BUFDG Digest - 27 March 2024

FINANCE FESTIVAL SESSIONS

It seems like a lifetime ago already. A reminder that if you didn’t manage to attend any of the Finance Festival, it is all available on catch-up. Here’s what you might have missed:

Our good friend Andy Westwood started the day with a glimpse into what the future may hold for the sector (or the next year at least), Canada Life considered where the markets might be going, and BlackRock looked into the evolution of AI. We heard from the Cabinet Office on the Transforming Public Procurement programme and forthcoming Procurement Act, BDO on crime risk management, Buzzacott on ensuring effective year-end and audit processes, and Greenbank Investments on navigating the practical challenges of Net Zero implementations.
Neill MacKinnon from STA International UK and Glenn Ruane from The London School of Economics and Political Science (LSE) discussed the six pillars of successful cash collection and credit management, QMPF LLP shared best practice tips for financial modelling, business planning and forecasting, and our very own Julia Ascott and  Andrea Marshall outlined the top UK tax issues for university sector right now.

On day 2, we explored personal growth across finance roles in H E with BUFDG Chair Erica Conway (University of Birmingham) and colleagues Zachary Maguire & Modupe Sanni, Paul Gowdridge (University of Leicester), Craig Jones (Aston University), Stevie Quorn ACCA (University of Westminster) and Victoria Skinner (University of Manchester). We took a (relatively) deep dive into pensions and rewards with  Isio, and avoided employment trip hazards with Julia Ascott and KPMG UK's Paul Moreels. Peninah Achieng-Kindberg (University of Bath), Patrick Bolster (Solicitors Regulation Authority), Richard Claughton (Heriot-Watt University), and Sally Crabb (University of Plymouth) discussed the science of inclusion. KPMG UK, Jisc and Andy Goor (University of St Andrews) took delegates ‘Ahead in the clouds’ to share lessons for effective finance systems implementation, RSM UK assessed the cyber fraud and cyber threat landscape, and HW Fisher and Oxford University Innovation talked all things commercialisation and IP. Cazenove Capital gave practical tips on climate related investment policy for HEPs, Bevan Brittan LLP and Amberside Advisors tackled how to tackle and pay for estate decarbonisation, and Grant Thornton UK LLP demystified sustainability reporting requirements.

Day three of the Festival started with Energy Systems Catapult about how H E professionals can find their place in a Net Zero campus, and VWV on strategies for managing subsidiary companies.
Charles Shannon (MAAT) (N. DIP. Marketing Management) (Loughborough University), Ellen Thompson and  Jonathan Gray (LEES Accountants) from the ARMA UK Audit and Compliance Special Interest Group explored the fundamentals of project-specific grant auditing, levels of assurance, and common errors and pitfalls. Colleagues from University of Birmingham regaled us with the small miracles involved in their efforts to reduce their audit timetable, Mercer’s Rebecca Dodd confirmed there is never a dull moment in the world of sector pensions, Pinsent Masons addressed the current challenges for Student Accommodation projects, and Julia Ascott and  Andrea Marshall (we really made them work harder than ever this week) outlined the top international tax issues that are common concerns in H E right now. And finally, we were joined by Holger Bollmann and Carley Brown FCIPD from Strengthify for our closing plenary, reminding us all that harnessing individual strengths at work leads to wonderful things.

In related news, you can now book your place on the Scottish Universities Finance Conference taking place F2F at the University of Glasgow on Thursday 30^th May.  The event is free to attend and open to all levels across finance and procurement teams. You can find more details and book your free place here. The agenda is still to be confirmed but we will update the event pages as soon as we have more details. If you have any queries, please contact  Rachel.

FUNDING

Phase 5 of the Low Carbon Skills Fund has been confirmed by government for the financial year 2024/25. The application portal will open on Wednesday 17 April and close on Wednesday 1 May 2024.

HEFCW has announced the destination of £3.4m of Welsh Regional Innovation Funding (RIF).

There’s been a steady trickle of articles covering the sector funding crisis over the last few weeks. The Times (£) takes a look at the drop in foreign student applications, as well as rising costs and examines the possibility of more mergers. Alastair Sim, the outgoing Director of Universities Scotland, echoes this in an article for The Scotsman (£), warning of the risk of severe damage to a national asset. Outgoing Oxford Chancellor Chris Patten makes a similar call in the Times Higher, saying there needs to be cross-party consensus on funding Universities properly. UCEA and UUK publish a joint call for the government to address the sector’s unfunded increase in TPS contributions. Jim Dickinson at Wonkhe is solution-focused and has articles on whether UK HE could be cheaper to run, and whether it’s time to ‘slap VAT on tuition fees’.

UCEA has also launched its page relating to the 24/25 New JNCHES pay round, including the list of participating HEIs (down by 4), participant statements, and meeting dates. Here’s the Wonkhe summary, as well as a very interesting IFS publication on public sector pay that paints a complicated picture, and raises questions about pay-band compression and retention challenges.

Meanwhile, in what may or may not be a surprise, Science Minister Michelle Donelan has told the House of Lords SciTech committee that there is no university funding crisis.

In a webinar for ICAEW Nicola Arnold (CFO at JISC), Andrew Bush (KPMG), and David Kernohan (Wonkhe) take an in-depth look at university finances and explore sources of income, discuss the viability of university models and answer questions. With its financial health under increased scrutiny, anyone who is interested in the pressures, challenges, financial threats, and opportunities in the higher education sector will learn from (and hopefully enjoy) this session. You don’t have to be an ICAEW member to access it through a short registration form. And finally, a reminder that if you need to learn more about how university finances work, or ever explain them to anyone else, you can make use of BUFDG’s Understanding University Finance guide.

SECTOR / POLITICS

The government has announced a tight timescale for the Migration Advisory Committee review of the Graduate visa, leading to questions over the political motivation.

Last week the OfS launched a “call for evidence” seeking views on how they “apply their powers to distribute funding to universities and colleges in England.” This was issued after conversations with many HE sector representative groups, including BUFDG. The closing date for responses is the 23 May. David Kernohan has a useful summary on Wonkhe.

Higher Education minister Robert Halfon has resigned from his post, announcing at the same time that he will not stand for re-election in the Autumn. He joins a growing list of Conservative MPs standing down as MPs. David Kernohan has written a brief blog about Mr Halfon’s legacy on Wonkhe. Luke Hall has been announced as his replacement, although it isn’t immediately clear what his brief will include.

The MillionPlus group of universities has launched a report in advance of the general election, with an emphasis on skills development and equipping the public sector workforce.

The ONS has published estimates of the revenue earned from TNE and education-related exports.

The Scottish Government has launched its vision for what education and lifelong learning might look like in an independent Scotland.

Lastly, there’s a good news story on universities for a change, courtesy of the FT. It talks about the important role universities play in launching technology businesses, as part of a new special report on Europe’s leading start-up hubs.

FINANCIAL REPORTING / AUDIT

The FRC has issued amendments to FRS 102. The amendments are designed to enhance the quality of UK financial reporting and were expected in the first half of 2024. The FRC's release begins the development of the new Statement of Recommended Practice for Further & Higher Education (FEHE SORP). Members of BUFDG's Financial Reporting Group have formed a Technical Working Group, and will be supported by KPMG’s Accounting Advisory Services team to coordinate the development of the new SORP, which will have an effective from date of 1 January 2026, meaning adoption for the 2026/27 financial year for most. Updates will be given throughout the project, and there will be opportunities for BUFDG members to feed into this process including a consultation period in early 2025. If you have any comments or questions at this time, please contact Joni in the first instance. The FRC will be hosting a webinar to discuss the new standards at 11am on 15 May 2024. It has also issued a minor update to its  Staff Factsheet 8 Climate-related matters.

Separately, the FRC has launched a market study on the UK sustainability assurance market, to “ensure this rapidly growing market is functioning effectively and providing high quality assurance over companies' sustainability reporting”. Interested and affected parties should submit comments and evidence by 13 June, with the study itself expected to conclude in early 2025.

Members can now download the report of the 2024 Audit Survey from the BUFDG website (login required). Thank you very much to all those who responded. We had 101 responses in total, which is 55% of member HE institutions. This is around 10% lower than the prior two years, but should still ensure a representative picture of audit provision across the sector. If you have any questions about the report, or spot anything that looks erroneous, please do let Matt know.

PROCUREMENT

The past few days have seen the Cabinet Office release a flurry of information relating to the implementation of the Procurement Act 2023.  Last week they published their response to the consultation on the draft regulations to implement the Procurement Act.  This paved the way for the publication of the draft Statutory Instrument / Secondary Legislation yesterday in the form of the Procurement Regulations 2024.  In addition to this, the Cabinet Office also published the first batch of guidance documents relating to the new regime, including guidance relating to the definition of a Contracting Authority which may be of particular interest to some members.

To help prepare for the implementation of the new system in October 2024 members can now start registering on the Government Commercial College (GCC) platform in advance of the launch of the e-learning L&D package later next month; there is a handy GCC User Guide available to assist should you have any questions.  It is also not (quite!) too late to register as a Super User – all of the information you need to sign-up is available here.

The central Policy team have published two interesting Procurement Policy Notes (PPN) of late – PPN 01/24 Carbon Reduction Contract Schedule and PPN 02/24 Improving Transparency of AI use in Procurement.  On top of this, HEPA has been informed that an updated Standard Selection Questionnaire (SQ) is to be published imminently – probably today – though at the time of writing the updated document hadn’t made its way onto PPN pages of gov.uk just yet.

HEPA is our HE sector single point of contact with the Cabinet Office for the for the Transforming Public Procurement programme.  If you have any questions or comments about the upcoming changes, or about procurement reform more widely, then please do not hesitate to get in touch with Ashley.

Last, but by no means least, bookings are now open for the next series of Head of Procurement meetings – we look forward to seeing members there!

TAXES

We’ve just launched a new page on the tax section of the BUFDG website to collect together all the useful resources on subsidiary companies. It includes our four short explainer videos, webinars from our various conferences (including the VWV session on managing subs at the Finance Festival), and links to further guidance documents. If there’s anything that you think we’ve missed, let Amanda know.

HMRC are consulting on plans to require employers to include employee hours worked within Real Time Information (RTI) returns from April 2025. It could be a massive adjustment for the sector and it will certainly require more input and manual alterations by your payroll teams, particularly when it will potentially be implemented at the same time as the mandatory payrolling of benefits.

The CIOT welcomes changes to the non-dom system, but laments on the failure of the government to follow their own consultation framework. BUFDG continue to liaise with HMRC on their delays issuing Certificates of Coverage, look out for a survey after the Easter break. The government explains the changes to the UK immigration rules, including the increase to the salary threshold from £26.2k to £38.7k.

And if you’re planning a holiday to Greece, be advised that you’ll be charged a new ‘climate resilience levy’ which is higher during peak seasons (and higher than the old tourist tax charge).

We are working with HMRC for definitive guidance on how a payment on account is calculated. HMRC confirms the VAT treatment of the latest round of Horizon grant funds and also confirmed that if the Postponed Import VAT Accounting Entry is not due, it should not appear on the VAT return.

If you are looking for some VAT related light relief, you should definitely read  I love a Tribunal Decision on food....

And, a reminder that you can read the TaxHE newsletter in full on the Tax section of the website.

JOB OF THE FORTNIGHT

Our Job of the Fortnight is for a Deputy Financial Controller at the University of Greenwich. The university is “specifically interested in hearing from individuals who have experience in effectively managing external audit processes and are passionate about creating and sustaining a high performance culture.” The deadline for applications is Sunday 7^th April.

There are lots of other vacancies listed as usual on the BUFDG jobs page.