would delay the finish of the building which was required for the start of the Autumn Term. The Committee also satisfied itself that there were no problems with procurement legislation and that the right course of action was to let the contract to Surgo the main contractor for the College New Build project. Resolved 1. 2. 3
That the Nursery Capital Project be authorised to proceed at a cost of £232,937.88, with the approved contractor, Surgo, commencing on 5 July 2010. That the College considers how best to upgrade the external appearance of the Nursery building and proceed to obtain quotations for the work.
Cleaning Contract –Skills and Employment Centre The Committee considered the only three quotations received that matched the contract specifications for the cleaning of the Skills and Employment Centre, Spennymoor. The Committee questioned why the additional hourly rate of the lowest tender was lower than the contract hourly rate and was informed that additional hours required no additional supervisory charges. Resolved That the lowest tender submitted by KGB be accepted.
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New Build Phases 2 and 3 Capital Development The Committee was informed that the final cost of the Phase 2 and 3 Contracts for the New Build Project was £127k higher than the contract price inclusive of the budgeted contingency provision. The College was to quantify the changes to original contract prices to see if any unauthorised changes had been made prior to entering into negotiations on the final contract price.
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Financial Improvement Plan 2010/13 The Committee was informed that guidelines had been received from the AoC the previous week following the Budget. However the College Budget and 3 Year Plan to be presented to the Corporate Board would be based on that submitted to the Finance & GP Committee on the 7 June 2010. The Committee was also advised that it had not been possible to prepare the Budget and Three Year Plan in the format required by the SFA in time for the Corporate Board meeting but that the Board would be asked to approve it on the basis that the final figures would be the same on transfer to the required format. It was expected that the Budget and Plan would incorporate further reductions in the Adult Education provision but no one was sure given the legal status of FE Colleges whether they came within the Government’s plan to freeze public sector wages for 2 years. It was also noted that there would be no increase in funding rates.
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VAT Capital Building Zero rating The Committee noted that following a case in Scotland where a successful case had been made for a College’s capital building project to be zero rated for VAT purposes that a similar case was to be launched in England as Customs and Excise had refused to accept the Scottish judgement was binding in English law. The College considered that it might be appropriate to lodge a protection claim pending the outcome of the case as to do so could significantly benefit the College if the case was won. However it was considered that as the College was benefiting from deferred VAT payments through the Lennartz scheme any protection claim might be harmful to the current good relationship that the College had with the local HMRC Office. Resolved That the Committee be kept informed on the issue and that the College be authorised to consult with the Chair of the Finance & GP Committee and N Baldry as to how to proceed in the future should any urgent action be necessary.
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St Mary’s FC The Committee noted that the planning consent for St Mary’s FC to site a changing facility in the College grounds had expired and that the Principal had agreed that any further planning consent sought by the football club would be supported. Page 3 of 3