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Court

Minute of Meeting held on Wednesday 12 October 2016 in the Senate

Room

Present:

Mr Ken Brown Co-opted Member, Ms Morag Deans SRC Assessor, Professor Lindsay Farmer Senate

Assessor, Dr Carl Goodyear Senate Assessor, Mr Ameer Ibrahim SRC President, Professor Karen

Lury Senate Assessor, Dr Morag Macdonald Simpson General Council Assessor, Ms Margaret Anne

McParland Employee Representative, Mr Ronnie Mercer Co-opted Member, Ms June Milligan

Co-opted Member, Ms Margaret Morton Co-opted Member, Professor Anton Muscatelli Principal,

Ms Elspeth Orcharton Co-opted Member, Ms Elizabeth Passey Co-opted Member (Convener of

Court), Dr Duncan Ross Senate Assessor, Ms Lesley Sutherland General Council Assessor

In attendance:

Ms Ann Allen (Director of Estates & Buildings), Professor Anne Anderson (Head of College of

Social Sciences and Vice-Principal), Ms Christine Barr (Director of Human Resources), Professor

John Briggs (Clerk of Senate), Professor Frank Coton (Vice Principal Academic and Educational

Innovation), Professor Anna Dominiczak (Head of College of Medical, Veterinary and Life Sciences

and Vice-Principal), Mr Robert Fraser (Director of Finance), Professor Neal Juster (Senior

Vice-Principal), Ms Deborah Maddern (Administrative Officer), Mr David Newall (Secretary of

Court), Professor Roibeard Ó Maolalaigh (Head of College of Arts and Vice-Principal)

Apologies:

Members: Mr Dave Anderson Employee Representative, Mr Graeme Bissett Co-opted Member, Ms

Heather Cousins Co-opted Member, Professor Nick Hill Senate Assessor, Cllr Pauline McKeever

Glasgow City Council Representative, Mr David Milloy Co-opted Member, Mr Murdoch MacLennan

Chancellor’s Assessor, Professor Paul Younger Senate Assessor

Attenders: Professor James Conroy (Vice-Principal Internationalisation), Professor Muffy Calder

(Head of College of Science & Engineering and Vice-Principal), Professor Jon Cooper

(Vice-Principal Innovation & Knowledge Exchange), Professor Miles Padgett (Vice-Principal

Research)

CRT/2011/1. Announcements

Elizabeth Passey opened her first meeting as Convener of Court.

Mr Ameer Ibrahim was welcomed to his first meeting in his capacity as SRC President, having

attended the June meeting as an observer. Ms Elspeth Orcharton, a new Co-opted member of

Court, was welcomed to her first meeting.

There were no declarations of interest in relation to business to be conducted at the meeting.

CRT/2016/2. Minutes of the meetings held on Wednesday 22 June 2016

The minutes were approved and signed by the Convener as a correct record.

Court Wednesday 12 October 2016

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CRT/2016/3. Matters Arising

There were no matters arising.

CRT/2016/4. Report from the Principal

CRT 2016/4.1 Guild of European Research Intensive Universities

In previous reports, the Principal had referred to the formation of the Guild of European

Research Intensive Universities, founded by a group of world-leading universities. The

Guild brought together universities that had demonstrable excellence in teaching, research and

policy formation, on a pan-European basis, to collaborate on the creation of innovative

solutions to scientific and social challenges. The Principal was Vice-Chair of the Guild,

which had met during 2016 and would be formally launched in November. In the meantime,

in the light of the UK’s decision to leave the European Union, the current members of the

Guild had called for enhanced European university collaboration.

CRT 2016/4.2 Higher Education and Research White Paper: Success as a Knowledge

Economy: Teaching Excellence, Social mobility and Student Choice (BIS, UK Government).

At the last meeting, the Principal had reported that the White paper had been published in

May, with core elements including the intention to make it easier for new providers to set up

and gain degree awarding powers, the introduction of the Teaching Excellence Framework

(TEF) and other measures including the creation of an Office for Students (OfS) and a new

UK Research and Innovation (UKRI) body.

From a Scottish perspective, the TEF continued to cause some concerns, given that the HE

sector in Scotland generally valued the Scottish Framework for Enhancement and would not

wish to jeopardise this approach in favour of the TEF. There was, however, a potential

negative reputational impact that could develop if Scottish universities were not in the TEF.

Court noted TEF would have three levels: (Entry level) Bronze, Silver and Gold. The

Department for Education in England had published a list of Higher Education providers -

including all Scottish HEIs - that had met the baseline ‘Bronze’ grade. TEF would be

progressively developed over the next few years from an institutional (Provider) level

assessment to a subject level assessment. Most Scottish Universities would not enter the

Provider-level TEF stage until the ‘rules of engagement’ for Scottish institutions were clear

and there was a concern that Scotland should not be disadvantaged. Universities Scotland

had established a working group to provide advice on Scotland’s position on TEF, in

particular subject-level TEF. The Department for Education was engaging with the Scottish

HE sector over the new provisions. The Scottish Government had indicated that it did not

intend to link TEF ratings to an institution’s ability to set tuition fees at a certain level. Court

noted that it was possible that world rankings systems might in the future include TEF ratings

in calculations, and that this area needed to be kept under careful review.

CRT 2016/4.3 Student Admissions including RUK

Court noted details of student admissions figures for 2016 entry, for Undergraduate and

Postgraduate (PGT/PGR), Home, RUK and International students, noting also that targets had

been met.

Court noted that SMGr had recently agreed that with regard to the level of tuition fee for rUK

students for 2017 entry, if certain HEIs in England moved to a £9,250 per annum fee, then the

University should also move to charge £9,250, capped at 3 years, with no charge for 4th year.


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The agreement to lift the fee cap in Scotland to £9,250 had been reached with the Scottish

Government. If HEIs in England did not implement the increase, the fee level would remain

at £9k. Court noted that evidence from the sector as a whole was that applicants associated

cost levels with quality.

Court also noted that in May 2017 there would be a discussion around whether to continue the

policy for rUK students of charging fees for 3 years or move to charge for 4 years. Court

noted a comment from the SRC President that student views should be taken into account and

incorporated into ongoing consultation. With regard to EU students, SMGr had agreed that

in the absence of certainty around future government policy, the University should not

undertake to maintain current fee arrangements for EU students for 2018 entry and beyond.

In discussion, Court noted that with regard to rUK students, the question of the financial

ability of a student to take up a place under the current arrangements, where fees were

charged for 3 years with the 4th year free, was addressed through the University’s funding

packages for those on lower incomes. Such packages would also require to be put in place

were there a move to charging for the 4th year, following this matter being discussed in May

2017. Court also noted that the balance of EU/Home students might be reviewed in future, in

the context of risk management in a climate of uncertainty.

The SRC President noted that the proposal to increase fees to £9,250 would add to the very

significant cost now borne by rUK students in Scotland, in particular in those universities that

charged fees for a full four years of study. It would put certain students at a disadvantage.

While recognising this concern, Court noted that the current fee level did not appear to have

suppressed the demand by rUK students to study in Scotland.

CRT 2016/4.4 Standing Council on Europe

In late June, the Principal had been appointed by the First Minister to chair a group of experts

to advise the Scottish Government on securing Scotland’s relationship with the EU. The

group’s role was to advise the First Minister and the Scottish Government on a number of

strategic areas, on a non-political basis.

CRT 2016/4.5 University Rankings and Awards

In recent international league tables, the University had been placed 88th

in the THE World

Rankings, down from 76th last year. In the QS World University Rankings, the University

had been placed 63rd

, one place lower than last year.

This year’s National Student Survey (NSS) rankings had put the University of Glasgow in

joint third position in Scotland and joint 24th among all UK Higher Education institutions,

excluding specialist and private providers. The University had been joint 7th in the Russell

Group. Despite a continued decrease year on year, overall satisfaction for Glasgow had

continued to exceed all sector, Russell Group and Scotland averages. The sector, as a whole,

had remained flat year on year.

For the second year running, the University of Glasgow had won the top title - Higher

Education Institution of the Year - at The Herald’s Higher Education Awards. The

University had also been successful in a number of student categories and in categories

covering academic activity and research.

CRT 2016/4.6 Key Activities

Court noted a summary of some of the main activities in which the Principal had been

involved since the last meeting of Court, covering internal and external activities beyond daily


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operational management and strategy meetings. The activities were under the broad

headings of: Academic Development and Strategy; Internationalisation activities;

Lobbying/Policy Influencing and Promoting the University; Internal activities and

Communications.

CRT/2016/5. Report from the Secretary of Court

CRT/2016/5.1 Court Strategy Day

Court’s annual strategy day had taken place on 26 September, the programme having included a

substantial session on the Campus Estates Strategy and development of the Capital Plan. The

day had been positively received. The Court Estates Strategy Working Group had met on 3

October and its business had included receipt of a summary of feedback from the strategy day

discussion on the Estates session. SMG would now take steps to create and present an updated

Capital Plan to Court in December 2016. A full business case for the Learning & Teaching

building would also be presented to the December meeting of Court.

CRT/2016/5.2 Competition and Markets Authority: Student Debt

The Competition and Markets Authority (CMA) had advised that in its opinion the University’s

use of academic sanctions to enforce a non-tuition fee debt was unlawful and had requested that

the University amend its debt policy.

Court noted that when a student was having difficulty in clearing debt, the University’s

approach was supportive, including an offer of assistance in the form of flexible payment plans

and advice on financial management. However, in common with the majority of universities in

Scotland, the University insisted that debt was ultimately cleared before the student graduated,

or proceeded to the next year of study. That sanction was expressed in the University

Calendar.

The Secretary of Court and Director of Finance, together with the University’s lawyer, had met

with the CMA in August, and there was ongoing discussion of the matter. This included the

CMA having been challenged about its contention that the debt policy was illegal. Court noted

that the CMA had very recently advised that it continued to view the policy as illegal.

Court noted that other institutions varied in their approach to the matter, but with a number

operating the same system as the one currently in operation at the University.

Court agreed that the Secretary of Court and Director of Finance should enter into further

discussion with the CMA, and hoped that these discussions might result in agreement on a

satisfactory way forward. Should the discussion lead to recommendations regarding the terms

of the University’s debt policy, Court would consider these by email so as to avoid unnecessary

delay in reaching agreement with the CMA.

CRT/2016/5.3 Scheme of Delegated Authorities

The Scheme, which formally sets out where responsibilities lay in the University across the

main areas of activity, had been reviewed and refreshed. Court noted that a small number of

other areas including those relating to the IT strategy would be added and that the finalised

reviewed scheme would be included in the papers for the December meeting

CRT/2016/5.4 Higher Education Governance (Scotland) Act – Transitional Arrangements

The intention of the Scottish Government was that the Higher Education Governance (Scotland)

Act would come into force in either late 2016 or early 2017. Different provisions might start at


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different times, with the more substantial and complex matters commencing later. Amended

arrangements for membership of both Court and Senate, arising from the Act, were subject to a

transition period of 4 years. This would allow existing terms of office to expire and would

give time for some amendments to the configuration of Court to be agreed.

As previously agreed at Court, there would be as little disruption as possible to Court’s existing

membership categories, retaining the membership at 25 (and no more), and retaining a clear lay

majority.

Court agreed that it supported early discussion with Senate and with the Trade Unions about

possibilities and options to effect the required changes to the composition of Court. The

Principal advised that he would establish a joint Court/Senate working group to facilitate

discussions.

CRT/2016/5.5 Remuneration Committee Business

Remuneration Committee would conduct the annual review of the salaries of SMG members, in

November. In line with established practice, it would submit a full minute of that meeting to

the December meeting of Court, summarising the decisions it had made and setting out their

rationale.

In 2014, the Committee of Scottish Chairs had issued a Guidance Note for Remuneration

Committees. One aspect of this guidance was that 'each year, in advance of the committee’s

annual review of senior salaries, the governing body should provide policy guidance to the

committee'. Court had received for consideration a proposed method of reviewing senior

management salaries for 2016, as follows, which was in line with wording agreed in 2015:

Remuneration Committee’s review of the salaries of members of SMG will be informed by:

- a statement of each SMG member's salary for this and the previous 4 years;

- benchmark information, from the Universities and Colleges Employers Association, showing

how Glasgow's salary levels compare with those of other UK universities;

- advice from the Principal on the performance of each member of the SMG in 2015/16,

following his P&DR discussions with them; and

- in respect of the Principal, advice on performance from the Convener of Court, following

her P&DR discussion with the Principal and reflecting the views she has obtained on the

Principal’s performance through consultation with staff, students and lay governors.

In considering the appropriate level of reward, the Committee intends to:

- provide tangible reward for excellent performance;

- give consideration to any cases where the salary awarded by the University is substantially

out of line with that of managers in equivalent positions at comparable universities; and

- apply a general principle that percentage pay increases for senior managers should not be

higher than those for the workforce as a whole.

Court approved the text subject to it being revised to include a requirement that Remuneration

Committee cover two matters in its report to Court The first of these was the nature of the

benchmarking information used to compare senior salaries at Glasgow with those in other

universities. The second was the precise basis on which the Committee had applied the

principle that percentage pay increases for senior managers should not be higher than those for

the workforce as a whole.


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CRT/2016/5.6 Anti Bribery Policy

The Audit Committee had suggested that Court might consider whether the scope of the

University's Anti Bribery policy, including matters relating to training, should be extended to

include lay as well as executive officers. This would include Court members and external

members of relevant Court committees.

Court agreed that the policy should be so extended.

CRT/2016/5.7 Composition of Audit Committee

Court agreed that the Audit Committee should in future include one staff member, identified

from among the Senate Assessors.

CRT/2016/5.8 Vice-Chairs / Vice-Convener

Court agreed arrangements relating to a Vice-convener of Court and Vice-chairs of Court

Committees being appointed.

The Vice-convener of Court would deputise for the Convener of Court in her absence. The

Vice-convener would be appointed by Court on the nomination of the Convener.

The Vice-chair of each Court committee would deputise for the Chair in his/her absence. The

Vice-chair would be appointed by the Committee, on the nomination of the Chair. It was

agreed in addition that the Vice-chair of any Committee would be drawn only from lay

members.

Standing Orders would be amended accordingly.

CRT/2016/5.9 Nominations Committee business

i) Court and Committees

Ms Elspeth Orcharton had been appointed as a Co-opted member of Court. Ms

Orcharton would also serve on the Finance Committee. Both appointments would be

for a 4 year term beginning on 10 October 2016.

Court approved a recommendation from the Nominations Committee that June Milligan

become chair of the Human Resources Committee, with immediate effect and for the

same period as her term of office on Court, which would run until October 2019.

Margaret Morton was demitting office as a Co-opted member of Court. This would

leave a vacancy for chair of the Estates Committee. Court approved a recommendation

from the Nominations Committee that Ronnie Mercer become chair of the Estates

Committee, with immediate effect and for the same period as his term of office on

Court, which would run until October 2019.

Court approved a recommendation from the Nominations Committee that Lesley

Sutherland join that Committee, with immediate effect and for the same period as her

term of office on Court, which would run until July 2018.

ii) Nominations Committee remit

Court approved a minor change to the remit of the Nominations Committee, such that part of it

would read To make recommendations to Court on the appointment of Court committee

members, in consultation with the relevant Committee chairs; and to make recommendations

on the convenership of Court committees.


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CRT/2016/5.10 Committee Remits

Consistent with the amendment to the Nominations Committee remit, Court agreed that the

remit of each Court Committee be edited to reflect the role of the Committee and its Chair in

ensuring that the Committee had the necessary skills and experience to address its remit

effectively, as follows:

To ensure that the Committee's membership includes the skills and experience necessary to

address its remit effectively. To this end, the Committee may request that the University Court

appoint one or more additional co-opted members to the Committee. The Chair of the

Committee will participate in the selection process for a new co-opted member.

Court also agreed that as a matter of good governance, a wider review of the composition of all

Court Committees should be undertaken, to include looking at practice elsewhere in the sector.

The exercise would be co-ordinated through the Nominations Committee and would include

input being sought from Court.

CRT/2016/5.11Court Business 2016/17

Court approved changes to the wording of Standing Orders for Court, reflecting the outcome of

the Court Governance Working Group’s consideration (earlier in 2016) of the HE Governance

Act and areas within the Standing Orders that required reviewing as a consequence.

(The Standing Orders will also be amended to reflect Court’s agreement relating to the

Vice-convener and Vice-chair appointments (Minute CRT/2016/5.8 refers); and to the

requirement to notify the Secretary of Court about matters to be raised under Any Other

Business (Minute CRT/2016/11 refers).)

Court noted: appendices to the Standing Orders with details of Court committee dates for this

session; Remits of Court Committees, which were subject to changes as agreed and would also

be subject to any amendments recommended following the agreed wider review of their

composition; the Statement of Primary Responsibilities; and the Schedule of Court Business for

the coming year.

The attendance lists for meetings of Court and its Committees for 2015/16 had been reviewed;

there were no outstanding issues for Court to note in connection with this.

CRT/2016/5.12 Review of Code of Governance

The current Governance Code for Scottish Higher Education has been published by the

Committee of Scottish Chairs in July 2013. At the time of publication, the chairs had

committed to a review of the Code after three years. A Review Committee had been

established, whose evidence-gathering process had included consultative visits to each of the

Scottish HEIs to hold a set of structured meetings. The outcome of the review was expected in

November.

CRT/2016/5.13 Campus Development Financing/Glasgow Student Villages

In April 2016, Court had approved a recommendation from the Finance Committee, agreeing to

a financial strategy for the campus development, involving a mix of private placements with

UK and US institutions, a term loan from the European Investment Bank and, subject to

satisfactory terms being negotiated, the refinancing of the Glasgow Student Villages debt.

Having approved this recommendation, Court had also agreed to establish a special purpose

working group to oversee implementation of the strategy. Court noted a report from the group.


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CRT/2016/5.14 Court Procedural Review Group

On Court's behalf the Court Procedural Review Group considered proposals on organisational

change. It had the authority to instruct management to implement proposals. Alternatively, it

might decide not to authorise the proposals, and/or to refer them to Court for discussion. In

July, the Group had agreed that management should be given authority to implement

organisational change in the Law School. The proposal, which was supported by the Social

Sciences College Management Group, had arisen from changes already approved to the

curriculum, and involved a reduction in staffing of up to 1.5 FTE.

CRT/2016/5.15 Appointments of Head of School

College of Arts

School of Modern Languages and Cultures

Professor Vicente Perez De Leon, University of Melbourne, had been appointed as Head of the

School of Modern Languages and Cultures from 1 August 2017, for 2 years in the first instance.

Professor Michael Syrotinski would be acting Head of SMLC until 31 July 2017.

College of Social Sciences

Adam Smith Business School

Professor John Finch had been appointed as Head of the Adam Smith Business School for 4

years commencing 1 September 2016.

CRT/2016/5.16 Queen Margaret Union

On Court's behalf, the Secretary of Court had reviewed and approved minor changes to the

constitution of the Queen Margaret Union, as approved by the Union's Annual General Meeting

in June.

CRT/2016/6. Learning & Teaching Strategy

Professor Frank Coton updated Court on the Learning and Teaching Strategy, including

performance against Key Performance Indicators, which were noted by Court.

With regard to the National Student Survey, there had been a small decrease in overall student

satisfaction, from 90% to 89%, since the previous year. Court noted that the University

worked closely with the SRC with regard to NSS-related activity. A NSS Task Group had

been set up to develop a campaign for positive promotion of the student experience; to

understand and develop actions to address University-wide issues identified in NSS; and to

develop a longer-term plan for support of the student experience. Action planning at local

level was under way, and there was a focus on the culture across the entire organisation,

which was important in ensuring the best possible student experience. An Assessment and

Feedback Working Group had been established, to look at areas including assessment

standards in exams, and Graduate Teaching Assistant practice including recognition and

reward. A Feedback Toolkit had been launched; this was a web-based resource to help staff

and students to understand and use the most appropriate forms of assessment and feedback in

learning and teaching, and included case studies of practice. Court noted that there were

variations by subject area, in NSS outcomes relating to assessment and feedback, and that the

focus of measures to optimise the student experience in this area was directed at practice.


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Professor Coton also briefed Court on areas of activity in the Teaching and Learning sphere.

With respect to the Curriculum, a framework for a ‘curriculum conversation’ had been

established; and English language support enhanced. In response to a question about course

content, Court noted that the Clerk of Senate would look at existing policy relating to

advising students if a lecture might contain potentially upsetting content. With respect to

developments on the University estate, there had been continued upgrading of Library study

space, nine teaching rooms refurbished to pilot Learning & Teaching Hub designs, and an

academic steering group convened to support and evaluate new spaces. A Transitions

Working Group had been established to support transitions into the University environment

for all students; related activity included developing targeted support for Widening Access,

International and Glasgow International College students. Court heard that with regard to

online learning, there was continued roll out of online distance Masters programmes, an

increase in blended and online courses on campus, and continued engagement with Massive

Open Online Courses (MOOCs)

Court thanked Professor Coton for the briefing.

CRT/2016/7. Reports of Court Committees

CRT/2016/7.1 Finance Committee

CRT/2016/7.1.1 Committee Remit

Court approved a change to the remit of the Committee, as referred to in Minute

CRT/2016/5.10 Committee Remits.

CRT/2016/7.1.2 Capex Applications

The Committee had approved CapEx applications relating to: Western Infirmary Site

Enabling Works Finance Committee, where the Committee had agreed that commitments

against the approved spend of £8.651m could be made on the authority of the Western

Infirmary Site Governance Board. Should the anticipated cost rise above the approved sum,

then a further report should be brought to Finance Committee; Wind Tunnel, Acre Road,

fourth and final additional sum of £143k; and Campus Smart Card/Access Control System,

£926k.

CRT/2016/7.1.3 Endowment Investment Report

Court noted an endowment investment report as at 31 July 2016.

CRT/2016/7.1.4 Financial reports

Court noted an overview of performance as at 31 July 2016.

Court agreed that financial information should be provided in more summary format for future

meetings.

The report was noted.

CRT/2016/7.2 Audit Committee

CRT/2016/7.2.1 Risk Management

At the last meeting, Court had agreed that as part of its involvement in the area of risk


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management, Court should, through the Audit Committee, receive the University’s strategic

risk register at each of Court’s October meetings. Court heard that the register was

compiled by a process involving scored risk analysis, including probability and effect, with

risks then prioritised. Mitigating actions were included and assigned to appropriate senior

management. A small number of the listed risks were further analysed in detail at each

meeting of SMG during the year.

The risk register was noted. Comments were made with regard to greater commentary

being needed - which it was noted however did occur in the version that Audit Committee

saw regularly - and to more specific detail being required about what gave rise to some of

the (more generalised) risks listed. It was also suggested that a RAG classification might

be applied. Court members were asked to contact the Secretary of Court with any further

comments; these would be relayed to the Audit Committee and to SMG. The Audit

Committee would continue to receive the register regularly, including details of mitigating

actions. The chair of the Committee, Heather Cousins, and Secretary of Court would also

discuss this area further with a view to optimising processes.

CRT/2016/7.2.2 Anti Bribery policy

The matter had been discussed under item CRT/2016/5.5.

CRT/2016/7.2.3 Other Audit Committee business

At its recent meeting, the Committee had received reports on recent internal audit reviews.

The external auditors had provided the Committee with an update on the progress of the

2015/16 audit, in particular the FRS102 conversion process; and the Committee had

received a report on the management's approach to these areas. The Committee had

received details of the University's corporate structure; and received a report on cases of

research misconduct in 2015/16, the report being made annually to the Committee as

required by the Research Councils. The Committee received an update on the Scottish HE

Bill and the review of Scottish Code of Good HE Governance


CRT/2016/7.3 Estates Committee

CRT/2016/7.3.1 Estates Strategy

Court noted the Estates Committee had received details about the pending review of the

Capital Plan, and the potential impact on previously identified development priorities.

CRT/2016/7.3.2 CapEx Applications

Court noted Estates Committee’s approval of CapEx applications relating to: Western

Infirmary Enabling Works, £8,651k; Development of Supersonic Wind Tunnel, Acre

Road, fourth and final additional sum of £143k; Smart Card Access Control, £926k.

With regard to the Sustainability Strategy it was noted that the governance board was due to

meet in mid-October and would be chaired by Professor John Briggs in the absence of Professor

Paul Younger.



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CRT/2016/7.4 Human Resources Committee

The Director of Human Resources’ report to the Committee at its recent meeting had provided

an update on the ongoing national pay dispute, on developments to the PDR and Academic

Promotions processes, and on the 2016 Staff Survey, which had had a record level of

participation. Court received summary details of the survey, noting the good progress made

in a number of areas but also that there were areas for improvement that the Director of HR,

Christine Barr, advised were being examined, with a focus on bottom-up analysis, involving

Schools and Research Institutes. The Committee had also received an update on the

implementation of the University Strategy, and discussed the People Strategy developed by the

HR function in consultation with Managers and the Trade Unions. The Committee had also

received a presentation on the output from the Cultural Diagnostic exercise carried out earlier

in the year.


CRT/2016/7.5 Health, Safety and Wellbeing Committee

The Committee had received: an update on the central recording of overseas travel risk

assessments and insurance forms; details of progress on appointment of post of Business

Continuity Officer (BCO); and a Staff survey overview from the Director of HR. With regard

to processes for dealing with allegations of bullying or harassment, Court noted that these

processes were managed at local level, with HR input, and that there was a programme of action

to optimise these processes across the University; there were also provisions within leadership

and management frameworks, covering the University’s expectations about local management

of the processes.

The Committee had covered its usual range of business in reviewing standard reports on

Occupational Health activities and on accidents that had occurred in recent months; and on

uptake of employee counselling.


CRT/2016/8. Communications from Meeting of Council of Senate 6 October 2016

The Council of Senate had received an update on the Counselling and Psychological Services

unit, for whose services there had been significant increase in demand in the past year. Court

noted this increase was not unique to Glasgow but was nevertheless of concern and was being

reviewed in terms of resource allocation. Council of Senate had also received: a report from

its Higher Education Governance (Scotland) Act working group, in respect of the Act’s

implications for the composition of Senate; a briefing on Research Beacons, broad-based

themed areas of research excellence that had attracted major external investment; a briefing

on the Teaching Excellence Framework; and a proposal for organisational change in the

Learning & Teaching Centre.

Council of Senate had received a report from the Honorary Degrees Committee concerning

recommendations for the conferment of honorary Degrees in 2017. In line with the

previously agreed arrangement with Senate to allow members of Court to submit observations

on nominations for honorary degrees, the Clerk of Senate John Briggs advised Court of the

2017 nominations, on a confidential basis. Members of Court could contact the Clerk of

Senate should they have observations to make.

The communications were noted.


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CRT/2016/9. Annual report for SFC – Institutional-led Review of Quality and Governing Body

Statement of Assurance

Court had received a copy of the University’s draft annual report to the Scottish Funding

Council (SFC) on institution-led review of quality for 2015-16. The contents were specified

by the SFC. The statement summarised review activity undertaken by the University of its

provision for students, i.e. Periodic Subject Reviews (PSR), Graduate School Reviews and the

University Services Administrative Review Programme (ARP) carried out in respect of

student-facing University services. Information concerning review activity carried out at the

University by Professional, Statutory or Regulatory Bodies was also included.

Having noted details of how the University assured the effectiveness of arrangements for

maintaining academic standards and quality, Court agreed that the required statement of

assurance could be signed off by the Convener of Court

CRT/2016/10. Annual report on the University’s Complaints Procedure 2015/16

Court noted the annual report on complaints activity during academic session 2015-16.

CRT/2016/11. Any Other Business

It was agreed that Standing Orders would be amended formally to include a reference to

members being required to notify the Secretary of Court at least 2 days before a Court meeting,

if they had items of Other Business for the meeting.

Morag Deans was attending her final meeting of Court. Court thanked her for her

contributions to Court and wished her well in the future.

The clerk Deborah Maddern was thanked for implementing a number of innovations to the

paperwork and format for the meeting. Court members’ feedback on the paperwork -

including the new context cards - and on processes, was requested.

CRT/2016/12. Date of Next Meeting

The next meeting of the Court will be held on Wednesday 14 December 2016 at 2pm at

Garscube Estate.

Speaker Professor Anton Muscatelli Urgency LowSpeaker role Principal and Vice‐Chancellor Timing VariousPaper Description Principal's Report to Court Red‐Amber‐Green Rating GreenTopic last discussed at Court Last report to Court was October 2016 Paper Type For informationTopic discussed at Committee NA Paper SummaryCommittee members present

NA

Updates on areas listed in the paper as follows: All for Discussion and/or Information

1. Development Campaign

2. Higher Education Developments3. Guild of European Research Intensive Universities4. Outcome Agreement ‐ Dumfries5. Key activities 6. Senior Management Group business

Cost of proposed plan Topics to be discussed In line with paper's headingsMajor benefit of proposed plan Action from Court For discussion/information/notingRevenue from proposed plan Recommendation to CourtDemographics Relevant Strategic Plan workstream Empowering People, Focus, Agility% of University Items mainly relate to the University as a whole Most relevant Primary KPI it will help the university to achieve All are relevant

Most relevant Secondary KPI it will help the university to achieveRisk register ‐ university levelRisk register ‐ college levelOther universities that have done something similarOther universities that will do something similar

Relevant LegislationEquality Impact Assessment

Suggested next steps

Any other observationsCampus AllExternal bodies

UK Government; Scottish Government; Guild of European Research Intensive Universities; SFC

Conflict areas

Court Context Card ‐ Principal's Report to Court 14th December 2016

1

Court - Wednesday 14 December 2016

Principal’s Report

Items A: For Discussion 1. Development Campaign Court will receive an update on progress with respect to the current Development Campaign, from Cathy Bell, Director, Development and Alumni. The update will cover an assessment of the Campaign’s potential to hit its target, and information on the amount it has actually raised to date with an indication of prospects in the pipeline. It will also identify those areas of success alongside those which are proving to be more challenging. 2. Higher Education developments Westminster Policy Developments There are a number of current developments in train in Westminster, particularly in respect of the Higher Education and Research Bill and the forthcoming Home Office consultation on student visas. The state of play in both these policy areas is very fluid and I will update Court verbally at our meeting on the latest developments. The Second Reading of the Higher Education and Research Bill takes place in the House of Lords on Tuesday 6 December 2016. There are still some areas of concern to both UUK and Universities Scotland and active lobbying of both Peers and MPs continues. On immigration policy, the Home Secretary had announced a consultation on the potential future linking of international student visa policy to the quality of the student and the institution. It now appears that the Home Office consultation may be delayed until the New Year. The UK sector is continuing to lobby energetically on an issue which is of huge importance to all institutions. Court members may have seen some of the media campaign which demonstrates the economic value of the HE sector as an export sector, as an economic driver of the UK economy and indeed in the context of the recent Brexit debate, as an important counterweight in Scotland to a demographic challenge. The UK’s debate on international student visas is unhelpful in the context of the recent positive policy developments in countries like Australia, and particularly Canada. In 2014 Canada set out plans to double international numbers, moving to attract 450,000 international students by 2022. This is a policy which has cross-party support, survived a change of government, and aims to address Canada’s demographic challenges which will see a rapidly ageing population even with

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the additional immigration by 2030. At present the country is on track to meeting its 450,000 target and may exceed it. Enterprise and Skills review Following the First Minister’s announcement in May, the Cabinet Secretary for the Economy, Jobs and Fair Work, Keith Brown, established a review of the enterprise and skills support provided by Scotland’s economic development and skills agencies. The stated aim of the review is to ensure that Scotland’s businesses, workforce, training providers, colleges and universities and young people receive the joined-up support they need. The Scottish Government’s view is that enterprise and skills agencies (Scottish Enterprise, Highlands and Islands Enterprise, Skills Development Scotland and the Scottish Funding Council) play an important role in delivering economic strategy, supporting economic development in Scotland and enabling individuals to achieve their potential. The exercise will review how to maximise individual and collective impact and effectiveness in transforming productivity. Phase 1 of the Review is now complete, and the first recommendation states ‘To bring greater integration and focus to the delivery of our enterprise and skills support to businesses and users of the skills system, we will create a new Scotland wide statutory board to co-ordinate the activities of HIE and SE, including SDI, SDS and the SFC.’ From subsequent statements in Parliament it does seem that Scottish Government intends to establish a new ‘super-board’ to oversee the operation of the existing agencies. The Scottish Government’s intention was to abolish the boards of the existing public bodies when the new ‘super-board’ is created. I will provide Court with a verbal update on the latest discussions between the sector through Universities Scotland and the Scottish Government. Items B: For Information

3. Guild of European Research-Intensive Universities In my last report, I updated Court on the formation of the Guild of European Research-Intensive Universities. I can now report that the Guild was launched at an opening symposium on Monday 21st of November in the Bibliothèque Solvay in Brussels. The Guild has now expanded to include eighteen of Europe’s leading universities from across thirteen countries. I provided Court with some context to the purpose of the Guild in my last report, but perhaps I can reassert that the Guild is committed to promoting excellence in research, teaching and learning across Europe. It recognises many of the challenges as well as the opportunities that lie ahead as it seeks to deliver on this commitment. The symposium highlighted some of the issues that will be key to the Guild’s impact: we explored and evaluated how funding is currently framed to see what effects this has on fostering excellent science and innovation. We considered how the Guild might also promote and enhance support for basic collaborative research throughout Europe, in addition to the current emphasis on applied research and the themes around Europe’s Societal Challenges in particular. We recognised that the Guild’s aims will best be met if we develop a willingness and capability for sharing information effectively, if we train and develop the skills of our students to meet future needs, and through improved dialogue with

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policy makers and those involved in HE, we better engage with our citizens and society at large to address the social and cultural divisions, and disaffection, evident across Europe. 4. Outcome Agreement - Dumfries Over the recent past, Court members have been updated on the background to and content of the University’s Outcome Agreement, which is required to be submitted to the SFC as a condition of funding. Since the last meeting and under the delegated authority of the Secretary of Court, the Outcome Agreement for the Dumfries Campus has been approved and provided to the Scottish Funding Council. 5. Key activities Below is a summary of some of the main activities I have been involved in since the last meeting of Court, divided into the usual 4 themes: Academic Development and Strategy; Internationalisation activities; Lobbying/Policy Influencing and Promoting the University; Internal activities and Communications and Alumni events. In order to cut the length of this report, I have, in the main, provided brief headings and can expand on any items of interest to Court. Academic Development and Strategy 17 October: Chaired GU/NHS Joint Strategy Group Meeting. 26 October: With SMG members, attended a ‘Come Think Session’ with PwC, which explored key risks facing the HE sector. 26 October: Hosted a visit of Matt Hutnell, Director Santander Universities, and members of his team, to sign a renewal agreement and to meet with students awarded Santander scholarships or internships. 11 November: Attended and spoke at the opening of the new Kelvin Hall facility. The First Minister was present to speak and perform the opening ceremony. 14 November: Attended the University of Glasgow Campaign Leadership Board held in London. 16 November: I was invited to give evidence to the Finance and Constitution Committee on the public finances and economic performance, including the impact of Brexit on the public finances. 21 & 22 November: Attended the launch of the Guild of European Research-Intensive Universities and Presidents General Assembly in Brussels (see under Item B, 3). 23 November: Attended the official opening of the QuantIC Innovation space. Keith Brown, the Cabinet Secretary for the Economy, Jobs and Fair Work performed the opening ceremony.

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9 December: Participated in a filmed interview in support of the Festival of Social Science, a Social Sciences project run by the University of Glasgow. Internationalisation Activities 29 October – 8 November: Extensive international trip. For the first leg, I was part of a Russell Group delegation to Shanghai China. This included a British Council Dinner; Private Roundtable with senior UK reps from the Embassy, RCUK, British Council and UKTI, which reviewed the opportunities for Russell Group Universities in China; a delegation visit to Shanghai Jiao Tong University hosted by President Jie Zhang; a Russell Group - China 9 Dialogue Co-chaired by President Jie Zhang & Professor Sir David Greenaway, which was followed by a Signing Ceremony for a RG-C9 statement; a delegation visit to Huawei and a meeting with Mr Ren Zhengfei, its President. 1 November: Travelled to India. I led a delegation representing our four Colleges to develop partnership, raise the profile of the University and support our recruitment activities. On Nov.1-2, I visited Bangalore and met with Kiran and John Mazumdar-Shaw. Kiran is Chair and Managing Director of Biocon Ltd and an Honorary Graduate of Glasgow. We also signed an agreement with the Indus group of schools. 3 November: Travelled to Delhi and on 4th delivered a lecture in the British council GREAT Lecture series entitled: Inequality: Causes & Cures. In the evening and with colleagues from Glasgow, hosted an alumni and influencers reception at the British Council, British High Commission, New Delhi. 5 November: I gave an interview with the Times of India and delivered a welcome address at an ASBS Corporate Sector event. 7 November: Attended the India-UK Tech Summit, which included the HE and Design summits (see below) and was attended by the Prime Minister and members of the UK Government. 8 November: Attended a lunch hosted by Jo Johnson, MP, Minister of State for Universities, Science, Research and Innovation Summit; the Design Education Summit; I participated in a round table of experts which included representatives from the University Grants Commission (New Delhi) (UGC), Ministry of Human Resource Development (MHRD), All India Council for Technical Education (AICTE), and the Association of Indian Universities (AIU). Lobbying/Policy Influencing and Promoting the University 13 October & 10 November: Attended USS Investment Committee Meetings. Attended a USS Board meeting on 17 November, a USS Away Day (28 November) and a USS Institutions' Meeting (1 December).

14 October: Attended and participated in a panel discussion arranged by Charlotte St Partners at a fringe event during the SNP Conference. The topic for discussion was entitled BREXIT: Where now for Scotland? and was chaired by Lindsay McIntosh, editor of the Scottish Edition of The Times.

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14 October: Met and had lunch with the Italian Deputy Head of Mission in UK, Minister Vincenzo Celeste.

14 October: Met with Mary McAllan, Director of Economic Development, Scottish Government and David McPhee, member of the Economy Committee, Scottish Government and representatives of Policy Scotland to discuss the Glasgow Commission on Growth. 18 October: Attended the Glasgow & Clyde Valley Cabinet, City Chambers. 19 October: Interviewed by Ken McDonald, BBC. 19-21 October: Travelled to Luxembourg and Brussels. The trip included a visit to the European Court of Justice, a European Free Trade Association meeting, and a roundtable meeting and discussion with members of the Trans-Atlantic Business Council (TABC). 24 October: Took part in a teleconference meeting of the Standing Council Economy and Finance sub group and on the 14 November, attended the Standing Council Education Sub Group. On 16 November, Chaired a Standing Council Meeting and on 7 December attended a Standing Council Options Group Meeting. 25 October: Participated in another Russell Group round table event for MPs on Brexit and its consequences. 26 October: Participated in SCDI/Scottish Government National Economic Forum event, as part of a business panel, which considered the EU Referendum; Reaction, Impact, Priorities and Opportunities. This followed a keynote speech by the First Minister and a Q&A session involving the First Minister and Keith Brown MSP, Cabinet Secretary for Economy, Jobs and Fair Work. 27 October: Attended an SFC Council Business Meeting. 27 October: Met with Secretary of State for Scotland and the Director of Scotland office, Francesa Osowska. 28 October: Met with the First Minister. 17 November: Attended a breakfast meeting with David Willis, Deputy Director, Devolution. 25 November: Met with Cllr Susan Aitken, Cllr David McDonald and Cllr Kenny McLean at the University and briefed them on the University and its Campus development plans. 25 November: Attended part of Newbattle Trust Meeting via teleconference. 25 November: Participated in a Scottish Government Council for Economic Advisers teleconference.

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29 November: Hosted a prize for research scientists held by the Italian Embassy in the Lodging. 2 December: Attended UUK December Meeting. 5 December: Met with Cllr MacMillan, Renfrewshire. 5 December: Attended a Milken Institute Reception and Dinner and the following day, took part in the Milken Institute London Summit on the topic: Europe in the Post-Brexit Age. 6 December: Attended sessions of the 2016 Milken Institute London Summit: People on the Move: Global Migration's Impact and Opportunity. 6 December: Met with Jo Johnson MP. 6 December: SNP MPs Briefing Event, Westminster. 7 December: Attended the House of Commons Scottish Affairs Committee to give evidence, with Michael Russell, MSP. 9 December: Chaired meeting of the Glasgow Commission on Economic Growth. 12 December: Attended the City Deal Cabinet Meeting - City Chambers. 13 December: Attended a Seminar run by Scottish Futures Trust/Policy Scotland. 13 December: Attended Dinner University of Edinburgh. Internal activities and Communications and Alumni events 13 October: Attended Alumni event held in the Barber Surgeons Hall, London. 18 October: Took part in an interview in relation to the National Student Survey, arranged by our Communications office and for internal broadcast. 27 October: Held one of my regular surgeries for staff. 11 November: Attended the James Wood Lecture and Dinner. Judge Ian Forrester of the European Courts in Luxemburg delivered the lecture: Free Movement Of Persons: The Right We Must Leave Behind? 13 November: Attended and welcomed attendees to the Remembrance Sunday service in the Bute hall. 18 November: Held our second Staff/Student Forum on Europe.

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23 November: Met with Board member and party from FC Barcelona and members of the Institut Ramon Llull who were running a roundtable in liaison with the School of Modern Languages and Cultures on the topic: Barça: Sports, Values and Identity. 23 November: Attended and chaired the Global Security Public Lecture delivered by Dr Elisabeth Kendall, Pembroke College, Oxford. Her Lecture was entitled: The Hidden Pull of Militant Jihad: On the Ground in Yemen. 24 November: Attended the Senate Guest Night where Melvyn Pond, chair of the American Alumni of Glasgow University received an honorary fellowship. The speaker was Louise Welsh. 29 and 30 November: Officiated at Winter Graduations. 3 December: Attended and spoke at the Alumni Christmas Dinner. 11 December: Attended the Service of Nine Lessons and Carols in the Chapel. 12 December: Hosted a Teaching Excellence Awards Reception in the Lodging. 6. Senior Management Group business In addition to standing and regular items the following issues were discussed:

SMG Meeting of 26 October 2016 The Agenda was reduced in order to accommodate the ‘Come think with us Session’ with PwC and a substantial discussion on the Capital Plan

Enlighten Reporting: Update REF UoA Reviews

UoA 16 Urban Studies Capital Plan: Discussion on scenarios & Estates matters

SMG Meeting of 15 November 2016 Capital Plan China strategy Skills and Enterprise Agency Board Re-Categorisation of Staff

Audit report: Value for Money: Use of Dowries

REF Reviews

UoA 15 (General Engineering)

UoA 17 A (Human Geography) Queen’s Anniversary Prize proposals

Speaker Mr David Newall Urgency LowSpeaker role Secretary of Court Timing Immediate where relevantPaper Description Report from Secretary of Court Red‐Amber‐Green Rating GreenTopic last discussed at Court Regular report to Court Paper Type Decision/Discussion/InformationTopic discussed at Committee Paper Summary Report from Secretary on a number of items for Court's discussion/decision and/or information,

as follows (A items only): Higher Education Governance (Scotland) Act – Transitional Arrangements Court meetings – administration and paperwork Vice‐Convener

Committee members present

Cost of proposed plan Topics to be discussed As above plus any B items Court members may wish to discuss

Major benefit of proposed plan

Action from Court Listed under each item: specific decisions requested under: A1 Court requested to consider details of a proposed Court and Senate Working Group to look at matters relating to future composition of Court to meet requirement of HE Governance (Scotland) Act 2016; A2 Court members interested in participating in meeting to look at Board App to contact Secretary before Christmas; A3 Court members requested to consider recommendation for Vice‐Convener of Court; B items: routine approvals: Amended Scheme of Delegated Authorities for consideration and approval; approval of Senate Assessor member of Audit Committee, also on Finance Committee

Revenue from proposed plan Recommendation to CourtDemographics Relevant Strategic Plan workstream Empowering People, Agility

% of UniversityCross University application on several items Most relevant Primary KPI it will help the university to achieve NA

Most relevant Secondary KPI it will help the university to achieve NARisk register ‐ university levelRisk register ‐ college level

Other universities that have done something similar NAOther universities that will do something similar Scottish HEIs will be reviewing composition of Court in light of HE Governance (Scotland) Act

Relevant Legislation HE Governance (Scotland) Act 2016; Enterprise Act 2002 (Student debt policy)Equality Impact Assessment

Operating stats NASuggested next steps

Any other observationsCampus All

External bodies

Competition and Markets Authority; Glasgow City Council

Conflict areas

Court Context Card ‐ Report from Secretary of Court 14th December 2016

1

Court - Wednesday 14 December 2016

Report from the Secretary of Court

SECTION A - ITEMS FOR DISCUSSION / DECISION

A.1 Higher Education Governance (Scotland) Act – Transitional Arrangements

The Higher Education Governance (Scotland) Act will come into force in the coming months. Amended arrangements for membership of both Court and Senate, arising from the Act, are subject to a transition period of 4 years. This will allow existing terms of office to expire. As previously agreed at Court, there will be as little disruption as possible to Court’s existing membership categories, retaining the membership at 25 (and no more), and retaining a clear lay majority. Annex 1 is a paper from Dr Dorothy Welch, Deputy Secretary, setting out the details of a proposed Court and Senate Working Group. If Court is content, the group will meet in the new year. Is Court content with the proposals in the paper?

A.2 Court meetings – administration and paperwork

i) Court papers app

Since the last meeting, I and colleagues from the Court Office have looked into a web-based application (app), provided by a company called Board Intelligence, that would provide Court and Committee papers in electronic format to PCs and mobile devices. Some members are already receiving papers by file transfer from the Court Office, which enables a tabbed pdf of Court papers to be downloaded onto devices. The app provides additional functionality by way of layout and indexing, and also allows notes to be added on-screen.

In order for a user assessment of the app to be undertaken, it is suggested that a small cross-section of Court members meet the app provider in January, to make a decision about whether we invest in the system.

If Court agrees to this approach, please could those interested in joining this group contact me before the Christmas break.

ii) Court meeting day and time

From time to time Court Office has canvassed members’ opinion on what the preferred timing is for Court meetings. We will do this once again early in the New Year, to establish if members are content with the current

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arrangements, or if there are suggestions for alternative days/times to the current Wednesday 2pm meetings.

iii) Feedback

Following each meeting, Court members will be contacted by the clerk by e-mail for any feedback on the meeting. Please take the opportunity to make any comments about processes/paperwork etc., and any suggestions for improvements, which will be discussed with the Convener.

A.3 Vice-Convener

At the last Court meeting, Court agreed arrangements relating to a Vice-convener of Court and Vice-chairs of Court Committees being appointed.

The Vice-convener of Court will deputise for the Convener of Court in her absence. The Vice-convener is to be appointed by Court on the nomination of the Convener. The convener has nominated Graeme Bissett to undertake the role.

Is Court content to approve this nomination?

SECTION B – ITEMS FOR INFORMATION / ROUTINE ITEMS FOR APPROVAL

B.1 Scheme of Delegated Authorities

The Scheme of Delegated Authorities formally sets out where responsibilities lie in the University across the main areas of activity. The current Scheme was adopted by Court in 2007 and updated in 2010. It has been reviewed and refreshed.

B.2 Vice-Chairs

At the last Court meeting, Court agreed arrangements relating to a Vice-convener of Court and Vice-chairs of Court Committees being appointed.

The Vice-chairs of each Court committee will deputise for the Chair in his/her absence. The Vice-chair will be appointed by the Committee, on the nomination of the Chair. Court has agreed that the Vice-chair of any Committee will be drawn only from lay members of Court. The following have been appointed:

Estates Committee: David Milloy appointed as vice-chair.

Finance Committee: Graeme Bissett appointed as vice-chair.

Remuneration Committee: June Milligan appointed as vice-chair.

Vice-chairs have still to be appointed for the Audit; Health, Safety & Wellbeing; and HR Committees.

B.3 Competition and Markets Authority: Student Debt

At the last meeting, Court heard that the Competition and Markets Authority (CMA) had advised in the summer that, in its opinion, the University’s use of academic sanctions to enforce a non-tuition fee debt was unlawful and had

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requested that the University amend its debt policy. In common with most other UK universities, Glasgow has historically applied an academic sanction (refusing to allow students to graduate, or to progress to the next level of study) in a situation where, following extensive correspondence, a student has failed to clear debt due to the University.

As previously advised, the Director of Finance and I, together with the University’s lawyer, met with the CMA in August, and challenged the CMS about its contention that the debt policy was illegal. In October, Court authorised us to enter into further discussion with the CMA, in the hope that discussions might arrive at a satisfactory way forward. Court agreed that, should the terms of a new draft debt policy be acceptable to CMA, Court would consider those terms by email, rather than await the December meeting.

Following further discussion with CMA, we proposed that the current Clause 13.1 in the University Calendar be replaced by a new clause, which states that academic sanctions will be applied only in respect of tuition fee debt. CMA is content with the revised wording of Clause 13.1 and Court has approved it between meetings.

As I advised Court in October, while the new policy is acceptable to CMA, it will unfortunately involve the University having to consider the application of new debt collection sanctions in future - including penalty payments and, in the case of residential accommodation debt, eviction.

B.4 Nominations Committee business

i) Court Co-opted member

A Co-opted position on Court was advertised in October, to replace Margaret Morton. Nominations Committee had agreed that, in advertising this post, we should seek to attract individuals with experience in higher education strategic management. No suitable applications were received by the deadline of 4 November. I will therefore liaise further with Nominations Committee with a view to making an appointment to this vacancy early in the new year.

ii) Audit Committee

At Court’s last meeting, it was agreed that a Senate Assessor would be appointed to the Audit Committee. Dr Duncan Ross was proposed as the appointee and attended the November meeting.

Duncan is also a member of the Finance Committee, and the Audit Committee’s remit says that “Members of the Committee will not normally also be members of the Finance Committee, except with the express approval of the Court.”

This matter has been discussed by the Convener, the Secretary and the Chair of Audit Committee, all of whom would like to confirm Duncan’s appointment to Audit Committee.

Is Court willing to give the necessary approval?

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iii) Remuneration Committee

Since its last meeting and on the recommendation of the Nominations Committee, Court has approved the appointment of June Milligan to the Remuneration Committee, with effect from 1 November 2016.

B.5 New Court members

Since the last meeting, two new Court members have been appointed. Lauren McDougall was elected as SRC Assessor, succeeding Morag Deans; and Cllr Helen Stephen was appointed by Glasgow City Council, replacing Cllr Pauline McKeever.

B.6 Election of Rector

Edward Snowden’s term of office ends in March 2017. The student body will elect a successor in February. The Rector continues to be the 'ordinary president' of Court - in the words of the Universities (Scotland) Act 1858 - and has a deliberative and a casting vote. Within the terms of the Higher Education Governance (Scotland) Act 2016, the Convener will remain responsible for the leadership and effectiveness of the governing body, and for ensuring that there is an appropriate balance of authority between the governing body and the Principal. The Convener will also continue, per Court’s Standing Orders, to undertake the other responsibilities associated with the chairing of a governing body.

B.7 Review of Code of Good HE Governance

The current Governance Code for Scottish Higher Education was published by the Committee of Scottish Chairs in July 2013, and at the time of publication, the chairs committed to a review of the Code after 3 years. As previously advised, a Review Committee has been established, whose evidence-gathering process has included consultative visits to each of the Scottish HEIs to hold a set of structured meetings. The outcome of the review is now expected in the first quarter of 2017.

B.8 Risk Management Processes

At the last meeting, and following a recommendation from the Audit Committee, Court received a copy of the University Risk Register. At the meeting, Court provided some comments on the format, including a suggestion that more specific detail should be included about what gives rise to some of the (more generalised) risks listed; and that a RAG classification might be applied. I have since received further comments.

I will discuss this topic with the chair of the Audit Committee, Heather Cousins, and will report to the February meeting of Court.

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Annex 1 Implementation of Higher Education Governance (Scotland) Act 2016 Although there is not yet a Commencement Date for the Act it is proposed that work is begun within the University to address the composition of Court that is required by the Act. At its meeting on 13 April 2016, Court agreed that there would be as little disruption as possible to Court’s existing membership categories, retaining the membership at 25 and retaining a clear lay majority. The implications of that were to focus on the number of internal (Senate, employee and Trades Union) members. It was agreed that liaison would take place with Senate about possibilities and options to effect the required changes to the composition of Court and that, to enable that, the Principal has proposed that a joint Court and Senate Working Group is established to take forward that discussion. Senate has made considerable progress in addressing its own composition to be compliant with the Act with preliminary recommendations from its Working Group on Governance being considered at its first meeting of 2016 on 6 October. It is now proposed to establish a joint Court and Senate Working Group to consider staff membership of Court, including appropriate input from the trades unions. The terms of reference of that Group are:

To consider the requirements of the Higher Education Governance (Scotland) Act 2016 with regard to the composition of staff (i.e. Senate, employee and Trades Union) members of Court

To make recommendations to Court on the number of staff members of Court in each category such that it is compliant with the Higher Education Governance (Scotland) Act 2016 while having a lay majority

To make recommendations on how staff members should be elected To consult with relevant staff groups and Trades Unions in forming

recommendations.

The proposed membership of the Working Group is as follows: Court: Dave Anderson, Graeme Bissett, Heather Cousins, Morag McDonald-Simpson Senate: Marc Alexander, John Briggs, Karen Lury, Duncan Ross DAW 21.11.16

Speaker Ken Brown Urgency HighSpeaker role Finance Committee Convener Timing ImmediatePaper Description Finance Commtitee report to Court Red‐Amber‐Green Rating GreenTopic last discussed at Court Oct‐16 Paper Type Decision/Information/DiscussionTopic discussed at Committee Nov‐16 Paper Summary / Topcis to be discussed Action from CourtCommittee members present CA/2016/22. Draft University Financial Statements ‐ Finance

Committee noted a final operating surplus for 2015/16 of £13.5m (£23.7m before exceptional items and tax), £12.2m ahead of the original budgeted surplus. Finance Committee agreed to recommend the Financial Statements to Court for approval. Attached for approval Annex 1CA/2016/23 ‐ 28. Draft accounts for University Trust and subsidiary companies ‐ Finance Committee received draft accounts from the University Trust and the following subsidiary companies: GU Holdings Limited, GU Heritage Retail Limited, Kelvin Nanotechnology Limited, UGlasgow Singapore Pte Limited, and UOG Utilities Supply Company. Finance Committee agreed to recommend the accounts to Court.CA/2016/31. Learning and Teaching Hub: Full Business Case ‐ Finance Committee agreed to recommend the project to Court.CA/2016/32. Capex Application: Water Source Heat Pump ‐ Fees. Finance Committee approved the application. For noting

Cost of proposed planCA/2016/34. Finance Committee noted the endowments investment reports, attached.

Major benefit of proposed planCA/2015/35. Finance Committee noted a report on overview of performance as at 30 September 2015, attached.

Revenue from proposed plan Recommendation to Court

Finance Committee RECOMMENDS financial statements/subsidiary accounts/Learning & Teaching hub

Demographics Relevant Strategic Plan workstream Agility, Focus% of University 100% students Most relevant Primary KPI it will help the university to achieve Cash generation

100% staff Most relevant Secondary KPI it will help the university to achieveRisk register ‐ university level 5. Financial ResourceRisk register ‐ college level N/A

Other universities that have done something similarOther universities that will do something similar



Any other observationsCampus AllExternal bodiesConflict areas

Court Context Card ‐ Finance Committee Report 14 December 2016

Court members present at last meeting: Graeme Bissett, Ken Brown, Carl Goodyear, Ronnie Mercer, Margaret Morton, Elspeth Orcharton, Duncan Ross

1

DRAFT

University of Glasgow

Finance Committee

Minute of Meeting held on Wednesday 16 November 2016

Melville Room

Present:

Mr Graeme Bissett, Mr Ken Brown (Convener), Mr Robert Fraser, Dr Carl Goodyear, Prof Neal Juster, Mr Ameer Ibrahim, Ms Elspeth Orcharton, Dr Duncan Ross, Mr Iain Stewart

In attendance:

Mrs Ann Allen, Mr Gregor Caldow, Mr Ronnie Mercer, Ms Margaret Morton, Mr David Newall, Ms Fiona Quinn

Apologies:

Ms Heather Cousins, Prof Anton Muscatelli, Ms Elizabeth Passey

CA/2016/17. Farewell and Welcome

The Convener thanked Margaret Morton for her contribution to the Committee over many years, noting that this was to be her final Finance Committee meeting.

The Committee welcomed Elspeth Orcharton and Ronnie Mercer to their first meeting.

CA/2016/18. Minutes of the meeting held on Wednesday 14 September 2016

The minutes of Finance Committee held on 14 September 2016 were approved.

CA/2016/19. Matters arising

CA/2015/79. Private Placement / GSV

Finance Committee received a paper outlining the details of the accounting of the GSV transaction as reflected in the annual accounts. The meeting agreed that this paper better explained the reasons behind the accounting.

CA/2016/20. Conflict of Interest

No new conflicts of interest were noted.

Before commencing the meeting, the Convener noted his dissatisfaction with the late issue of the meeting papers. He proposed an extension of 48 hours to the meeting, so that any members who wished to raise further comments or questions could do so via email by the end of the day on Friday 18 November. This would hopefully allow those who had not had sufficient time to read and consider the papers to do so.

The Secretary of Court offered an apology from all concerned for the late circulation of papers. Steps would be taken to avoid this happening in future.

Finance Committee Wednesday 16 November 2016

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CA/2016/21. Accounting Policies Comparison (paper 5.1)

The Committee received a paper setting out changes to accounting policies. The Committee noted that the main changes were around revenue and related to the new financial reporting standard FRS 102.

Finance Committee noted the paper.

CA/2016/22. Draft University Financial Statements at 31 July 2016 (paper 5.2)

Finance Committee received the Draft University Financial Statements for the year to 31 July 2016. The Committee noted a management accounts surplus for 2015/16 of £23.7m, £12.2m higher than the original budget. The statutory accounts surplus after exceptional items and tax was £13.5m. The main operational movements included: staff savings of £6.3m, £2.4m increase in tuition fees and increased other income of £2.4m. The Committee noted the additional movements which brought the statutory accounting surplus to £13.5m, including GSV (charge of £21.9m), pensions (charge of £3.5m), £6.6m increase in endowments and £6.7m positive impact of FRS 102.

At year end, cash and deposits totalled £194m, an increase of £40.2m in the year.

The Committee discussed the reporting standard FRS 102 and its impact on the financial statements. Because a year on year comparison is required to be shown in the accounts, the 2015 financial statements had been restated. There was a discussion around the presentation of the restated accounts for 2015. It was noted that due to the treatment of donations, grants and contracts under FRS 102, there would be increased volatility showing in the Income and Expenditure account.

The Committee noted capital expenditure for 2015/16 of £75.8m, an increase of £11.2m compared to 2014/15. The capital spend was split £17.1m on GSV, £47.3m on land and buildings, and £11.4m on equipment.

There were comments from members of the Committee on the wording of some sections. It was suggested that a reference to the University’s contribution to addressing the attainment gap could be included. The meeting also noted that the explanation of the GSV transaction was expressed in financial terms and did not bring out the underlying commercial reasons for the deal. The Director of Finance agreed to re-look at the wording, and recirculate a draft.

The Committee discussed the potential volatility which the new accounting rules may bring, and the consequent loss of comparability between periods. A greater focus on the cash generation result may provide a more satisfactory appraisal of the surplus or deficit in future periods.

The Convener congratulated all concerned for their work in achieving such a positive financial outcome for 2015/16.

Finance Committee agreed to recommend the Financial Statements to Court for approval.

CA/2016/23. Draft Accounts for GU Holdings Limited as at 31 July 2016 (paper 5.3)

Finance Committee received draft annual accounts for GU Holdings Limited to 31 July 2016. GU Holdings exists to hold University investments in spin-out companies – the Committee noted that the Cara Therapeutics investment was still being held. GU Holdings reported an operating profit of £205,241 in 2015/16, as compared to a loss of £37,168 the previous year. Net current assets stood at £495,010 at 31 July 2016 (£181,457 at 31 July 2015).


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Finance Committee agreed to recommend the accounts to Court.

CA/2016/24. Draft Accounts for GU Heritage Retail Limited as at 31 July 2016 (paper 5.3)

The Committee received a draft report and financial statements for GU Heritage Retail Limited. The company's trading position had improved on the previous year, with the operating profit up from £132,001 to £152,731. After the transfer of Gift Aid to the University, this translated into a net profit of £27,230.


CA/2016/25. Draft Accounts for Kelvin Nanotechnology Limited as at 31 July 2016 (paper 5.3)

Draft accounts for Kelvin Nanotechnology for year 2015/16 were presented to Finance Committee. The Committee noted the principal activity of the subsidiary was electronics and electrical engineering. Kelvin Nanotechnology Limited reported a profit of £223,186 in 2015/16 compared to a loss of £118,836 in 2014/15.

Finance Committee agree to recommend the accounts to Court.

CA/2015/26. Draft Accounts for UOG Utilities Supply Company as at 31 July 2016 (paper 5.3)

The Committee received the accounts from UOG Utilities Supply Company for the period to 31 July 2016. The Committee noted that the Company’s principal activity was the provision of utilities to the University and was set up in order to install the University’s combined heat and power (CHP) system.

The Committee noted a profit for 2015/16 of £10,361. The net asset position at 31 July 2016 was £19,008,099 and net current assets amounted to £2,141,701.


CA/2016/27. Draft Accounts for UGlasgow Singapore Pte Ltd as at 31 July 2016 (paper 5.3)

The Committee received the accounts from UGlasgow Singapore Pte Ltd to 31 July 2016. The Committee noted the after tax profit of $687,434 (Singapore dollars) which had fallen from $820,660 for 2014/15.

The cash balance of $4.26m was held in Singapore dollars. A dividend of $2m (Singapore dollars) had been declared and paid during 2014/15.


CA/2016/28. Draft Accounts for University of Glasgow Trust as at 31 July 2016 (paper 5.3)

Finance Committee received draft accounts for University of Glasgow Trust. It was noted that the Trust existed to receive and hold funds raised by the Development and Alumni Office, or other funds bequeathed or given to the Trust for charitable purposes, and disburse them for the benefit of the University of Glasgow.

The Committee noted that donors to the University were now being encouraged to make donations direct to the University itself rather than the Trust. The Trust would remain open with a reduced number of Trustees in order to receive future bequests and any other philanthropic donations which were directed to it. The likelihood therefore was that the income and disbursements of the Trust would continue to decline over time.


4

The Committee noted that the Trust disbursed a total of £5,981,367 in 2015/16. This included £5,756,367 from restricted income and £225,000 from unrestricted income including an unrestricted legacy of £75,000. This represented a decrease from disbursements of £7,308,851 in 2014/15.


CA/2016/29. Draft US GAAP Accounts and UK to US GAAP reconciliation (paper 5.3)

Finance Committee received a draft set of financial statements prepared in accordance with the United States Generally Accepted Accounting Principles (US GAAP) for submission to the US Higher Education Department, along with a report on the position regarding the audit of these financial statements. From November 2010 the US Department of Education had begun enforcing the requirement for restated financial statements.

It was noted that Court did not receive the US GAAP accounts for approval and there was no requirement for representatives of the University to sign the US GAAP accounts. Ernst & Young, as the University’s auditors, would be required to provide a signed audit opinion.

Finance Committee noted the US GAAP accounts.

CA/2016/30. Progress on Capital Plan

Professor Juster gave a presentation on the development of the Capital Plan. Finance Committee noted that the Senior Management Group were close to agreeing the overall shape of the plan which would be presented to Court in December.

Professor Juster outlined a proposal for the phasing of delivery of new buildings on the Gilmorehill campus and the former Western Infirmary site. He noted that Finance Committee and Court would be asked to give consideration to the appropriate pace of development. He flagged up various factors for consideration, including: construction inflation; interest rates; and the arguments for creating a coherent campus relatively quickly.

Finance Committee welcomed the presentation, discussed the proposed phasing of the plan and noted the progress which had been made. Court would consider the Capital Plan at its meeting in December.

CA/2016/31. Learning and Teaching Hub: Full Business Case (paper 5.5.2)

Finance Committee received a paper setting out the full business case for the Learning and Teaching Hub. The Assistant Director of Estates and the Deputy Secretary joined the meeting, and the Deputy Secretary gave a presentation on the Hub in her capacity as Convener of the Governance Board. She reminded the Committee of the pressing need for the new Hub: there was huge pressure on space for both teaching and learning; the ratio of study spaces to students was well behind the HEFCE recommendation; and the Hub represented an opportunity to transform and improve teaching methods and delivery. The Committee noted the continuing growth in student numbers and the importance of tuition fee income as a proportion of total income. The Hub would create the capacity for the necessary future growth in student fee income.

The presentation went on to outline the functionality and design of the building and how it would help to deliver the University’s strategic ambitions in learning and teaching, enhancing the student experience and improving competitiveness.

The Committee noted the total project cost was estimated at £86m or £97m, dependent on which firm was employed as the principal delivery partner.


5

There was a period of discussion. Committee members spent some time discussing the risk register and the potential opportunity to undertake cladding works on the Boyd Orr Building concurrently with the Learning and Teaching Hub project.

Committee members were keen to understand the large variance in the cost envelope. The Director of Estates explained that this reflected the different approaches to risk being adopted by the two potential delivery partners. It was noted that the final prices would be received at end of January 2017.

Finance Committee agreed to recommend the project to Court.

CA/2016/32. Capex application: Water Source Heat Pump (paper 5.5.3)

Finance Committee received a capital expenditure request for £658k for design fees, site investigations and other costs associated with the development of a Water Source Heat Pump through to the submission of planning application and procurement of a contractor. The primary objective of the project was to provide a resilient heat source to the campus expansion, supplementing the district heating system in an energy efficient way, using a renewable source of heat and reducing carbon dioxide emissions, thus contributing to the University’s carbon reduction targets.

The Committee noted that the total anticipated project cost was £6.1m.

In response to questions from the Committee, the Director of Estates confirmed that there was a cautious view currently of the details of what could be achieved in terms of heat generation. However at the same time it was felt that the project presented a significant opportunity which should be explored.

The Director of Estates confirmed that if the decision was taken to commit design fees, the project would be monitored by the Masterplan and Infrastructure Delivery Board, and could be stopped at any time. She clarified that a £2m Scottish Government grant was available as part-funding, and confirmed that there was scope in the Capital Plan under the banner of infrastructure to undertake this project. The University would be eligible for a further £8.1m grant from OFGEM over a period of 20 years as part of the Renewable Heat Incentive scheme should the project be successful and deliver the outputs. It was noted that there was to be a re-review of the project once £150k was spent. It was suggested that the Committee only approve this sum now, and the balance be brought forward for approval later. The Director of Estates stated that this function would be carried out by the governance board.

Finance Committee approved the application.

CA/2016/33. Going Concern Review (paper 5.6)

Finance Committee received a paper on the University’s going concern review, covering the period July 2016 to December 2017.

The Committee noted that the purpose of the review was to assist in the assessment of the University’s ability to continue to adopt the ‘going concern’ basis of accounting. According to the guidance provided by the FRC, directors should consider a period of at least 12 months from the date of authorisation of the financial statements.

Committee members provided some comments on the review and noted the paper.

CA/2016/34. Endowments Investment Reports (paper 6.1)

Finance Committee noted the Endowments Investment reports as at 30 September 2016.


6

CA/2016/35. Overview of Performance as at 30 September 2016 (paper 7.1)

The Group Financial Controller presented the overview of performance for Period 2. Finance Committee noted that this was the first month when the management accounts were presented under the accounting standard FRS 102.

The Committee was reminded of the changes brought about by FRS 102: donations are recognised on receipt and capital grants are recognised when conditions are met, typically on purchase of equipment, whereas previously this income would have been matched to expenditure or spread over the life of the project. Therefore greater volatility is introduced into the Income & Expenditure Account.

The Year to Date surplus under FRS 102 stood at £21.9m, £2.7m ahead of the Year to Date budget. The projected surplus at full year stood at £29.8m, in line with budget. The Committee noted that salaries and consumables were already under budget. Salaries were being looked at to see if reforecasting is required.

The Committee noted net funds at Period 2 were £223.1m, representing a cash inflow of £39.4m for the year to date.

CA/2016/36. Debtors Reports as at 30 September 2016 (paper 7.2)

Finance Committee received an update on debtors as at 30 September 2016. Overall debt stood at £105.86m in comparison to £116.78m at September 2015.

Overall student and sponsor debt was lower than prior year, totalling £87.6m at 30 September 2016 compared to £99.69m at 30 September 2015. Regular contact was being maintained with the Libyan Embassy in order to mitigate against the risk of high levels of sponsor debt accruing.

Commercial debt totalled £14.33m at 30 September 2016 compared to £14.41m at September 2015.

CA/2016/37. Consumables Reports as at 30 September 2016 (paper 7.3)

Finance Committee noted an analysis of spending on consumables for 2015/16.

CA/2016/38. Cash Balances Report as at 1 November 2016 (paper 7.4)

The Committee received a summary of cash balances and noted total balances of £228,294,925 at 1 November 2016. The Director of Finance noted that there may be a future request to the Committee with regard to introducing increased flexibility to hold greater amounts with certain banks.

Finance Committee noted the report.

CA/2016/39. Date of next meeting

Wednesday 18 January 2016, 2pm, Melville Room.

Prepared by: Fiona Quinn, Clerk to Committee, [email protected] Last modified on: Tuesday 29 November 2016

CONTENTS

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Reports and Financial Statements 2015-16

Reports Page 2-8 Operating and Financial Review 9-10 Corporate Governance Statement 11 Statement of the Responsibilities of Court 12 Membership of Court 13 Independent Auditor’s Report to Court Financial Statements Page 14-17 Statement of Principal Accounting Policies 18-19 Consolidated and University Income Statements 20 Consolidated and University Statements of Comprehensive Income 21 Consolidated and University Statements of Changes in Equity 22 Balance Sheets 23 Consolidated Cash Flow Statement 24-53 Notes to the Financial Statements

Charity number: SC004401

OPERATING AND FINANCIAL REVIEW For the year ended 31 July 2016

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This Operating and Financial Review describes the main trends and factors underlying the University of Glasgow’s (“the University’s”) performance during the year to 31 July 2016 (“2015-16”). History The University is the fourth oldest University in the English speaking world. Founded in 1451 it has earned an international reputation for research innovation, for connecting with experts in global business, and for inspiring thinkers from the father of economics Adam Smith to the eminent scientist Lord Kelvin. Building on such vast experience, the University is a member of the elite Russell Group of 24 major research universities and is in the top 1% of the world’s universities today. Principal operations Study and research are grouped into four Colleges which are made up of broadly related Schools and Research Institutes. The Colleges are:

• College of Arts; • College of Medical, Veterinary and Life Sciences; • College of Science and Engineering; • College of Social Sciences

The majority of operations are carried out on the University’s main Gilmorehill campus in the west end of Glasgow. The University educates more than 18,100 undergraduate students, 7,500 postgraduate students and over 3,500 adult learners. Finding community within diversity, the University attracts students from more than 140 countries, as well as academics from around the globe. In addition, as a venue for international conferences and a hub of cultural interest, the University is also a major contributor to the cultural and commercial life of the country. Constitution, governance and regulation Founded by Papal Bull in 1451, much of the University’s modern constitutional framework derives from the Universities (Scotland) Act 1966, which updated and expanded on the Universities (Scotland) Acts 1858 to 1932. These Acts make provision for the main statutory bodies and officers of the University - the Court, the Senate, the General Council, the Chancellor, the Principal and Vice Chancellor, and the Rector - and set out the powers and duties of the statutory bodies and officers, as well as specifying the composition of the statutory bodies. From 1858 until 1966 the University exercised its powers using Ordinances. These were drafted by the University and given legal authority by the Privy Council after approval by the General Councils of the other Scottish Universities. The Universities (Scotland) Act 1966 enabled the University to exercise its powers using Resolutions and Procedures. Resolutions are issued by the University Court of the University of Glasgow (“Court”) after consultation with the University. Procedures are as determined by Court. In a few areas, mainly of constitutional import, Ordinances are still required. Court is responsible for the management and regulation of the financial affairs of the University, ensuring compliance with the Financial Memorandum and associated guidance as published by the Scottish Further and Higher Education Funding Council (“Scottish Funding Council”). A full statement of Court’s responsibilities, membership and corporate arrangements is detailed within these reports and financial statements. The University is a charity and is registered with the Office of the Scottish Charity Regulator under number SC004401. The Principal is the chief executive officer appointed by Court who is directly accountable to the chief executive officer of the Scottish Funding Council for the University’s proper use of funds.

Inspiring People – Changing the World In 2015 the University published its new 5-year strategy, Inspiring People – Changing the World. The strategy articulates a new vision for the University – to be a world-class, world-changing university, complementing a new mission to bring inspiring people together and create a world class environment for learning and research, empowering staff and students alike to discover and share knowledge that can change the world. The strategy is articulated across three key sections: People: the University wants to be regarded among the very finest higher education institutions in the world. For that to happen, it needs to attract the best of the best – staff and students alike. The people section details the University’s strategy to attract world-class staff and talented students from every corner of the globe, and connect with the finest minds worldwide through international partnership and cooperation. Place: The University wants to provide an internationally excellent environment which inspires its staff and students as world-class learners, researchers and professionals. The place section details its vision for world-class supporting infrastructure realised through cutting-edge facilities, best in class systems and outstanding professional support functions. Purpose: The University exists to discover world-changing knowledge and then share it with students and society at large. The purpose section articulates its vision for internationally excellent teaching, globally significant research, and local and global civic engagement that has tangible benefits and impact for communities. Inspiring People identifies 9 primary and 13 secondary key performance indicators (KPIs) to assess the University’s progress and performance over the 2015 – 2020 strategic period. The KPIs encompass research, the student experience, internationalisation, staff satisfaction, financial health and efficiency of the estate. The University has further established three working groups to take forward the strategy over the course of the 2015 – 2020 period and is in the process of developing an action plan to complement this work. The Student Experience The University’s outstanding reputation for research, learning and teaching, and its investment in facilities is contributing to making the University an attractive choice for the best undergraduate and postgraduate students from across the globe. The University has a sustained track record of high achievement in student satisfaction, which remains towards the upper end of the sector. While the University experienced a slight dip in satisfaction this year as measured by the National Student Survey (NSS) it remained at the upper end of the sector at 89%, placing the University joint third in Scotland and joint seventh in the Russell Group. Moreover, satisfaction scores within the biennial Postgraduate Research Experience Survey were shown to have increased at the time of the last survey (2015). However, the University is not complacent about the dip in the NSS satisfaction score and all areas of the University are being asked to contribute to a new action plan for further enhancements to the student experience, particularly with regard to assessment and feedback (an area of low satisfaction across the HE sector) and teaching infrastructure, which will experience a significant boost from the University’s campus redevelopment plans in the coming years. While not a direct measurement of student satisfaction or the student experience, the University’s performance in national and international league tables is an important indicator of

OPERATING AND FINANCIAL REVIEW Continued

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overall quality of provision. The University’s international league table position has fluctuated in recent years with Glasgow now placed 62nd in the QS World University Rankings (2015: 62nd, 2014: 55th), 88th in the Times Higher Education league table (2015: 76th, 2014: 94th), and at its highest ever placing in the Shanghai Jiao Tong global tables. Glasgow’s position in the domestic league tables remains relatively static, being placed between 24 and 30 in the three main UK tables (The Guardian, The Independent, The Sunday Times/Times). Recruitment The University met its Scottish domiciled and EU undergraduate recruitment target for 2015-16 whilst maintaining the high average qualification tariff for new students that the University has held for the last five years. The University had the 10th highest entry tariff in the Russell Group in 2014-15 (2015-16 data not yet available). The University has also had significant success in recruitment to taught postgraduate programmes; numbers grew by 30% in 2015-16. Research The University continues to win competitive research grants and in 2015-16 the University's research order book beat the previous high point set in 2014-15 by 1.5%. This growth has been facilitated by recent investments in research facilities and the recruitment of research leaders. In addition, studentship and fellowship schemes, many of which are supported by external fundraising, continue to attract research students and early career researchers to the University. The University's focused investment in research leaders and early career researchers also led to a greatly improved performance in the 2014 Research Excellence Framework assessment (REF2014) when compared with the previous exercise conducted in 2008. The REF2014 outcomes showed that the power of the University’s research (overall quality multiplied by volume) placed it 12th in the UK and 2nd in Scotland. The percentage of research judged to be ‘internationally excellent’ or better rose from 56% in 2008 to 81% in 2014. The percentage of research judged to be ‘world leading’ – the top category – has doubled to 31%. Plans have been articulated to ensure these improvements are built upon towards the next assessment exercise expected in 2020. Internationalisation The University has seen steady year on year increases in entrants by students from outside the EU over the past few years, with applications for entry in 2016-17 currently on target. Our success in attracting international students to Glasgow reflects the efforts put into marketing and the promotion of a wide range of international activities over the past five years. The University continues its partnership with Glasgow International College (“GIC”) to offer academic skills and English language courses preparing international students for entry to the University’s undergraduate and postgraduate programmes. Applications to GIC continue to grow. The University’s international student community has shown its satisfaction with the quality of education and support available at the University, recording very impressive results in the International Student Barometer for the past few years. According to the most recent survey, the University’s international students remain amongst the most satisfied students studying at UK universities. In recent years the University has established a number of partnerships to enable students to gain a University of Glasgow degree overseas whilst being taught by University of Glasgow staff. These partnerships are with: Singapore Institute of

Technology (Singapore) offering undergraduate degrees in Engineering, Computer Science and Nursing; UESTC (Chengdu, China), undergraduate Engineering; and Nankai University (Tianjin, China), postgraduate degrees in Environmental Management, International Relations, and Urban and Regional Planning. The University has comfortably hit its Trans National Education (TNE) targets for 2015-16, with over 1,250 students studying for Glasgow degrees in these locations. Further growth is anticipated in 2016-17 and talks continue with all partners to expand the range of degrees on offer. Outcome Agreements During 2012-13, in return for the increased financial settlement to the HE sector, the Scottish Government indicated that it expected the SFC to ensure that improved outcomes are delivered by universities across the following areas: retention, articulation from college, accelerated degrees, access to university for people from the widest possible range of backgrounds, pattern and spread of provision, efficiency in the learning journey and of institutions, international competitiveness in research, university/industry collaboration, and entrepreneurial and employability skills of graduates. In response, the SFC implemented Outcome Agreements with each university. Each outcome agreement contains targets that will enable the SFC to detail and report improvements back to the Scottish Government. The University’s 2015-16 outcome agreement was the second year of a 3-year agreement that focussed on the following areas: knowledge exchange, research, skills growth, coherent provision and widening access. Widening Participation Widening Participation remains a prominent and important strategic area for the University of Glasgow. We continue to significantly exceed the MD20 recruitment targets agreed with the SFC whilst remaining within our overall student recruitment cap. This has been achieved by focusing on low progression schools and MD20 residents through specifically designed pre-entry widening participation programmes. Of particular importance has been the focus on increasing the intake to professional degrees by continuing to develop the Reach Programme. This programme now engages 3,500 pupils annually across S4-S6 and has delivered substantial increases in participation from 16% of intake for Dentistry to 27%, and 15% of intake for Medicine to 27%.


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Income and expenditure These are the University's first financial statements prepared in accordance with the new Financial Reporting Standard 102 (“FRS 102”) and the new Further Education and Higher Education SORP (2015 SORP). The results for 2016 have been prepared under the new standard and the 2015 financial statements have been restated on the same basis. The transition to FRS 102 results in some significant adjustments to the financial statements which are explained in more detail in note 26 on page 46 with major adjustments also summarised below. The figures shown below and throughout the operating and financial review are the restated numbers post FRS 102 adjustments unless otherwise stated. Overall the University enjoyed another successful year financially as follows:

2016 £000

2015 £000

Total income 579,934 545,377 Total expenditure (549,104) (546,115) Surplus /(deficit) after depreciation of PPE at valuation and before exceptional items

30,830

(738) R&D tax credits (“RDEC”) and deferred capital grants released

2,618

26,384

Contract cancellation expense

(21,903)

- Surplus before other gains

11,545

25,646

The graph below shows the trend in operating surplus over the last five years, including the FRS 102 impact on the financial statements for 2014-15 and 2015-16:

2011-12 2012-13 2013-14 2014-15 2015-16

Pre FRS 102 Post FRS 102

10.3 11.0

20.8

-0.7

30.8£m - Operating Surplus excluding exceptional

items - Five Year History28.7

22.6

The total movement from 2014-15 to 2015-16 can be split into movement in the underlying results (pre FRS 102) and the year on year movement in FRS 102 adjustments. The FRS 102 adjustments for each year are summarised in a graph and explained in further detail on pages 5 to 6. Total underlying income (pre FRS 102) excluding exceptional items increased by £21.0m or 3.9% from 2014-15 to 2015-16. The year on year movement in FRS 102 adjustments during this period resulted in an increase in income of £13.6m to bring total income to £579.9m. The main movements are as follows: • The underlying income from funding body grants

decreased by £1.7m or 1.0% in 2015-16 (2014-15 increase 0.5%) following a strategic grant from the Scottish Funding Council coming to an end in 2014-15. The year on year movement in FRS 102 adjustments was

minimal and resulted in a decrease in income of £0.2m. These two items combined resulted in a fall in total income of £1.9m or 1.2% from funding body grants;

• Income from tuition fees and education contracts grew by £18.7m or 13.1% to £161.6m (2014-15: £142.9m). The largest movement was in overseas students, with income growing by 19.2% (2014-15: 8.7%). There was no impact from FRS 102;

• The underlying income from research grants and contracts rose by £8.0m or 5.3% in 2015-16. The increase in research grants and contracts is due to an overall rise in successful grant applications as well as income of £2.0m received for the Quantum Technology Hub. The year on year FRS 102 adjustments increased income by £3.9m. This was as a result of additional income recognised under the performance conditional model offset by the reversal of deferred capital grants. The underlying increase and the year on year movement in FRS 102 adjustments resulted in an overall increase in total income from research grants and contracts excluding R&D tax credits (RDEC) of £11.9m or 7.3%;

• Following the introduction of legislation in the Finance Act 2013, large companies were allowed to claim R&D relief as a tax credit of 10% of qualifying expenditure. These credits were withdrawn from universities after 2014-15 resulting in a drop in RDEC recoveries to £2.6m in 2015-16, being the recognition of the finalisation of prior period estimates (2014-15: £20.4m);

• Underlying other income increased by £1.5m or 2.1%. The main movement primarily related to growth in income of £0.9m in the income recorded by the subsidiary, Kelvin Nanotechnology Ltd. The year on year FRS 102 adjustments increased income by £4.4m this was again due to additional income recognised under the performance conditions method. The underlying movement and year on year FRS 102 adjustments combined resulted in an increase in total other income increased of £5.9m or 8.5%;

• Endowment and investment income increased by 1.4%.

Total underlying expenditure excluding exceptional items increased by £24.6m or 4.7%. The year on year movement in FRS 102 adjustments resulted in a decrease in expenditure of £21.6m to bring total expenditure to £549.1m. The main movements are as follows:

• The underlying expenditure for staff costs increased by £13.1m or 4.7% in 2015-16 (2014-15 increase of £9.9m or 3.7%) due to higher salary costs, social security and other pension costs. Staff full time equivalents rose by 2.7% in the year. The year on year movement in FRS 102 adjustments for unpaid holiday pay and Universities Superannuation Scheme (“USS”) provision was a reduction in expenditure of £22.2m (2014-15 increase to expenditure of £24.5m, 2015-16 increase to expenditure of £2.3m) primarily as a result of a lower movement in the USS provision in 2015-16. The underlying movement and year on year FRS 102 adjustments combined resulted in a reduction of staff costs of £9.1m or 3% to £295.0m. Excluding pension costs and social security costs there was a 0.5% increase in salary costs;

• Other operating expenses increased by 4.7%. The largest growth related to an increase of 10.1% in relation to research grants and contracts, consistent with the income growth in this area, and academic department costs, which rose by 5.4% in the year;


5


• Included within the exceptional items is an expense of £21.9m relating to contract cancellation costs associated with the repurchasing of student residences from Glasgow Student Villages Ltd (“GSV”) (2014-15: £nil);

• During the financial year to 31 July 2002 the University

concluded an agreement with Glasgow Student Villages Ltd (GSV), a company limited by guarantee and with charitable status, whereby six of the University’s Halls of Residence were sold to that company. The agreement provided that the company would operate and maintain the residences to agreed standards and that the University would continue to market and allocate rooms to students and provide them with pastoral care. As part of the agreement the University received an upfront payment of £47.2m and agreed to pay GSV the majority of the rental income from the properties until 2034. The University had a future option to repurchase the properties. The University financial statements recorded the economic substance of the transaction. Accordingly although legal title to the assets had been sold, for accounting purposes the assets were retained on the University balance sheet. The payment received by the University along with a prepayment made to GSV for maintenance costs were deferred on the University balance sheet and recognised over the period of the contract. The University guaranteed 100% occupancy of these residences based on rental values linked to the Retail Price Index and therefore retained the risk of any void bed spaces. Over the years substantial investment has been made by third party providers in student accommodation in Glasgow and in particular in the area around the University’s campus. These new residences have more modern facilities and in many instances locations that are closer to the actual campus. In summary the University faced a growing risk that the GSV residences with inflexible pricing and aging infrastructure would become difficult to fill and that the shortfall would have to be made up directly by the University;

• To address these risks and to take advantage of current exceptionally low interest rates, in July 2016 the University entered into an agreement to repurchase the residences from GSV for a net payment of £64.2m (of which £2.7m represented the prepayment of maintenance costs) and entered into a more limited maintenance contract. This allows the University to gain title to the assets to allow inclusion and consideration as part of the broader campus redevelopment plans and refinance the original loan and interest swaps taken out by GSV which were ultimately charged to the University over the contract duration. To finance the transaction the University raised £70m of private placement funding. Because the original accounting left the assets on the University’s balance sheet the nature of this transaction is deemed to be the buying out of a contract rather than the purchase of assets there is therefore a net charge to the income and expenditure account in 2016. In addition to addressing the risks in the original deal the overall impact of the transaction is expected to be significantly positive in cash terms for the University over the term of the funding based primarily on the reduction in the interest rates inherent in the new funding. The University has no other contracts of this type.

The breakdown of the net charge is as follows: Net payment £64.2m Less: Deferred income & prepayments from 2002 deal

(£22.5m)

Prepayments from 2016 deal (£2.7m) Value attributed to title (£17.1m) Net charge £21.9m

Impact of FRS 102 FRS 102 has a significant impact on the results. The graphs below outline the major areas of impact.

22.6

30.8+1.5

+29.0

+3.1

-14.5

-5.4 -5.4

Pre FRS 102

2015-16

Operat ing

Surplus

Reclassification -

other

New income Deferred capital

grants release

Depreciation Unpaid holiday USS Pension

Deficit

Post FRS 102

2015-16

Operat ing

Surplus

£m - 2015-16 Transition from Pre FRS 102 to Post FRS 102

Operating Surplus before exceptional items

28.7

-0.7

+25.2

-6.7

-18.7

-5.2 -2.3 -21.9

Pre FRS 102

2014-15

Operat ing

Surplus

Reclassification -

Pension and other

New income Deferred capi tal

grants release

Depreciation Unpaid holiday USS Pension

Deficit

Post FRS102

2014-15

Operat ing

Surplus

£m - 2014-15 Transition from Pre FRS 102 to Post FRS 102

Operating Surplus before exceptional items

The significant differences under FRS 102 are summarised below: • Certain items (new endowments) which were previously

recognised in the statement of recognised gains and losses are now recognised in the income and expenditure account. There were also changes to how pension interest was calculated resulting in a reclassification from income to actuarial loss. This has resulted in additional income of £1.5m in 2015-16 (2014-15 a reduction in income of £6.7m);

• Revenue recognition has changed under FRS 102 whereby non-exchange transactions are now recognised when performance conditions are met. This results in donations primarily being recognised on receipt and certain grants being recognised on spend, when previously this income would have been deferred and recognised over the life of the associated asset. This has resulted in the University recognising additional income of £29.0m in 2015-16 offset by previously released deferred capital grants, reversed, amounting to £14.5m (2014-15


6


an increase to income of £25.2m offset by previously released deferred capital grants, reversed, of £18.7m);

• As a result of the University revaluing certain properties on transition to FRS 102 and componentising certain assets an additional depreciation charge of £5.4m has been recognised in 2015-16 (2014-15 additional expenditure of £5.2m);

• Under FRS 102 requirements, an unpaid holiday accrual has been recognised and this gives rise to a credit in the income and expenditure account of £3.1m in 2015-16 (2014-15 additional expenditure of £2.3m);

• As a result of the transition to FRS 102 the University is required to recognise its commitment to fund the USS deficit reduction plan resulting in additional expenditure of £5.4m in 2015-16 (2014-15 additional expenditure of £21.9m).

Net funds and cash flow Net funds increased in the year by £40.2m to a closing balance of £194.0m at 31 July 2016. The five year net funds history is as follows:

2011-12 2012-13 2013-14 2014-15 2015-16

116.9

152.5163.4

153.7

194.0

£m - Net Funds Five Year History

The main cash inflow was from operating activities +£40.5m offset by investing activities (-£71.7m) and financing activities of +£71.1m. The net inflow from operating activities represents the operating surplus of £13.5m and an inflow of £66.1m related to a rise in working capital (excluding depreciation), primarily due to an increase in creditors, which includes the £70m unsecured private placement funding for the GSV deal. The main cash outflow was on capital expenditure for the year where investment in the estate continued, including £17m on the purchase of GSV title, £10m relating to the ICE building and £9m further investment in a new heating system for part of the Estate. Capital expenditure for the year was £75.8m, which was £11.2m higher than 2014-15. Capital commitments authorised but not yet contracted decreased by £12.4m in the year to £25.9m at the balance sheet date. Pension liability The FRS 102 pension liability for the University of Glasgow Pension Scheme (UGPS) and the Strathclyde Pension Fund (SPF) has increased in the year from £49.8m to £53.3m. The University continues to make additional contributions of £2.6m per year towards the UGPS deficit. The underlying pension assets increased during the year, however, this was offset by an increase in liabilities. Under FRS 102 the University records the present value of its deficit recovery commitments for the Universities Superannuation Scheme USS. During the year this provision increased from £46.6m to £52m. Investment performance In the past financial year, the value of global stock markets has risen. However the performance of the groups listed investments decreased from a gain £1.2m in 2014-15 to a loss of £2.5m in 2015-16. This principally related to one specific investment which fell significantly in the period. The value of endowment asset investments increased from £164.3m to £170.9m with new endowment bequests received during the

year increasing from £1.3m to £1.5m. The increase in the market value of the endowment funds was £4.0m in the year 2015-16 compared with £4.4m in 2014-15. The performance of the fund managers continues to be monitored by the Investment Advisory Committee against targets set by the committee. These targets are reviewed regularly. Creditor policy The University aims to pay all of its suppliers promptly. The terms of payment of the University are 30 days from the date of invoice but specific terms and conditions can be agreed for certain suppliers if required. As at 31 July 2016 the University’s outstanding payments represented approximately 12 days’ purchases. This is a decrease from 15 days in 2015. The University has no matters to disclose under the Late Payment of Commercial Debts (Interest) Act 1998. Treasury management The financing and liquidity of the University and its exposure to financial risk is overseen by Court through the Finance Committee. Each year, as part of the financial budgeting process, three year rolling forecasts are prepared which consider the likely cash position of the University given the assumed operational movements and planned investment in property, plant and equipment and working capital. This enables the Finance Committee to consider any future borrowing requirements in a timely manner. The University’s non-endowment cash balances are primarily held in the form of interest bearing deposits with financial institutions. In accordance with University policy the non- endowment cash balances of the University can be invested in temporary cash deposits with the major clearing banks, building societies and money market funds up to a maximum of thirty five million pounds with any one institution, or higher with specific approval from Finance Committee. The institution must be rated at a minimum of BBB+ (as per Standard and Poor's long term rate) with money market funds at a minimum of A+ rated. The length of deposit is a maximum of ninety five days. The University is exposed to changing interest rates, although the exposure is viewed as low given that interest income accounts for less than 0.2% of the total income of the University in 2015-16. Accounting policies The University financial statements have been prepared in accordance with the Statement of Principal Accounting Policies as set out on pages 14 to 17. The Financial Reporting Council issued FRS 102 the Financial Reporting Standard applicable in the UK and Republic of Ireland in March 2013 and subsequently updated in August 2014. The new Statement of Recommended Practice (“SORP”) for Further and Higher Education was published in March 2014 in response to FRS 102 and the University’s accounting policies have been revised accordingly. A description of the impact of adopting the new SORP appears on page 46 and a detailed reconciliation between the results under the old SORP and the restated results under the new SORP appears in note 26 on pages 46 to 53. The format of the financial statements reflects the format as required by the new SORP. The notes to the financial statements reflect best practice guidance given by the British Universities Finance Directors’ Group and also any requirements issued by the Scottish Funding Council in its annual accounts instructions. Where a prior year restatement is required, this is disclosed within the Statement of Principal Accounting Policies.


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Disability policy The University is committed to the implementation of a policy to achieve equality of opportunity for students, members of staff, potential students and potential members of staff, and to meeting the requirements of all relevant external legislation. To enable the University to fulfil its mission statement the aim is to build an inclusive and supportive environment which meets the needs of all staff, students and visitors to the University. The Disability Policy provides a framework for promoting disability equality with the aim of identifying and removing any barriers which exist for disabled people using the University’s facilities, and enabling them to access as fully as possible all education, employment, social and leisure opportunities. Equality and diversity policy The University is committed to ensuring that the creativity, innovation and talents of its people are fully utilised. The University community is made up of a wide range of people with diverse backgrounds and circumstances, which is valued and regarded as a great asset. The University has developed a policy that aims to challenge discrimination, promote and implement equality measures, progress social justice and to strive to ensure that no one is disadvantaged. The policy also looks to ensure that the University complies with all current and relevant anti-discrimination legislation. By adopting this policy the University accepts its responsibility to ensure that discrimination does not take place and that everyone in the University is treated equally and fairly. Ethical investment policy It is the role of Court to set out the ethical platform on which the University's asset investments are managed. The University's approach is set out in the Socially Responsible Investment Policy which was approved by Court in October 2009. Court requires its investment managers to commit to Socially Responsible Investment within their investment policies. In addition, it prohibits direct investment in the tobacco industry, as such investment would run counter to the University's direct interest in research. In the prior year Court also committed to a phased reduction in the University's direct investment in the fossil fuel extraction industry. The first phase of that disinvestment strategy is now being implemented, involving a reduction of 25% over the next four years. This means that, by July 2019, the value of the investments held in fossil fuel extraction will be no more than 6.4% of the University's total endowment investment. Future developments and principal risks and uncerta inties The University’s student numbers continue to grow in a controlled and sustainable manner, particularly with regards to non-Scottish UK students and postgraduate students: its postgraduate taught population rose by 30% in 2015-16, and its postgraduate researcher population rose by 49%. This influx of talent into the postgraduate pipeline in particular has provided a very welcome boost to the University’s already thriving research and innovation community. The University agreed its Outcome Agreement for 2015-16 with the SFC. The Outcome Agreement contains targets that will be monitored by the SFC over the next few years. Plans are in place to ensure that the targets are met, however, progress will be kept under review and additional investment may be required in some areas to ensure that they can be delivered. The UK government has lifted caps on student recruitment for universities in England, Northern Ireland and Wales (RUK), allowing institutions to determine their own capacity level. Early indications suggest that the policy has increased competition to recruit the best students across the UK, particularly at the clearing stages, with many universities offering an increased number of places. The long term impact of this on our own ability to recruit the best students is not yet clear although

recruitment for 2016-17 to Glasgow has been strong with no impact noted; the change has however introduced an additional element of uncertainty into financial projections for the sector as a whole. We will continue to monitor the impact of the removal of the cap and take action where necessary. It has now been four years since Scottish Universities were first permitted to charge RUK students up to £9,000 per year. The University of Glasgow continues to implement a variable RUK fees regime in which the highest fees only apply to Medicine, Dentistry and Veterinary Medicine: all other courses over 3 years in duration are charged at £9,000 with fees waived in the final year to ensure that the University’s four year Scottish undergraduate degree remains financially competitive with its 3 year RUK competitors. Recent income growth has depended upon double digit growth in students from outside the EU. Maintaining this growth against a background of increased international competition, tougher UK Border Agency regulations and the UK Government’s desire to restrict immigration is a significant risk. The University’s ability to attract international students has been further placed at risk by the recent UK referendum decision to withdraw from the European Union (“Brexit”). Brexit is the most significant change in the UK’s political direction in over 40 years, and brings with it a number of uncertainties surrounding the University’s operation, including the impact for recruitment, the UK HE sector’s eligibility for access to European research funding, and its ability to recruit top quality talent from Europe. The situation is further complicated by the potential for Scotland to forge a very different relationship with the EU in future than the rest of the UK. It is difficult to quantify these risks at this early stage. However, the University is proactively responding to the developing situation with dedicated information events for staff and continuing dialogue and engagement with both the Scottish and UK Governments. The UK Government recently published an independent report into the Research Excellence Framework (REF) – the Stern review. The report makes a number of recommendations to alter the existing REF operational model, a number of which will have impact across the UK HE sector. The University and its Russell Group peers are broadly supportive of the Stern reforms and staff are working with colleagues from across the sector to ensure that the benefits of the reforms, to the University’s research reputation, come to fruition. The UK Government’s November 2015 green paper on higher education proposed the introduction of a new Teaching Excellence Framework (TEF) to complement its REF counterpart and develop a culture that affords excellent teaching provision an equal status with excellent research. The TEF will assess universities’ teaching quality against a clear range of criteria including graduate employment destinations, and will award each institution a TEF level carrying associated reputational and financial benefits (see below). While higher education is a devolved concern in Scotland, the University has expressed interest in participating voluntarily within the UK TEF to ensure that students can have confidence in the University’s quality with respect to its UK peers. The UK Government has also recently published a new White Paper for higher education, Success as a Knowledge Economy. The Paper proposes a new HE Bill that will (among other measures) merge the Office for Fair Access with the learning and teaching functions of the Higher Education Funding Council for England; create a link between the forthcoming Teaching Excellence Framework and tuition fees; and ensure that universities’ performance is assessed with reference to their student satisfaction, retention and graduate


8


employment. The University will continue to monitor these developments and respond accordingly. Staffing costs are likely to cause significant pressure in the near to mid-term as cost of living and incremental pay rises outstrip the anticipated increases in income from the Scottish Funding Council (SFC). National insurance (NI) payments have also increased due to the abolishment of the NI contracted out rate. In addition, the deficits in the pension schemes to which University staff belong remain volatile. A payment and deficit recovery plan was agreed in 2013-14 between the University and the Trustees of the University of Glasgow Pension Scheme and contributions to the Universities Superannuation Scheme (USS) were increased in April 2015. The USS provision at 31 July 2016 amounted to £52m (2014-15: £46.5m). During 2015-16 the University officially took vacant possession of the former Western Infirmary site that borders the existing campus. This is an unprecedented development opportunity for an urban university – the potential to expand the footprint of our main estate by almost 50% and create a visionary and inspiring campus for future generations. The Western Site will be the core focus of a £450m campus redevelopment masterplan; an ambitious but achievable programme of capital development that will be managed through a carefully balanced spending profile comprising future cash generation, disposals, existing reserves, and a major donor fundraising campaign that will commence in 2017. The site will eventually provide space to enable the whole academic estate to be reconfigured for academic activity, thus improving the student experience, research performance and staff satisfaction. Consultation has taken place with a wide range of stakeholders to ensure that the extended Gilmorehill campus will enable the University to continue to deliver against its strategic priorities. Decisions on investment in individual building projects on the site, made in the context of a Court-approved and City-adopted Campus Development Framework, are expected to be taken towards the end of the 2016 calendar year. It is also important that, whilst the redevelopment of the campus is being planned, investment is maintained in order to ensure that current business can continue. Summary The University has made good progress in recent years towards the achievement of its strategic ambitions. The external environment, including below inflation increases in funding from the SFC, the changes to the fee regime for UK students, increasing pension deficits and the UK Government’s desire to further restrict immigration continue to pose significant challenges. However, the University is currently in a strong financial position. This, coupled with the capacity, and continuing ability, to recruit additional international and postgraduate students saw the University deliver a record surplus excluding exceptional items in 2015-16. The University’s Senior Management Group assesses the strategic risks that the University faces at each monthly management meeting and identifies and executes appropriate mitigation plans. Court continues to emphasise that strong financial management is essential and that this should be achieved whilst ensuring that progress is made towards the aspirations set out in the new Inspiring People strategy.

Professor Anton Muscatelli Principal Ken Brown Convener of Finance Committee Robert Fraser Director of Finance

CORPORATE GOVERNANCE STATEMENT Continued

9


Introduction The University Court of the University of Glasgow (“Court”) is committed to exhibiting best practice in all aspects of corporate governance relevant to the higher education sector. This summary describes the manner in which Court has applied the principles of the revised Combined Code on Corporate Governance issued by the Financial Reporting Council in 2008. In addition due regard has been taken of the Turnbull Committee guidance on internal control as amended by the British Universities Finance Directors Group in its 2006 guidance, of the Scottish Code of Good HE Governance, as issued by the Committee of Scottish Chairs in July 2013, and of the Annual Accounts direction as issued by the Scottish Funding Council. Its purpose is to help the reader of the reports and financial statements understand how the principles have been applied. Statement of Combined Code compliance In the opinion of the members of Court, the University complies with all the provisions of the Combined Code in so far as they apply to the higher education sector, and it has complied throughout the year ended 31 July 2016. University governance Much of the University’s modern constitutional framework derives from the Universities (Scotland) Act 1966, which updated and expanded on the Universities (Scotland) Acts 1858 to 1932. The University also complies with the Post-16 Education (Scotland) Act 2013 and the Higher Education Governance (Scotland) Act 2016. These Acts make provision for the three main statutory bodies in the governance of the University - Court, the Senate and the General Council. Court The University’s governing body is Court. Its powers have been defined over a number of years, commencing in 1858, when Court was first established, and are set out in a series of Acts of Parliament, the Universities (Scotland) Acts 1858-1966. These Acts are supplemented by sections of other Acts and certain Ordinances, promulgated by the University and approved by the Monarch in Council. Ordinances have been enacted to extend the powers available to Court, or to clarify the powers which Court believes it has but which are not explicit in the Acts. Court has ultimate responsibility for the deployment of resources in the University, and for the strategic plans of the institution. It does not normally generate proposals, but receives them from other bodies within the University - most notably the Senate and the Senior Management Group. It also has a monitoring role in relation to the overall performance of the University, and it holds the Principal accountable for the effective and efficient management of the University. Working with the Senate, Court is responsible for the well-being of students and for the reputation of the University. It is also responsible for the well-being of staff. The Court Statement of Primary Responsibilities is published at http://www.gla.ac.uk/media/media_293602_en.pdf. Court has 25 members and, in financial year 2015-16, consisted of: the Rector (who is elected by the students of the University), the Principal, the Chancellor's Assessor, a representative of Glasgow City Council, four assessors elected by the General Council, six assessors elected by Senate, two employee representatives, the President of the Students' Representative Council, one assessor elected by the Students' Representative Council, and seven independent members appointed by Court. The Rector is the ‘ordinary president of Court’ in terms of the 1858 Act. Court’s standing orders reflect its agreement that the Rector shall chair such parts of Court meetings as Court may decide, and that the Convener of Court shall chair the other parts of those meetings. When vacant, the

position of Convener of Court is advertised publicly and an appointment is made by Court for a period of four years. Meetings of Court are held five times a year. The future composition of Court and the method of selecting the Convener will be affected by the terms of the Higher Education Governance (Scotland) Act 2016, whose commencement date is not yet known. Court conducts its business through seven committees, each having formally constituted terms of reference. Committees report to Court through their chair, who - with one exception (The Health, Safety & Wellbeing Committee) - is an independent member of Court. The Committees have each been required by Court, in October 2016, to appoint a Vice-Chair, while Court itself will soon appoint a Vice-Convener. The Finance Committee monitors the financial performance of the University and its associated legal entities. It considers financial policies and issues and makes recommendations to Court on these matters and with regard to the importance of financial sustainability. It also considers the reports and financial statements and revenue / capital budgets of the University and its associated legal entities and makes recommendations to Court thereon. The Committee is chaired by Ken Brown, an independent member of Court, and normally meets five times a year. The Audit Committee oversees the arrangements for external and internal audit of the University’s financial and management systems and of activities and processes related to these systems. The Committee normally meets four times a year, with the University’s external and internal auditors in attendance. Paul Brady, an independent governor, chaired the Committee until 30 September 2016, when he was succeeded by Heather Cousins, an independent member of Court. The Remuneration Committee makes recommendations to Court on the process of determining salary awards for senior staff and will determine the Principal’s remuneration in the absence of the Principal. Details of the remuneration of senior post-holders for the year ended 31 July 2016 are set out in note 7 to the financial statements. The Committee is currently chaired by Ken Brown, an independent member of Court, and meets at least once a year. The Human Resources Committee develops policies required to implement the University’s human resources strategy and will make recommendations to Court thereon. The Committee will also review the implementation of policy and raise awareness throughout the University of the importance that senior management place on human resource issues. The Committee is chaired, with effect from 1 October 2016, by an independent member of Court, June Milligan, and normally meets five times a year. The Nominations Committee makes recommendations to Court on the appointment of independent members appointed by Court and on the membership and Convener of Court Committees having regard to the skills and experience required. The University provides induction training for all new members of Court and its Committees. The training covers Higher Education in Scotland, University Governance, University Strategy and Financial Management. The Committee is chaired by the Convener of Court, and normally meets two or three times a year.

CORPORATE GOVERNANCE STATEMENT Continued

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The Estates Committee develops and maintains strategic estate plans for consideration by Court taking into account academic need, resource implications and the importance of environmental sustainability. The Committee is chaired by an independent member of Court: Margaret Morton, until 30 September 2016; Ronnie Mercer, from that date onwards. It normally meets five times a year. The Health, Safety and Wellbeing Committee provides a forum within which consultation and discussion may take place between representatives of University management and representatives of staff and students on health, safety and wellbeing matters. The Committee will also make representations and recommendations to Court as required. The Committee is chaired by the Secretary of Court David Newall and normally meets five times a year. In respect of its strategic and development responsibilities, Court receives recommendations and advice from the Senior Management Group . The Heads of College, Vice Principals and other senior officers are members of the Senior Management Group which is convened by the Principal. The Principal briefs each meeting of Court on significant matters, and reports on issues considered by the Senior Management Group. The Senate Senate is the senior academic body of the University and, subject to the powers of the Court, is responsible for the academic activity of the University and the maintenance of academic standards. Senate has over 500 members drawn principally from the University’s academic staff. Senate has delegated authority to a Council of Senate to expedite business on its behalf. The Council of Senate meets five times per year. The future composition of Senate will be affected by the terms of the Higher Education Governance (Scotland) Act 2016. The General Council The General Council comprises the graduates of the University and has a statutory right to comment on matters which affect the well-being and prosperity of the University. Statement of internal control Court is ultimately responsible for the University’s system of internal control and, as chief executive officer, the Principal is responsible for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. The Senior Management Group receives reports setting out key performance and risk indicators and considers possible control issues brought to their attention by early warning mechanisms. A key control is the Principal’s Budget Briefing which takes place in May of each year. This meeting is attended by the Heads of College. The Budget Briefing provides a forum for the Principal and the Heads of College to discuss the key strategic issues within each College. These meetings are also attended by the Vice Principal for Strategy and Resources and senior staff from the Finance Office. The Audit Committee’s role in this area is confined to a high level review of the arrangements for internal control. The University’s internal auditors monitor the systems of internal control, risk management controls and governance processes in accordance with an agreed plan, and report their findings to management and the Audit Committee. Management is responsible for the implementation of agreed audit recommendations and the internal auditors undertake periodic follow-up reviews to ensure that such

recommendations have been implemented. The Audit Committee considers summarised reports together with recommendations for the improvement of the University’s systems of internal control and management’s responses and implementation plans. Whilst senior executives attend meetings of the Audit Committee as necessary, they are not members of the Committee and the Committee meets the internal and external auditors on their own for independent discussions. Court receives regular reports from the Audit Committee. Court is of a view that there is an ongoing process for identifying, evaluating and managing the University’s significant risks, and that it has been in place throughout the year ended 31 July 2016 and up to the date of approval of the annual reports and financial statements. Modern Slavery Act statement The University is committed to ensuring and actively monitoring that modern slavery and human trafficking is not taking place in any parts of its operation within the University and its supply chain. For further information relating to the Modern Slavery Act statement, see website www.gla.ac.uk. Going concern The University’s principal operations, together with the factors likely to affect its future development, its financial position are noted in the Operating and Financial Review. The University has considerable financial resources and access to funding. As a consequence, the Court believes that the University is well placed to manage its business risks successfully despite the current uncertain economic outlook. After making enquiries, the Court has a reasonable expectation that the University and the group have adequate resources to continue in operational existence for a period of 12 months from the approval of these financial statements. Accordingly, they continue to adopt the going concern basis in preparing the annual report and accounts. Elizabeth Passey Convener of Court Date: 14 December 2016

STATEMENT OF THE RESPONSIBILITIES OF COURT

11


The University Court of the University of Glasgow (“Court”) is responsible for the administration and management of the affairs of the University. Amongst its duties, which are summarised in a formal Statement of Primary Responsibilities, Court is required to present audited financial statements for each financial year. Court is responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the University and to enable it to ensure that the financial statements are prepared in accordance with all relevant Acts of Parliament, with the Statement of Recommended Practice on Accounting for Further and Higher Education issued in 2015, and with other relevant accounting standards (United Kingdom Generally Accepted Accounting Practice, Financial Reporting Standard 102). In addition, within the terms and conditions of a Financial Memorandum agreed with the Scottish Funding Council for Further and Higher Education (“Scottish Funding Council”), Court, through its designated office holder, is required to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the University and of the surplus or deficit and cash flows for that year. In causing the financial statements to be prepared, Court has to ensure that suitable accounting policies are selected and applied consistently, judgements and estimates are made that are reasonable and prudent, applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements and that the financial statements are prepared on the going concern basis unless it is inappropriate to assume that the University will continue in operation. Court is satisfied that it has adequate resources to continue in operation for the foreseeable future: for this reason the going concern basis continues to be adopted in the preparation of the financial statements. Court has a responsibility to ensure that funds from the Scottish Funding Council are used only for the purposes for which they have been given and in accordance with the Financial Memorandum with the Scottish Funding Council and any other conditions which the Scottish Funding Council may from time to time prescribe. Court also has a responsibility to ensure that there are appropriate financial and management controls in place to safeguard public funds and funds from other sources; safeguard the assets of the University; take reasonable steps to prevent and detect fraud and to ensure that reasonable steps have been taken to secure the economic, efficient and effective management of the University's resources and expenditure. The key elements in the University's system of internal financial control, which is designed to discharge the responsibilities set out above, include:

• clear definitions of the responsibilities of, and the authority delegated to, heads of academic and administrative departments;

• a comprehensive medium and short-term planning process, supplemented by detailed annual income, expenditure, capital and cash flow budgets and regular reviews of academic performance and quarterly reviews of financial results and forecast outturns;

• clearly defined and formalised requirements for approval and control of expenditure, with investment decisions involving capital or revenue expenditure being subject to formal detailed appraisal and review according to approval levels set by Court;

• comprehensive Financial Regulations detailing financial controls and procedures;

• an Internal Audit service whose annual programme is approved by the Audit Committee.

The Audit Committee, on behalf of Court, has reviewed the effectiveness of the system of internal control. Such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable and not absolute assurance against material misstatement or loss. Court is satisfied that there is an ongoing process for identifying, evaluating and managing the University’s significant risks that has been in place for the year ended 31 July 2016 and for the period to the date of the approval of the reports and financial statements. This process accords with the internal control guidance as applicable to the higher education sector. David Newall Secretary of Court On behalf of Court Date: 14 December 2016

MEMBERSHIP OF COURT

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Members of Court who served during the year to 31 July 2016 are detailed below, as are members who served up to the date of approval of the reports and financial statements. Also shown is an indication of the Committees on which the members served, the expiry date of their current term of office and whether they are independent members of Court. Independent Expiry date Committee Membership Member The Rector Mr Edward Snowden (Mar 2017) The Principal and Vice-Chancellor Professor Anton Muscatelli (Sep 2019) (FC) (HRC) (EC) (NC) (RC) The Chancellor’s Assessor Mr Murdoch MacLennan (Dec 2017) (NC) * Assessor of City of Glasgow Council Councillor Pauline McKeever (May 2017) * General Council Assessors Mr David Ross (Jul 2016)** (FC) (RC) (NC) * Mr Brian McBride (Jul 2016) (RC)(NC) * Dr Morag Macdonald Simpson (Jul 2018) (HRC) * Ms Lesley Sutherland (Jul 2018) (AC) (NC) * Senate Assessors Professor George Baillie (Dec 2015) (HRC) Professor Lindsay Farmer (from Oct 2015) (Jul 2019) (HRC) Dr Carl Goodyear (Jul 2018) (FC) Professor Nick Hill (from Jan 2016) (Jul 2019) (HRC) Professor Karen Lury (Jul 2017) (EC) Dr Duncan Ross (Jul 2017) (FC) (NC) Professor Paul Younger (Jul 2018) (EC) Employee Representatives Mr David W Anderson (Jan 2018) Ms Margaret Anne McParland (Jul 2018) Co-opted Members of Court Mr Graeme Bissett (Dec 2017) (FC) * Mr Ken Brown (Dec 2017) (FC) (RC) * Ms Heather Cousins (Mar 2018) (AC) (NC) * Mr Ronnie Mercer (Oct 2019) (EC) * Ms June Milligan (Oct 2019) (HRC) (RC) * Mr David Milloy (Dec 2017) (EC) * Ms Margaret Morton (Dec 2016) (EC) (FC) * Ms Elspeth Orcharton (from Oct 2016) (Oct 2020) (FC) * Ms Elizabeth Passey (from Aug 2016) (July 2020)*** (FC)(RC)(NC) * President of the Students’ Representative Council Mr Liam King (Jun 2016) (FC) (EC) (NC) Mr Ameer Ibrahim (from Jul 2016) (Jun 2017) (FC) (EC) (NC) Assessor of the Students’ Representative Council Mr Marvin Karrasch (Oct 2015) Ms Morag Deans (from Oct 2015) (Oct 2016) Ms Lauren McDougall (from Oct 2016) (Oct 2017) Secretary of Court Mr David Newall (EC) (HRC) (NC) (HSWC) The Committees of Court, as identified in the Corporate Governance statement are: Finance Committee (FC); Estates Committee (EC); Human Resources Committee (HRC); Audit Committee (AC); Remuneration Committee (RC); Nominations Committee (NC); Health, Safety and Wellbeing Committee (HSWC). **Mr David Ross was also Convener of Court until July 2016. ***Ms Elizabeth Passey is also Convener of Court, an appointment that will run until July 2020.

INDEPENDENT AUDITOR’S REPORT TO THE UNIVERSITY COURT OF THE UNIVERSITY OF GLASGOW

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We have audited the financial statements of the University of Glasgow for the year ended 31 July 2016 which comprise the Statement of Principal Accounting Policies, Consolidated and University Income Statements, Consolidated and University Statement of Comprehensive Income, Consolidated and University Balance Sheets, Consolidated and University Statements of Changes in Equity, and Consolidated Cash Flow Statement and the related notes 1 to 26. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice), including FRS 102 ‘The Financial Reporting standard applicable in the UK and Republic of Ireland’.

This report is made solely to the University Court of the University of Glasgow (“University Court”), as a body, in accordance with our appointment under section 44(1)(c) of the Charities and Trustee Investment (Scotland) Act 2005. Our audit work has been undertaken so that we might state to the University Court those matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the University Court of the University of Glasgow as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of the University Court and auditor As explained more fully in the Statement of the Responsibilities of Court (set out on page 11), the University Court is responsible for preparing the financial statements and for being satisfied that they give a true and fair view. We have been appointed as auditors under section 44(1) (c) of the Charities and Trustee Investment (Scotland) Act 2005 and report in accordance with regulations made under that Act. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group’s and the University’s circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by Court; and the overall presentation of the financial statements. We are also required to report to you whether, in our opinion, funds, from whatever source, administered by the University for specific purposes have, in all material respects, been properly applied to those purposes and managed in accordance with the terms and conditions attached to them and whether income has, in all material respects, been applied in accordance with the relevant legislation and with the Financial Memorandum with the Scottish Funding Council. In addition, we read all the financial and non-financial information in the Operating and Financial Review, Corporate Governance Statement and Statement of the Responsibilities of Court to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report.

Opinion on financial statements In our opinion the financial statements:

• give a true and fair view of the state of the Group’s and of the University’s affairs as at 31 July 2016 and of the Group's and the University’s incoming resources and application of resources, including its income and expenditure, for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice, including FRS 102 “The Financial Reporting standard applicable in the UK and Republic of Ireland and with the Statement of Recommended Practice: Accounting for Further and Higher Education; and

• have been prepared in accordance with the requirements of the Charities and Trustee Investment (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006 (as amended).

Opinion on other matters prescribed by applicable regulations In our opinion:

• funds from the Scottish Funding Council, grants and income for specific purposes and from other restricted funds administered by the University have, in all material respects, been applied only for the purposes for which they were received; and

• funds provided by Scottish Funding Council have been applied in accordance with the requirements of the SFC Financial Memorandum with Higher Education Institutions.

Matters on which we are required to report by excep tion We have nothing to report in respect of the following matters where the Charities Accounts (Scotland) Regulations 2006 (as amended) require us to report to you if, in our opinion:

• the information given in the Operating and Financial Review is inconsistent in any material respect with the financial statements;

• proper accounting records have not been kept;

• the financial statements are not in agreement with the accounting records and returns; or

• we have not received all the information and explanations we require for our audit.

Ernst & Young LLP Statutory auditor Glasgow Date: 15 December 2016 Ernst & Young LLP is eligible to act as an auditor in terms of section 1212 of the Companies Act 2006

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES

14


Statement of compliance The University of Glasgow is a not for profit University operating in Scotland. The Registered Office is University Avenue, Glasgow G12 8QQ, Scotland, UK. The consolidated financial statements have been prepared in compliance with Financial Reporting Standard 102 (FRS 102) as it applies to the financial statements of the group for the year ended 31 July 2016. The University transitioned from previously extant UK GAAP to FRS 102 and the 2015 SORP (published March 2014) as at 1 August 2014. An explanation of how transition to FRS 102 has affected the reported balance sheet and financial performance is given in note 26. Basis of preparation The financial statements have been prepared under the historic cost convention, modified to include certain items at fair value in accordance with the applicable accounting standard FRS 102 and the Statement of Recommended Practice: Accounting for Further and Higher Education (SORP). The University is a public benefit entity and has applied the relevant public benefit requirements of FRS 102. The financial statements also conform to guidance published by the Scottish Funding Council. The financial statements are prepared in sterling which is the functional currency of the group and rounded to the nearest £000. Basis of consolidation The consolidated financial statements consolidate the financial statements of the University of Glasgow, its subsidiary companies and unincorporated undertakings for the financial year to 31 July 2016. Also consolidated are the results of the University of Glasgow Trust, an independent charity, set up to collect donations and disburse them for the benefit of the University. The consolidated financial statements do not include the income and expenditure of the University of Glasgow Students' Unions as the University does not exert control or dominant influence over them. Income recognition Income from the sale of goods or rendering of services is credited to the Income Statement when the goods or services are supplied to the external customers or the terms of the contract have been satisfied. Tuition fee income is stated net of any discounts and is credited to the Income Statement over the period in which the students are studying. Bursaries and scholarships are accounted for gross as expenditure and are not netted from fee income. Government grants including; funding body grants and research grants from government sources; are recognised within the Income Statement when the University is entitled to the income and performance related conditions have been met. Other grants and donations from non-government sources (including research grants from non-government sources) are recognised within the Income Statement when the University is entitled to the income and performance related conditions have been met. Income received in advance of performance related conditions is deferred on the balance sheet and released to the Income Statement in line with such conditions being met. Capital grants are recognised in income when the University is entitled to the income subject to any performance related conditions being met.

Non exchange transactions without performance related conditions are donations and endowments. Donations and endowments with donor imposed restrictions are recognised within the Income Statement when the University is entitled to the income. Income is retained within the restricted reserves until such time that it is utilised in line with such restrictions at which point the income is released to general reserves through a reserve transfer. Investment income and appreciation of endowments are recorded in income in the year in which they arise and as either restricted or unrestricted income according to the terms of the restriction applied to the individual endowment funds. Investment income is credited to the Income Statement on a receivable basis. Donations with no restrictions are recorded within the Income Statement when the University is entitled to the income. Donations and endowments with restrictions are classified as restricted reserves with additional disclosure provided within the notes to the accounts. There are four main types of donations and endowments with restrictions: 1. Restricted donations - the donor has specified that the donation must be used for a particular objective. 2. Unrestricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream for the general benefit of the University. 3. Restricted expendable endowments - the donor has specified a particular objective, no capital element is required to be maintained, and the University can convert the donated sum into income. Alternatively where the funds donated with a specific restriction are so large that the funds will need to be retained over a period of two years. 4. Restricted permanent endowments - the donor has specified that the fund is to be permanently invested to generate an income stream to be applied to a particular objective. Property plant & equipment Property Plant & Equipment (PPE) consists of plant and machinery, equipment (including software and vehicles), costing over £50k (2014-15: £25k) and capital building projects over £100k. On adoption of FRS 102, the University followed the transitional provision to retain the book value of land and property, which were revalued as at 31 July 2014 as ‘deemed cost’ as at the date of transition. The University has adopted a policy of revaluation on these properties in the future. Costs incurred in relation to land and property after initial purchase or construction, and prior to valuation, are capitalised to the extent that they increase the expected future benefits to the University. Where parts of a fixed asset have different useful lives, they are accounted for as separate items of fixed assets. Property, plant & equipment is stated at cost or valuation and depreciated on a straight line basis as follows: Buildings 10-165 years Plant & machinery 15-30 years Equipment Up to 10 years Land and assets under construction are not depreciated.

STATEMENT OF PRINCIPAL ACCOUNTING POLICIES Continued

15


Assets are assessed for indicators of impairment at each balance sheet date. If there is objective evidence of impairment, an impairment loss is recognised in the Income Statement. Assets are considered to be impaired if their recoverable value is less than book value. The recoverable amount of a PPE asset is the higher of its fair value less costs to sell and its value in use. Where indicators exist for a decrease in impairment loss on assets, the prior impairment loss is reversed only to the extent that it does not lead to a revised carrying amount higher than if no impairment had been recognised. Repairs and maintenance Maintenance expenditure is recognised in the Income Statement in the period it is incurred. The University has a planned maintenance programme, which is reviewed on an annual basis. Donated assets The University receives benefits in kind such as gifts of equipment, works of art, and property. Items of a significant value donated to the University, which if purchased the University would treat as Property Plant and Equipment are capitalised at their current value and depreciated in accordance with the policy set out above. The value of the donation is included in the Income Statement in the year they are received. Heritage assets The University holds heritage assets across several locations including; the Hunterian Museum and Art Gallery, Special Collections within the library and Archive Services. It has not been possible to obtain reliable information on the cost or valuation of the collections held within the Hunterian Museum and Art Gallery, Special Collections and Archive Services. It is not considered practicable to obtain valuations for the artefacts defined as heritage assets owing to the diverse nature of the assets held, the number of assets held, the lack of comparable market values and the prohibitive cost associated with obtaining valuations. The University does not therefore recognise these assets on the Balance Sheet. In accordance with FRS 102, recent and future acquisitions which meet the definition of a heritage asset, not held for the University’s core purpose of teaching and research, are recognised at cost where the object is purchased or at an appropriate value where the object is donated. The threshold for capitalisation is £50k (2014-15: £25k). Where it is not practicable to obtain a valuation, details of such significant donations will be disclosed. Expenditure which is required to preserve or clearly prevent further deterioration of individual collection items is recognised in the Income Statement when it is incurred. The heritage assets are deemed to have indeterminate lives and therefore it is not considered appropriate to charge depreciation. Further information on the collections and details of the University’s management policy in respect of heritage assets is summarised in note 13. Investments All investments will initially be recognised at cost and subsequently measured at fair value at each reporting date. Where fair value cannot be reliably measured or investments are not publicly traded, they will be measured at cost less impairment. Investments in subsidiaries, associates and joint ventures are carried at cost less impairment in the University's accounts. Revaluation All gains and losses on investment assets, both realised and unrealised are recognised in the Income Statement as they accrue.

Stocks Stocks are valued at the lower of purchase cost or net realisable value and include stocks in the refectories, the halls of residence, the farm and at certain main stores. Other stocks held in academic departments are written off to the Income Statement in the year in which the expenditure is incurred. Agency arrangements Funds the University receives and disburses as paying agent on behalf of a funding body or other body, where the institution is exposed to minimal risk and enjoys minimal economic benefit related to the receipt and subsequent disbursement of the funds, are excluded from the Income Statement of the institution. The balances and movement on these funds are disclosed in note 23 to the financial statements. Taxation The University is a charity within the meaning of Part 1, chapter 2, section 7 of the Charities and Trustee Investment (Scotland) Act 2005 and is considered to pass the tests set out in Paragraph 1 Schedule 6 Finance Act 2010 and therefore it meets the definition of a charitable company for UK corporation tax purposes. Accordingly the Institution is potentially exempt from taxation in respect of income or capital gains received within categories covered by section 287 CTA 2009 and sections 471, and 478-488 CTA 2010 or section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied to exclusively charitable purposes. The institution receives no similar exemption in respect of Value Added Tax (VAT). Irrecoverable VAT on inputs is included in the costs of such inputs. Any irrecoverable VAT allocated to tangible fixed assets is included in their cost. The University’s subsidiary companies are subject to corporation tax and VAT in the same way as any commercial organisation. Cash and cash equivalents Cash and cash equivalents in the balance sheet include cash at bank and on hand and short term investments. Short term investments are repayable on demand if they are in practice available within 24 hours without penalty. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash with insignificant risk of change in value. Cash and cash equivalents contains sums relating to endowment reserves which the University is restricted as to how they disburse. Note 19 summarises the assets restricted in their use. Foreign currencies Transactions in foreign currencies are recorded at the rate of exchange on the transaction date. Monetary assets and liabilities denominated in foreign currencies are reported at the rates of exchange prevailing at the balance sheet date. Non-monetary assets and liabilities measured at historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Foreign exchange differences arising on translation are recognised in the Income Statement. The results of overseas operations are translated at the average rates of exchange during the period and their balance sheets at the rates prevailing at the balance sheet date. Exchange differences arising from this translation of foreign operations are reported as an item of Other Comprehensive Income.


16


Provisions, contingent liabilities and contingent a ssets Provisions are recognised when the University has a present legal or constructive obligation as a result of a past event, it is probable that a transfer of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed by way of a note when the definition of a provision is not met and includes three scenarios: possible rather than a present obligation; a possible rather than a probable outflow of economic benefits; an inability to measure the economic outflow. Contingent assets are disclosed by way of a note, where there is a possible, rather than a present asset arising from a past event. Employee benefits Short-term employee benefits Short term employment benefits such as salaries and compensated absences are recognised as an expense in the year employees render service to the University. A liability is recognised at each balance sheet date to the extent that employee holiday allowances have been accrued but not taken, the expense being recognised as staff costs in the Income Statement. Post-employment benefits (pensions) The University participates in a number of defined benefit pension schemes. For the University of Glasgow Pension Scheme and the Strathclyde Pension Fund, the expected cost of providing pensions is recognised in the Income Statement on a systematic basis over the expected average lives of members of the funds. Under FRS 102 past service costs are recognised immediately. Pension scheme assets are measured using market value. Pension scheme liabilities are measured using the projected unit method and discounted at the current rate of return on a high quality corporate bond of equivalent terms and currency to the liability. The net interest cost on the net defined benefit liability is charged to the Income Statement and included within finance costs. Actuarial gains and losses and the return on scheme assets (excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in Other Comprehensive Income. For the other multi-employer schemes that the University participates in, it is not possible to identify each participating institution’s share of the underlying assets and liabilities. The amount charged to the Income Statement represents the contributions payable to the scheme in respect of the accounting period, excluding any extra costs incurred related to reducing scheme deficits already provided for. A liability is recorded within provisions for any contractual commitment to fund past deficits within the multi-employer schemes as determined by the scheme management. The associated expense is recognised in the Income Statement. Leases Finance leases, which substantially transfer all the risks and rewards incidental to ownership of an asset to the University, are treated as if the asset had been purchased outright. The assets are included in fixed assets (in so far as the costs exceed the University’s capitalisation threshold) and the capital element of the leasing commitments is shown as obligations under finance leases. The lease rentals are treated as consisting of capital and interest elements. The capital element is applied in order to reduce outstanding obligations and the interest element is

charged to the Income Statement in proportion to the reducing capital element outstanding. Assets held under finance leases are depreciated over the shorter of the lease term or the useful economic lives of equivalent owned assets. Rental costs incurred under operating leases are charged to expenditure on a straight line basis over the period of the leases. Any lease premiums or incentives are spread over the minimum lease term. Service concession arrangements Property, plant and equipment held under service concession arrangements are recognised on the balance sheet at the present value of the minimum lease payments when the assets are brought into use with a corresponding financial liability. Payments under the service concession arrangement are allocated between service costs, finance charges and financial liability repayments to reduce the financial liability to nil over the life of the arrangement. Short-term debtors and creditors Debtors and creditors with no stated interest rate and receivable or payable within one year are recorded at transaction price. Any losses arising from impairment are recognised in the income statement in other operating expenses. Interest-bearing loans and borrowings All interest-bearing loans and borrowings which are basic financial instruments are initially recognised at the present value of cash payable to the bank (including interest). After initial recognition they are measured at amortised cost using the effective interest rate method, less impairment. The effective interest rate amortisation is included in finance revenue in the income statement. Accounting for jointly controlled operations, joint ly controlled assets and jointly controlled entities The University accounts for its share of transactions from jointly controlled operations in the Income Statement. Reserves Reserves are allocated between restricted and unrestricted reserves. Restricted endowment reserves include balances which, through endowment to the University, are held as a permanently restricted fund as the University must hold the fund in perpetuity. Other restricted reserves include balances through which the donor has designated a specific purpose and therefore the University is restricted in the use of these funds. Intra group transactions Gains or losses on any intra group transactions are eliminated in full. Amounts in relation to debts and claims between undertakings included in the consolidation are also eliminated. Transition to SORP The University has prepared its financial statements in accordance with FRS 102 for the first time and consequently has applied the first time adoption requirements. An explanation of how the transition to FEHE SORP has affected the reported financial position, financial performance and cash flows of the consolidated results of the University is provided in note 26. Application of first time adoption grants certain exemptions from the full requirements of FEHE SORP in the transition period. The following exemption has been taken into these financial statements: The deemed cost upon transition of Property, Plant & Equipment is the fair value as at 31 July 2014.


17


Judgements and key sources of estimation uncertaint y The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. However, the nature of estimation means that actual outcomes could differ from those estimates. The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements. Operating lease commitments The University has entered into commercial property leases and as a lessee it obtains use of land and buildings. The classification of such leases as operating or finance lease requires the University to determine, based on an evaluation of the terms and conditions of the arrangements, whether it retains or acquires the significant risks and rewards of ownership of these assets and accordingly whether the lease requires an asset and liability to be recognised in the balance sheet. The following is the University’s key source of estimation uncertainty: Pension and other post-employment benefits The cost of defined benefit pension plans and other post-employment benefits are determined using actuarial valuations. The actuarial valuation involves making assumptions about discount rates, future salary increases, mortality rates and future pension increases. Due to the complexity of the valuation, the underlying assumptions and the long term nature of these plans, such estimates are subject to significant uncertainty. In determining the appropriate discount rate, management considers the interest rates of corporate bonds in the respective currency with at least AA rating, with extrapolated maturities corresponding to the expected duration of the defined benefit obligation. The underlying bonds are further reviewed for quality, and those having excessive credit spreads are removed from the population bonds on which the discount rate is based, on the basis that they do not represent high quality bonds. The mortality rate is based on publicly available mortality tables for the specific country. Future salary increases and pension increases are based on expected future inflation rates for the respective country. Further details are given in note 25.

CONSOLIDATED AND UNIVERSITY INCOME STATEMENTS for the year ended 31 July 2016

18


Consolidated Income Statement Before

exceptional

items

Exceptional

items

2016

Before

exceptional

items

Exceptional

items

2015

Note £000 £000 £000 £000 £000 £000

Income

Tuition fees and education contracts 1 161,586 - 161,586 142,930 - 142,930

Funding body grants 2 158,693 - 158,693 160,669 3,368 164,037

Research grants and contracts 3/10 175,172 2,618 177,790 163,295 20,369 183,664

Other income 4 74,832 - 74,832 68,964 2,647 71,611

Investment income 5 8,127 - 8,127 8,207 - 8,207

Donations and endowments 6 1,524 - 1,524 1,312 - 1,312

Total income

579,934

2,618

582,552

545,377

26,384

571,761

Expenditure

Staff costs 7 295,064 - 295,064 304,258 - 304,258

Other operating expenses 9/10 220,131 21,903 242,034 210,193 - 210,193

Depreciation 12 30,882 - 30,882 29,633 - 29,633

Interest and other finance costs 8 3,027 - 3,027 2,031 - 2,031

Total expenditure

549,104

21,903

571,007

546,115

-

546,115

Surplus/(deficit) before other gains 30,830 (19,285) 11,545 (738) 26,384 25,646

Gain/(loss) on disposal of property, plant and equipment 1,067 - 1,067 - (5,134) (5,134)

Gain on investments 1,502 - 1,502 5,635 - 5,635

Surplus before tax

33,399

(19,285)

14,114

4,897

21,250

26,147

Corporation taxation 11 (34) (547) (581) (45) (4,447) (4,492)

Surplus after tax 33,365 (19,832) 13,533 4,852 16,803 21,655

All items of income and expenditure arise from continuing activities.

CONSOLIDATED AND UNIVERSITY INCOME STATEMENTS for the year ended 31 July 2016

19


University Income Statement Before

exceptional

items

Exceptional

items

2016

Before

exceptional

items

Exceptional

items

2015

Note £000 £000 £000 £000 £000 £000

Income

Tuition fees and education contracts 1 158,432 - 158,432 139,906 - 139,906

Funding body grants 2 158,693 - 158,693 160,669 3,368 164,037

Research grants and contracts 3/10 175,172 2,618 177,790 163,295 20,369 183,664

Other income 4 76,142 - 76,142 70,683 2,647 73,330

Investment income 5 8,061 - 8,061 7,960 - 7,960

Donations and endowments 6 1,524 - 1,524 1,312 - 1,312

Total income

578,024

2,618

580,642

543,825

26,384

570,209

Expenditure

Staff costs 7 293,062 - 293,062 302,919 - 302,919

Other operating expenses 9/10 221,246 21,903 243,149 209,452 - 209,452

Depreciation 12 30,721 - 30,721 29,633 - 29,633

Interest and other finance costs 8 3,027 - 3,027 2,031 - 2,031

Total expenditure

548,056

21,903

569,959

544,035

-

544,035

Surplus/(deficit) before other gains 29,968 (19,285) 10,683 (210) 26,384 26,174

Gain/(loss) on disposal of property, plant and equipment 855 - 855 - (5,134) (5,134)

Gain on investments 4,110 - 4,110 4,428 - 4,428

Surplus before tax

34,933

(19,285)

15,648

4,218

21,250

25,468

Corporation taxation 11 - (547) (547) - (4,447) (4,447)

Surplus after tax 34,933 (19,832) 15,101 4,218 16,803 21,021

All items of income and expenditure arise from continuing activities.

CONSOLIDATED AND UNIVERSITY STATEMENTS OF COMPREHEN SIVE INCOME for the year ended 31 July 2016

20


Consolidated University Consolidated University

2016 2016 2015 2015

Note £000 £000 £000 £000

Surplus for the year 13,533 15,101 21,655 21,021

Exchange differences on translation of

subsidiary undertakings

252

-

(7)

-

Actuarial loss recognised on defined benefit

pension schemes

25

(2,398)

(2,398)

(12,805)

(12,805)

Total other comprehensive loss

(2,146)

(2,398)

(12,812)

(12,805)

Total comprehensive income for the year 11,387 12,703 8,843 8,216

Represented by

Endowment comprehensive income for the

year

6,631

6,631

6,468

6,468

Restricted comprehensive income/(loss) for

the year

451

451

(9,025)

(9,025)

Unrestricted comprehensive income for the

year

4,305

5,621

11,400

10,773

11,387 12,703 8,843 8,216

CONSOLIDATED AND UNIVERSITY STATEMENTS OF CHANGES I N EQUITY for the year ended 31 July 2016

21


Consolidated Income and expenditure account Total

Endowment Restricted Unrestricted

£000 £000 £000 £000

Balance at 1 August 2014 157,848 13,652 570,383 741,883

Surplus from the statement of comprehensive

income

6,468

(9,025)

24,212

21,655

Other comprehensive loss - - (12,812) (12,812)

Total comprehensive income

for the year

6,468

(9,025)

11,400

8,843



income

6,631

451

6,451

13,533



for the year

6,631

451

4,305

11,387

Balance at 31 July 2016

170,947

5,078

586,088

762,113

University Income and expenditure account Total

Endowment Restricted Unrestricted

£000 £000 £000 £000



income

6,468

(9,025)

23,578

21,021



for the year

6,468

(9,025)

10,773

8,216

Balance at 1 August 2015

164,316

4,627

576,609

745,552


income

6,631

451

8,019

15,101



for the year

6,631

451

5,621

12,703


170,947

5,078

582,230

758,255

The University’s reserves comprise the following:

Income and expenditure reserve – endowment reserve which represents the value of donations by individuals in the form of a gift and

is to be invested and only the income earned on that gift may be spent for a specific purpose.

Income and expenditure reserve – restricted reserve which represents the value of the retained surplus in the balance sheet with

restrictions on its distribution.

Income and expenditure reserve – unrestricted reserve which represents the value of the University’s accumulated funds through

surpluses in the income statement.

BALANCE SHEETS as at 31 July 2016

22


Consolidated

2016

University

2016

Consolidated

2015

University

2015

Non-current assets

Note £000 £000 £000 £000

Property, plant & equipment 12 716,784 699,918 674,430 666,392

Investments 14 172,779 191,216 173,485 174,974

889,563 891,134 847,915 841,366

Current assets

Stock 826 635 782 588

Trade and other receivables 15 86,995 90,613 94,801 100,552

Cash and cash equivalents 193,982 184,870 153,741 147,659

281,803 276,118 249,324 248,799

Less: Creditors – amounts falling due

within one year

16

(229,498)

(229,242)

(218,206)

(216,306)

Net current assets 52,305 46,876 31,118 32,493

Total assets less current liabilities

941,868

938,010

879,033

873,859

Creditors: amounts falling due after

more than one year

17

(70,000)

(70,000)

(27,610)

(27,610)

Provisions

Pension provisions 25 (105,265) (105,265) (96,369) (96,369)

Other provisions 18 (4,490) (4,490) (4,328) (4,328)

Total net assets

762,113

758,255

750,726

745,552

Restricted reserves

Income and expenditure reserve –

endowment reserve

19

170,947

170,947

164,316

164,316


restricted reserve

20

5,078

5,078

4,627

4,627

Unrestricted reserves


unrestricted

586,088

582,230

581,783

576,609

Total reserves

762,113

758,255

750,726

745,552

The financial statements on pages 14 to 53 were approved by the University Court of the University of Glasgow on 14 December 2016

and were signed on its behalf by:

Professor Anton Muscatelli Ken Brown Robert Fraser

Principal Convener of Finance Committee Director of Finance

CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2016

23


2016

Cash flow

impact of

GSV

2016

2015

Cash flow from operating activities Note £000 £000 £000 £000

Surplus before tax and exceptional items 33,399 - 33,399 4,897

Exceptional items in income 2,618 - 2,618 26,384

Exceptional items in expenditure - (21,903) (21,903) -

Exceptional items in other (gains)/losses - - - (5,134)

Corporation taxation (581) - (581) (4,492)

Surplus for the year 35,436 (21,903) 13,533 21,655

Adjustment for non-cash items

Depreciation 12 30,882 - 30,882 29,633

Increase in stock (44) - (44) (50)

Decrease / (increase) in debtors 6,923 883 7,806 (33,883)

Increase in creditors falling due within one year 11,291 - 11,291 19,382

Increase/(decrease) in creditors falling due after more than

one year – GSV transaction - release of DCG’s

(1,490)

(26,120)

(27,610)

(1,489)

Pension costs less contributions payable 3,471 - 3,471 19,108

Increase / (decrease) in other provisions 162 - 162 (124)

Changes in values of endowment assets (2,034) - (2,034) (4,350)

Changes in values of other investments 2,278 - 2,278 (2,672)

Adjustment for investing or financing activities -

(Gain)/loss from the sale of property, plant and equipment (1,067) - (1,067) 5,134

Interest payable 8 3,027 - 3,027 2,031

Interest receivable 5 (1,179) - (1,179) (1,219)

Net cash inflow from operating activities

87,656

(47,140)

40,516

53,156

Cash flow from investing activities

Endowment assets acquired (27,540) - (27,540) (35,840)

Receipts from the sale of endowment assets 23,620 - 23,620 35,019

Receipts from the sale of other investments 4,382 - 4,382 -

Payments to acquire property, plant and equipment 12 (58,634) (17,130) (75,764) (64,644)

Proceeds from sale of property, plant and equipment 3,596 - 3,596 1,454

Net cash outflow from investing activities

(54,576)

(17,130)

(71,706)

(64,011)

Cash flows from financing activities

Increase/(decrease) in creditors falling due after more than

one year – GSV transaction - private placement bonds

-

70,000

70,000

-

Interest received 1,179 - 1,179 1,219

Net cash flows from financing activities

1,179

70,000

71,179

1,219

Currency translation 252 - 252 (7)

Increase / (decrease) in cash and cash equivalents in the

year

34,511

5,730

40,241

(9,643)

Cash and cash equivalents at beginning of the year 153,741 163,384

Cash and cash equivalents at end of the year 193,982 153,741

NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 July 2016

24


1 Tuition fees and education

contracts

Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Home and EU students 37,105 37,105 38,293 38,293

Rest of the UK Students 17,752 17,752 12,637 12,637

Overseas students 87,384 84,230 73,332 70,308

Short courses 5,215 5,215 5,144 5,144

Other fees 1,753 1,753 1,756 1,756

Research support grants 12,377 12,377 11,768 11,768

161,586

158,432

142,930

139,906

2 Funding body grants Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Main teaching grant 85,466 85,466 86,680 86,680

Main quality research grant 45,276 45,276 47,317 47,317

Research postgraduate grant 7,375 7,375 6,405 6,405

Knowledge transfer grant 2,394 2,394 2,288 2,288

Infrastructure grants 6,607 6,607 8,880 8,880

Other funding council grants 11,575 11,575 12,467 12,467

158,693

158,693

164,037

164,037

3 Research grants and contracts Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Research Councils 74,122 74,122 65,933 65,933

Charities 46,170 46,170 45,278 45,278

UK Government excluding RDEC 24,069 24,069 24,147 24,147

RDEC (1) 2,618 2,618 20,369 20,369

European Commission 15,142 15,142 12,928 12,928

UK industry 5,734 5,734 5,171 5,171

Overseas 9,400 9,400 8,536 8,536

Other sources 535 535 1,302 1,302

177,790

177,790

183,664

183,664

(1) A proportion of the University’s activities were identified as qualifying R&D in accordance with Chapter 6A, Corporation Taxes

Act 2009. RDEC tax credits have been incorporated in the current year covering the period 1 April 2014 to 31 July 2015.

4 Other income Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Residences and hospitality services 26,273 26,273 27,280 27,280

Other services rendered 27,268 25,109 22,714 21,545

Health authorities 4,552 4,552 4,240 4,240

Other income 16,739 20,208 17,377 20,265

74,832

76,142

71,611

73,330

NOTES TO THE FINANCIAL STATEMENTS Continued

25


5 Investment income Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Income from expendable

endowments

980

980

984

984

Income from permanent endowments 5,320 5,320 5,262 5,262

Endowment management fees 648 648 742 742

Income from short-term investments 1,179 1,113 1,219 972

8,127

8,061

8,207

7,960

6 Donations and endowments Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

New endowments 1,524 1,524 1,312 1,312

1,524

1,524

1,312

1,312

7 Staff costs 2016

£000

2016

£000

2015

£000

2015

£000

By expense type:

Salaries 218,623 216,919 217,513 216,461

Social security costs 19,518 19,220 17,155 16,868

Movement on USS provision 3,991 3,991 21,119 21,119

Other pension costs (note 25) 52,932 52,932 48,471 48,471

295,064

293,062

304,258

302,919

With effect from 1 October 2008, members of the USS and UGPS schemes may elect to give up a portion of their contractual

gross pay equal to their employees’ pension contribution as part of a HMRC approved salary sacrifice scheme. No changes to

staff pensionable salaries or total pension scheme contributions arise from this arrangement. The salaries figures reflect the

reduced gross pay earned by staff and the total pension costs reflect the increased employer contributions under this

arrangement.

Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

By staff category:

Academic departments 148,196 147,353 149,695 148,943

Academic services 16,378 16,378 17,102 17,102

Research grants and contracts 76,397 76,397 80,144 80,144

Residences and hospitality services 3,718 3,718 4,457 4,457

Premises 15,054 15,054 15,661 15,661

Administration and other central

services

26,050

25,067

28,346

27,656

Other income generating 9,271 9,095 8,853 8,956

295,064

293,062

304,258

302,919

Remuneration of the Principal:

Professor Anton Muscatelli 276 271

Contribution in respect of pensions:

Professor Anton Muscatelli 46 43


26


7 Staff costs (continued)

2016

Number

2015

Number

Average full time equivalent staff members by major category

Academic departments 2,545 2,416

Academic services 363 366

Research grants and contracts 1,302 1,263

Residences and hospitality services 113 140

Premises 508 499

Administration and other central services 580 552

Other income generating 176 201

5,587

5,437

Key management personnel: All directors and certain senior employees who have authority and responsibility for planning,

directing and controlling the activities of the group are considered to be key management personnel. Total remuneration in

respect of these individuals is £2,031,634 (2015: £1,932,300).

Remuneration of higher paid staff, including NHS merit awards, but excluding employer's pension contributions and termination

payments fell within the following ranges:

2016 Number 2015 Number

Non clinical Clinical Non clinical Clinical

£100,001 - £110,000 33 14 27 15

£110,001 - £120,000 13 6 16 5

£120,001 - £130,000 12 10 10 11

£130,001 - £140,000 8 11 9 7

£140,001 - £150,000 3 7 4 9

£150,001 - £160,000 3 4 5 6

£160,001 - £170,000 3 9 - 4

£170,001 - £180,000 - 5 1 8

£180,001 - £190,000 1 7 1 11

£190,001 - £200,000 1 2 - 3

£200,001 - £210,000 - 3 - 1

£210,001 - £220,000 - 1 - -

£220,001 - £230,000 - - - -

£230,001 - £240,000 - - - 1

£240,001 - £250,000 - - - -

£250,001 - £260,000 - 1 - -

£260,001 - £270,000 - - - -

£270,001 - £280,000 1 - 1 -

8 Interest and other finance costs Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Net charge on pension schemes

(note 25)

2,963

2,963

2,031

2,031

Interest on private placement bond 64 64 - -

3,027

3,027

2,031

2,031


27


9 Other operating expenses Consolidated

2016

University

2016

Consolidated

2015

University

2015

£000 £000 £000 £000

Academic departments 60,491 60,491 57,405 57,405

Academic services 9,787 9,787 9,117 9,117


Residences and hospitality

services

19,368

19,368

20,058

20,058

Premises 34,041 34,041 32,034 32,034

Administration and other central

services

21,090

21,930

20,767

20,348

Agency staff 2,601 2,081 1,633 1,633

Other income generating 4,083 4,878 6,785 6,463

220,131 221,246 210,193 209,452

Contract cancellation expense 21,903 21,903 - -

242,034

243,149

210,193

209,452

Consolidated Consolidated

Other operating expenses include the following fees (including VAT) in respect

of services provided to the group for:

2016

£000

2015

£000

External auditors’ remuneration in respect of audit services 114 86

External auditors’ remuneration in respect of non-audit services 26 25

Internal auditors’ remuneration in respect of audit services 180 308

Internal auditors’ remuneration in respect of non-audit services 116 146

Operating lease rentals

Land and buildings 3,141 3,421

10 Exceptional items (Consolidated and University) 2016 2015

£000 £000

Included within income:

RDEC tax credits 2,618 20,369

Deferred capital grants released in the year – funding body grants - 3,368

Deferred capital grants released in the year – other income - 2,647

2,618

26,384

Included within expenditure:

Contract cancellation expense in relation to GSV 21,903 -

21,903

-

During the financial year to 31 July 2002 the University concluded an agreement with Glasgow Student Villages Ltd (GSV), a

company limited by guarantee and with charitable status, whereby certain of the University’s Halls of Residence were sold to

that company. The agreement provided that the company would operate and maintain the residences to agreed standards and

that the University would continue to market and allocate rooms to students and provide them with pastoral care. The

University had a future option to repurchase the properties. The financial statements in the prior year reflected the economic

substance of these transactions. Accordingly the property, plant and equipment involved, £33.8m (2014: £34.8m) are included

in land and buildings in the prior year.


28


10 Exceptional items (continued)

On 13 July 2016 the University entered into a commercial agreement with Glasgow Student Villages Ltd (GSV) and its parent

Sanctuary Housing Association to re-purchase the six student residences using £70m of private placement funding. The main

purpose of the deal was to cancel the original contract, refinance the original loan and interest rate swaps taken out by GSV

(and ultimately charged to the University over the contract duration), gain title to the assets and free up short term cash. A net

payment of £64.2m was made to complete the transaction which resulted in the University recording an increase in fixed

assets of £17.1m representing the value of title to the residences, a decrease of £0.9m in prepayments and release of £26.1m

of deferred income associated with the original transaction. The overall result of the transaction was to recognise £21.9m of

costs written off to the income and expenditure account in the current year.

The 2015 exceptional items comprise i) £20.4m in respect of RDEC tax credits included within research income and a

corresponding corporation tax charge of £4.4m in respect of this income ii) deferred capital grants released in respect of

assets on which a loss on disposal arose and is included within the net loss on disposal of fixed assets. The assets were

written off as a result of a reconfiguration of NHS facilities following the move to the Queen Elizabeth University Hospital.

11 Taxation 2016 2015

£000 £000

UK Corporation tax 547 4,447

Singapore corporation tax at 17% on the profits of

UGlasgow Singapore Pte Ltd (2015: 11.8%)

34

45

581

4,492

As an exempt charity the University is potentially exempt from taxation in respect of income or capital gains received within categories covered by section 287 CTA 2009 and sections 471, and 478-488 CTA 2010 (formerly s505 of ICTA 1988) or section 256 of the Taxation of Chargeable Gains Act 1992, to the extent that such income or gains are applied to exclusively charitable purposes. The UK Corporation tax is solely in respect of Research and Development Expenditure Credit grants receivable by the University as described in note 3.

Reconciliation of current year UK corporation tax charge 2016 2015

£000 £000

Surplus after depreciation of property, plant and equipment at valuation

and after exceptional items

14,114

26,147

Surplus on ordinary activities multiplied by the average standard rate of

corporation tax in the UK of 20.00% (2015: 20.67%)

2,823

5,404

Surplus falling within charitable exemption (2,227) (921)

Adjustment in respect of prior year tax rates 23 238

Effect of tax rates in foreign jurisdiction (38) (229)

581

4,492


29


12 Property, plant & equipment

Consolidated:

Freehold land

and buildings

Equipment

Plant and

machinery

Assets under

construction

Total

£000 £000 £000 £000 £000

Cost or valuation:

As at 1 August 2015 701,668 126,650 - 33,795 862,113

Additions 17,130 11,361 - 47,273 75,764

Disposals (3,487) - - - (3,487)

Transfers 45,052 - 11,495 (56,547) -

Assets retired (6,244) (25,388) - - (31,632)

As at 31 July 2016

754,119

112,623

11,495

24,521

902,758

Depreciation:

As at 1 August 2015 92,804 94,879 - - 187,683

Charge for the year 21,036 9,721 125 - 30,882

Eliminated on disposal (2,530) - - - (2,530)

Assets retired (4,673) (25,388) - - (30,061)

As at 31 July 2016

106,637

79,212

125

-

185,974

Net Book Value:

As at 31 July 2016

647,482

33,411

11,370

24,521

716,784

As at 31 July 2015

608,864

31,771

-

33,795

674,430

University:

Freehold land

and buildings

Equipment

Plant and

machinery

Assets under

construction

Total

£000 £000 £000 £000 £000

Cost or valuation:

As at 1 August 2015 701,668 126,353 - 25,757 853,778

Additions 17,130 11,361 - 38,284 66,775

Disposals (3,487) - - - (3,487)

Transfers 39,520 - - (39,520) -

Assets retired (6,244) (25,091) - - (31,335)

As at 31 July 2016

748,587

112,623

-

24,521

885,731

Depreciation:

As at 1 August 2015 92,804 94,582 - - 187,386

Charge for the year 21,000 9,721 - - 30,721

Eliminated on disposal (2,530) - - - (2,530)

Assets retired (4,673) (25,091) - - (29,764)

As at 31 July 2016

106,601

79,212

-

-

185,813

Net Book Value:

As at 31 July 2016

641,986

33,411

-

24,521

699,918

As at 31 July 2015

608,864

31,771

-

25,757

666,392

Due to the change in the University’s capitalisation policy a number of assets have been retired from both freehold land and buildings

and equipment. The loss on the retirement of freehold land and buildings was £1.5m.


30


12 Property, plant & equipment (continued)

Valuations were carried out at 31 July 2014 as part of the transition to FRS 102 using either the depreciated replacement cost

or income generating method where appropriate. The result of the revaluation is an increase in net book value of £143.5m; this

is split between a decrease in cost of £162.1m relating to the 2014 valuation; however, this is offset by a reversal of

accumulated depreciation on revaluation of £305.7m. On transition to FRS 102 the valuation becomes the deemed cost and

these assets are depreciated based on the remaining useful lives.

Property owned by the University includes academic buildings, student residences and other associated properties including a

conference centre, a sports centre and museum and art gallery, none of which is considered to be inalienable. Freehold land

and buildings contains £94.9m of land (2015: £74.6m) which is not depreciated and £24.5m (2015: £33.8m) of assets that are

under construction and have not yet received a charge for depreciation.

13 Heritage assets

The University holds heritage assets across several locations with the main collections in the following areas:

The Hunterian

The Hunterian at the University of Glasgow is Scotland’s oldest public museum and the collections are ‘recognised’ by the

Scottish Government as being of ‘national significance’. The Hunterian has full accreditation through Museums Galleries

Scotland. The museum is home to over a million items ranging from fossils to coins and medals. The museum houses specific

collections such as a permanent display based around the life and work of Lord Kelvin and displays dedicated to the history of

medicine in Scotland, which includes the eminent Scottish physician and obstetrician, William Hunter’s own medical collection

from the 18th century. The Hunterian Art Gallery includes works by the Scottish colourists Peploe and Cadell and a display of

works drawn from the estate of the American artist James McNeill Whistler, bequeathed to the Hunterian. The Charles Rennie

Mackintosh Collection is the largest single holding of his work comprising over 800 drawings, designs and watercolours.

The Anatomy Museum and Zoology Museum are also managed by the Hunterian Museum and Art Gallery. The anatomy

collections consist of William Hunter’s medical teaching material from his career and range from skeletal material to taxidermy.

The Zoology Museum houses most of the major groups of animals but has particular strength in insects, which constitutes 90%

of the 600,000 specimens.

The main Hunterian Museum is open to visitors on Tuesday to Saturday 10am to 5pm and Sundays 11am to 4pm. The Zoology

museum is open Monday to Friday 9am to 5pm. The Hunterian Art Gallery and the Mackintosh House are open to visitors

Tuesday to Saturday 10am to 5pm and Sunday 11am to 4pm. Access to the Anatomy Museum is available by appointment

only. Information about the Hunterian’s policy for the acquisition, preservation and management and disposal of heritage assets

can be found at: http://www.gla.ac.uk/media/media_287267_en.pdf. There have been no significant disposals or acquisitions

during the financial year.

Special Collections

The University of Glasgow’s Special Collections department is one of the foremost resources in Scotland for academic research

and teaching. The collection has been built up over a period of more than 500 years and now contains more than 200,000

manuscript items and approximately 200,000 printed works, including over 1,000 incunabula (books published before 1501).

The collection covers a wide range of subjects including humanities, social and economic history and the history of science and

medicine. Holdings in areas such as medieval and renaissance manuscripts and emblem literature are of world importance.

Special Collections is open to the public Monday to Thursday 9am to 5pm (6pm during term time) and Friday 10am to 5pm.

Special Collections is closed during public holidays. Information about Special Collection’s policy for the acquisition,

preservation and management and disposal of heritage assets can be found at:

www.gla.ac.uk/services/specialcollections/aboutus/developmentpolicy/. There have been no significant disposals or acquisitions

during the financial year.


31


13 Heritage assets (continued)

Archive Services

Glasgow University Archive Services holds the official records of the University created and accumulated since its foundation in

1451, including University related records deposited by staff, alumni and associated organisations, and the records of

predecessor institutions. It also manages the Scottish Business Archive consisting of collections of historical business records

dating from the 18th century to the present day. Archive services are open to the public as follows: Monday to Friday 9.30am to

5pm. Archive Services is closed during public holidays. Information about the Archive Services’ policy for the acquisition,

preservation and management and disposal of heritage assets can be found at:

http://www.gla.ac.uk/media/media_61203_en.pdf.

Annual details can be found at: http://www.gla.ac.uk/services/archives/about/ourperformance/annualreviews/. There have been

no significant disposals or acquisitions during the financial year.

Reliable information on cost or valuation cannot be obtained for the vast majority of collections held within the Hunterian

Museum and Art Gallery, Special Collections and Archive Services. This is because of the diverse nature of the assets held, the

number of assets held and the lack of comparable market values. The University does not therefore recognise these assets on

the balance sheet, other than recent acquisitions which are reported at cost, where the object is purchased, or at the

University’s best estimate of current value where the object is donated and meets the definition of a heritage asset. Acquisitions

in the year to 31 July 2016 do not meet the definition of a heritage asset and therefore are not recognised on the balance sheet.

14 Investments Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Treasury stock at market value 2,010 2,010 2,122 2,122

Unlisted investments at cost 787 20,234 84 9,834

Listed investments at market value 1,010 - 8,261 -

Endowment assets (note 19) 168,972 168,972 163,018 163,018

172,779

191,216

173,485

174,974

The University has a direct interest of 100% in both the ordinary share capital and preference share capital of GU Holdings

Limited, Kelvin Nanotechnology Limited, UOG Utilities Supply Company Limited and UGlasgow Singapore Pte Ltd, registered in

Singapore. GU Holdings Limited owns 100% of the ordinary share capital of GU Heritage Retail Limited.

These companies are incorporated in the consolidated financial statements. In addition the University of Glasgow Trust, an

independent charity set up to collect donations and disburse them for the benefit of the University generally, is consolidated in

these financial statements. During the year, the University increased its capital investment in its unlisted investments, investing

£10,000,000 into UOG Utilities Supplies Company Limited and a further £400,000 into GU Holdings Limited.

Endowment assets

Endowment assets comprise of the following categories of assets:

Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Equities 162,591 162,591 154,689 154,689

Cash on deposit held by the

investment managers

6,381

6,381

8,329

8,329

168,972 168,972 163,018 163,018


32


15 Trade and other receivables Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Amounts falling due within one

year:


Prepayments and other sundry

debtors

26,979

26,129

22,522

21,105

Capital projects - - 4,595 4,595

Salaries recoverable externally 1,808 1,808 1,542 1,542

Courses, consultancies and

contracts

2,998

2,998

2,845

2,845

Net RDEC recoverable 8,654 8,654 15,922 15,922

Amounts due from subsidiaries - 4,468 - 7,168

86,995 90,613 90,969 96,720

Amounts falling due after more

than one year:

Lease incentive - - 3,832 3,832

86,995

90,613

94,801

100,552

16 Creditors: amounts falling due

within one year

Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000


Sundry creditors 26,849 26,629 30,174 30,037

Accruals and sundry provisions 73,904 74,065 71,589 69,662


contracts

19,439

19,439

15,030

15,030

Employment cost liabilities 11,474 11,158 10,119 10,113

Amounts due to subsidiaries - 119 - 170

229,498

229,242

218,206

216,306

Deferred income

Included within creditors: amounts falling due within one year are the following items of income which have been deferred until

specific performance related conditions have been met.

Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Research grants - included within

research grants and contracts

85,832

85,832

77,422

77,422

Grant income - included within

accruals and sundry provisions

4,651

4,651

-

-

Other income - included within


contracts

8,885

8,885

6,552

6,552

99,368

99,368

83,974

83,974


33


17 Creditors: amounts falling due

after more than one year

Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Unsecured private placement bond* 70,000 70,000 - -

Deferred income - - 27,610 27,610

70,000

70,000

27,610

27,610

* In July 2016 unsecured private placement bonds were issued for the sum of £30,000,000 over a 30 year term with a coupon

rate of 2.97%. There are no capital payments to be made over the term, with the bonds maturing in 2046. In addition unsecured

private placement bonds were issued for the sum of £40,000,000 over a 35 year term with a coupon rate of 3.01%. There are

no capital payments to be made over the term, with the bonds maturing in 2051.

The agreement entered into by the University for the private placement bonds funding contains certain covenants on the

University incurring further indebtedness. These restrictions are set out below:

(a) The University shall not permit net debt at any time to exceed 50% of consolidated total assets (before any adjustment is

made for the purposes of retirement obligations).

(b) The University shall not permit the total borrowing costs in relation to any financial year to exceed 7% of the total

consolidated income for that financial year.

(c) The covenants in the agreement shall be tested by reference to the annual financial statements delivered pursuant to the

agreement.

18 Provisions for liabilities

(Consolidated and University)

Funded

pension

liability:

St Andrew’s

College

Unfunded

pension

liability:

St Andrew’s

College

FSSU and ex-

gratia pension

liability

Total

£000 £000 £000 £000

As at 1 August 2015 2,788 1,531 9 4,328

Income

47

-

-

47

Transfer from income &

expenditure account

301

143

-

444

Utilised in year

(161)

(168)

-

(329)

As at 31 July 2016

2,975

1,506

9

4,490

A valuation of the pension liabilities at 31 July 2016 was carried out by the University’s appointed independent actuary, Hymans

Robertson.


34


19 Endowment funds

(Consolidated and

University)

Unrestricted

Permanent

£000

Restricted

Permanent

£000

Total

Permanent

£000

Restricted

Expendable

£000

2016

Total

£000

2015

Total

£000

As at 1 August

Capital value 3,425 116,227 119,652 22,788 142,440 137,363

Accumulated income 592 18,331 18,923 2,953 21,876 20,485

4,017 134,558 138,575 25,741 164,316 157,848

Reclassification of

categories

(2,244)

2,244

-

-

-

-

New endowments - 780 780 744 1,524 1,312

Investment income 73 5,247 5,320 980 6,300 6,246

Expenditure (36) (4,000) (4,036) (1,164) (5,200) (5,465)

Increase

in market value of

investments

43

3,338

3,381

626

4,007

4,375

As at 31 July

1,853

142,167

144,020

26,927

170,947

164,316

Represented by:

Capital value 1,531 122,302 123,833 23,861 147,694 142,440

Accumulated income 322 19,865 20,187 3,066 23,253 21,876

1,853

142,167

144,020

26,927

170,947

164,316

Analysis by type of

purpose:

Lectureships 1,853 61,170 63,023 17,587 80,610 77,472

Scholarships and

bursaries

-

70,100

70,100

9,247

79,347

76,125

Prize funds - 6,052 6,052 93 6,145 5,952

General - 4,845 4,845 - 4,845 4,767

1,853

142,167

144,020

26,927

170,947

164,316

Analysis by asset: Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Current and non-current investments (note 14) 168,972 168,972 163,018 163,018

Cash and cash equivalents 1,975 1,975 1,298 1,298

170,947

170,947

164,316

164,316

Major endowments

Restricted permanent endowments include the Postgraduate Scholarships for Advanced Study and Research which is awarded

to enable graduates or holders of qualifications accepted by the Court to undertake advanced study or research.

The movements on this fund for the year were as follows: £000

Balance at 1 August 2015

Investment income

Expenditure

Increase in market value of investments


28,654

1,080

(1,275)

812

29,271


35


20 Restricted reserves


Capital grants

unspent

2016

Donations

2016

Total

2016

Total

2015

£000 £000 £000 £000

Income and expenditure reserve

As at 1 August 3,384 1,243 4,627 13,652

New grants - - - -

New donations - 1,691 1,691 (28)

Investment income - - - -

Capital grants utilised (1,240) - (1,240) (8,997)

Expenditure - - - -

As at 31 July

2,144

2,934

5,078

4,627

21 Commitments and contingencies

Capital commitments Consolidated

2016

University

2016 Consolidated

2015

University

2015

£000 £000 £000 £000

Commitments contracted at 31 July 20,894 20,664 23,838 15,665

Authorised but not contracted at 31 July 25,866 25,866 38,249 38,249

46,760

46,530

62,087

53,914

Lease commitments as a lessee

The total of future minimum lease payments under non-cancellable operating leases for each of the following periods:

Land and buildings

2016 2015

£000 £000

- Within one year 15,515 2,825

- In two to five years 28,412 2,554

- After more than five years 1,932 4,496

45,859

9,875

Lease payments receivable as a lessor

The total of future minimum lease payments receivable under non-cancellable operating leases for each of the following periods:

Land and buildings

2016 2015

£000 £000

- Within one year 7,700 -

- In two to five years 15,400 -

- After more than five years - -

23,100

-


36


22 Events after the reporting period

There are no events subsequent to the date of the balance sheet that have any material impact on these financial statements.

23 Amounts disbursed as agent


HE Childcare

Fund

HE

Discretionary

Fund

2016

Total

2015

Total

£000 £000 £000 £000

As at 1 August - - - -

Funds received in year 516 1,043 1,559 1,514

Expenditure (204) (1,356) (1,560) (1,517)

Virements (312) 312 - -

Interest - 1 1 3

As at 31 July

-

-

-

-

24 Disclosure of related party transactions

Due to the nature of the University's operations and the composition of the University Court of the University of Glasgow

(“Court”) (being drawn from local, public and private sector organisations), it is inevitable that transactions will take place with

organisations in which a member of Court may have an interest. All transactions involving organisations in which a member of

Court may have an interest are conducted at arm's length and in accordance with the University's financial regulations and

normal procurement procedures. In line with the Scottish Code of Good HE Governance, all members of Court are required to

complete a register of interests to record any areas of potential conflict with the interests of the University.

No material transactions have taken place.


37


25 Pension schemes

The University participates in the following pension schemes:

a) The University of Glasgow Pension Scheme (UGPS);

b) The Strathclyde Pension Fund (SPF);

c) The Universities Superannuation Scheme (USS);

d) The Scottish Teachers’ Pension Scheme (STPS);

e) The National Health Service Pension Scheme (NHSPS);

f) The Federated Superannuation Scheme for Universities (FSSU);

g) The Medical Research Council Pension Scheme (MRCPS);

h) The National Employment Savings Trust (NEST); i) NEST Autoenrol; and ii) NEST Contractual. The total pension costs for the University were as follows: 2016

£000 2015

£000

USS - contributions paid

UGPS - charge to income and expenditure account

SPF - charge to income and expenditure account

Other schemes - contributions paid

38,515

12,318

139

1,960

35,711

11,015

135

1,610

52,932

48,471

With effect from 1 October 2008, members of the USS and UGPS schemes may elect to give up a portion of their contractual

gross pay equal to their employees’ pension contribution as part of a HMRC approved salary sacrifice scheme. No changes to

staff pensionable salaries or total pension scheme contributions arise from this arrangement. The figures within note 7 to the

financial statements reflect the reduced gross pay earned by staff under this arrangement. The total pension costs shown above

and in note 7 reflect the increased employer contributions under this arrangement. Employer contribution percentage rates

quoted below represent only the Employer’s contribution rates specified by the scheme trustees.

For both the UGPS and SPF, pension costs are assessed in accordance with the advice of the actuaries, based on the latest

actuarial valuation of the scheme. The expected cost of providing staff pensions is recognised in the income and expenditure

account on a systematic basis over the expected average remaining lives of members of the pension funds, in accordance with

FRS 102 and recognises retirement benefits as the benefits are earned and not when they are due to be paid. The consolidated

balances for UGPS and SPF as shown in the financial statements and associated notes are as follows:

Pension provisions at 31 July 2016 £000

2015 £000

UGPS net deficit in the scheme (52,635) (48,309)

SPF net deficit in the scheme (643) (1,484)

(53,278) (49,793)

USS deficit reduction plan provision (51,987) (46,576)

Total pension provisions at 31 July

(105,265)

(96,369)

Amount recognised in the Statement of Comprehensive Income

UGPS (3,085) (14,132)

SPF 687 1,327

Total losses for the year (2,398) (12,805)

Total net finance cost UGPS (1,494) (1,165) SPF (49) (113) USS (1,420) (753)

Total net finance cost

(2,963)

(2,031)


38


25 Pension schemes (continued)

Due to the mutual nature of the other schemes, the University is unable to identify its share of the underlying assets and liabilities of the schemes on a consistent and reasonable basis and therefore, as required by FRS 102, accounts for the schemes as if they were defined contribution schemes. As a result, the amount charged to the income and expenditure account represents the contributions payable to the schemes in respect of the accounting period.

a) UGPS

This is a defined benefit scheme which is externally funded and from 31 March 2016 is no longer contracted out of the State

Second Pension. The assets of the scheme are held in a separate trustee-administered fund. The fund is valued every three

years by professionally qualified independent actuaries, the rates of contribution payable being determined by the trustees on

the advice of the actuaries. In the intervening years the actuaries review the progress of the scheme. Pension costs are

assessed in accordance with the advice of the actuaries, based on the latest actuarial valuation of the scheme. The scheme

closed to new members with effect from 1 April 2014. A full actuarial valuation was carried out as at 1 April 2013.

The major assumptions used at 31 July are shown bel ow:

2016 2015 2014

Discount rate 2.50% 3.50% 4.10%

Retail price inflation

Rate of increase in salaries

Rate of increase to pensions in payment

Consumer price inflation

2.70%

2.70%

1.80%

1.70%

3.25%

3.25%

2.25%

2.25%

3.35%

3.35%

2.35%

2.35%

The weighted average life expectancies used to dete rmine benefit obligations are as follows:

2016 2016 2015 2015

Male Female Male Female

Member age 65 (current life expectancy) 22.1 23.8 22.8 24.3

Member age 45 (life expectancy at age 65) 24.8 25.5 25.5 26.0

The assets in the scheme were: Value at 31 July 2016

£000

Value at 31 July 2015

£000


£000

UK equities 52,774 53,982 121,039

Overseas equities 128,287 103,241 80,693

Corporate bonds 41,884 38,462 15,000

Government bonds 76,877 63,092 15,000

Diversified growth fund 73,412 69,839 67,336

Cash 5,364 8,772 548

Total

378,598

337,388

299,616

The following amounts at 31 July 2016 were measured in accordance with the requirements of FRS 102: Value at 31 July

2016 £000

Value at 31 July 2015 £000


Total market value of assets 378,598 337,388 299,616

Present value of liabilities (431,233) (385,697) (334,489) Deficit in the scheme

(52,635)

(48,309)

(34,873)


39



a) UGPS (continued) The University has contributed 22.5% of pensionable salaries over the period to 31 July 2016. Additionally the University made a lump sum deficit reduction contribution of £2.56m in March 2016 (2015: £2.50m). The University expects to continue to make deficit reduction contributions of £2.5m per year increasing by 2.5% per annum from 1 April 2014 to 31 March 2034. The recovery plan will be revisited every three years.

Amount charged to operating surplus:

2016

£000

2015

£000

Current service cost (10,974) (9,932)

Administration costs (1,344) (1,083)

Total operating charge

(12,318)

(11,015)

Other finance costs:

Expected return on scheme assets 11,805 12,328

Interest on scheme liabilities (13,299) (13,493)

Total net return

(1,494)

(1,165)

Total pension cost recognised in the income and exp enditure account

(13,812)

(12,180)

Other Comprehensive Income (OCI):

Actual return on assets excluding amounts included in net interest 29,613 24,414

Actuarial losses on scheme obligations (32,698) (38,546)

Actuarial losses recognised in the OCI

(3,085)

(14,132)

The cumulative loss recognised in the Other Comprehensive Income to date is £18.9m (2015: £15.8m loss).

Movements in present value of scheme assets during the year:

2016

£000

2015

£000

Assets at beginning of the year 337,388 299,616

Movement in year:

Interest income

11,805

12,328

Actual return on assets excluding amounts included in net interest 29,613 24,414

Contributions by the employer 12,571 12,876

Benefits paid (12,779) (11,846)

Assets at the end of the year

378,598

337,388

Movements in present value of scheme liabilities du ring the year: 2016

£000

2015

£000

Liabilities at beginning of the year 385,697 334,489

Movement in year:

Current service cost

10,974

9,932

Administration costs 1,344 1,083

Interest cost 13,299 13,493

Actuarial (gains)/losses 32,698 38,546

Benefits paid (12,779) (11,846)

Liabilities at the end of the year

431,233

385,697


40



a) UGPS (continued)

Details of the experience gains and

losses for the years to 31 July:

2016

£000 2015

£000

2014

£000

2013

£000

2012

£000

Fair value of scheme assets 378,598 337,388 299,616 260,815 208,245

Present value of scheme liabilities (431,233) (385,697) (334,489) (318,497) (327,582)

Deficit in the scheme

(52,635)

(48,309)

(34,873)

(57,682)

(119,337)

b) SPF

This is an externally funded, multi-employer, defined benefit scheme and from 31 March 2016 is no longer contracted out of the

State Second Pension. The element of SPF attributable to the University covers former members of staff at St Andrew’s College

of Education and the Scottish Centre for Research in Education (“SCRE”). SPF is a pool into which employees’ and employers’

contributions and income from investments are paid, and from which pensions and other related benefits are paid out in

accordance with the provisions of the Local Government Pension Scheme. This scheme is a multi-employer defined benefits

scheme and covers past and present employees.

A valuation of the University’s benefit obligation in respect of its members has been estimated by a qualified independent

actuary based on the 31 March 2014 valuation results, rolled forward onto the FRS 102 assumptions at 31 July 2016.

The major assumptions used at 31 July are shown bel ow:

2016 2015 2014

Discount rate 2.50% 3.50% 4.10%

Retail price inflation

Rate of increase in salaries

Rate of increase to pensions in payment

Consumer price inflation

2.70%

2.70%

1.80%

1.70%

3.25%

3.25%

2.25%

2.25%

3.35%

3.35%

2.35%

2.35%

The weighted average life expectancies used to dete rmine benefit obligations are as follows:

2016 2016 2015 2015

Male Female Male Female

Member age 65 (current life expectancy) 22.1 23.8 22.8 24.3

Member age 45 (life expectancy at age 65) 24.8 25.5 25.5 26.0

The assets in the scheme were: Value at 31 July 2016

£000


£000


£000

Equities 10,890 10,183 10,116

Bonds 2,269 1,629 1,597

Property 1,966 1,629 932

Cash - 137 666

Total

15,125

13,578

13,311


41


25 Pension schemes (continued) b) SPF (continued)

The following amounts at 31 July 2016 were measured in accordance with the requirements of FRS 102: Value at 31 July

2016 £000



Total market value of assets 15,125 13,578 13,311

Present value of liabilities (15,768) (15,062) (16,159)


(643)

(1,484)

(2,848)

The University paid contributions to the fund at 24.5% of pensionable salaries over the year to 31 July 2016 and expects to make similar contributions over the next year. Additionally the University has paid £232k of deficit contributions between 1 August 2015 and 31 July 2016 (2015: £155k).

Amount charged to operating surplus: 2016

£000

2015

£000

Current service cost (139) (135)

Total operating charge

(139)

(135)

Other finance costs:

Expected return on scheme assets 468 538

Interest on scheme liabilities (517) (651)

Total net return

(49)

(113)

Total pension cost recognised in the income and exp enditure account (188) (248)

2016 2015

£000 £000

Other Comprehensive Income (OCI):

Actual return on assets excluding amounts included in net interest 1,486 105

Actuarial (losses)/gains on scheme obligations (799) 1,222

Actuarial gains recognised in the OCI

687

1,327

The cumulative loss recognised in the Other Comprehensive Income to date is £0.5m (2015: £1.1m loss).

Movements in present value of scheme assets during the year:

2016

£000

2015

£000

Assets at beginning of the year 13,578 13,311

Movement in year:

Interest income

468

538

Actual return on assets excluding amounts included in net interest 1,486 105

Contributions by the employer 342 285

Contributions by the scheme participants 29 32

Benefits paid (778) (693)

Assets at the end of the year

15,125

13,578


42


25 Pension schemes (continued) b) SPF (continued)

Movements in present value of scheme liabilities du ring the year:

2016

£000

2015

£000

Liabilities at beginning of the year 15,062 16,159

Movement in year:

Current service cost

139

135

Interest cost 517 651

Actuarial losses/(gains) on scheme obligations 799 (1,222)

Contributions by the scheme participants 29 32

Benefits paid (778) (693)

Liabilities at the end of the year

15,768

15,062

Details of the experience gains and losses

for the years to 31 July:

2016

£000 2015

£000

2014

£000

2013

£000

2012

£000

Fair value of scheme assets 15,125 13,578 13,311 12,900 11,186

Present value of scheme liabilities (15,768) (15,062) (16,159) (14,818) (14,339)


(643)

(1,484)

(2,848)

(1,918)

(3,153)

c) USS 2016

£000

2015

£000

USS deficit reduction plan provision

At beginning of the year (46,576) (24,704)

Utilised in the year 2,110 3,902

Revaluation/additions in the period (6,101) (25,021)

Unwinding of the discount rate (1,420) (753)

USS deficit reduction plan provision at 31 July

(51,987)

(46,576)

The Universities Superannuation Scheme (USS) is a UK-wide scheme which throughout the current and preceding periods was

a defined benefit only pension scheme and until 31 March 2016 was contracted out of the State Second Pension (S2P). The

assets of the scheme are held in a separate trustee-administered fund. Because of the mutual nature of the scheme, the

schemes assets are not hypothecated to individual institutions and a scheme-wide contribution rate is set. The institution is

therefore exposed to actuarial risks associated with other institutions’ employees and is unable to identify its share of the

underlying assets and liabilities of the scheme on a consistent and reasonable basis and therefore, as is required by Section 28

of FRS 102 “Employee benefits”, accounts for the scheme as if it were a defined contribution scheme. As a result, the amount

charged to the income and expenditure account represents the contributions payable to the scheme in respect of the

accounting period.

On conversion to FRS 102, the University has recognised a provision for the present value of the deficit reduction plan for the

USS scheme.

The University is required to contribute a specified percentage of payroll costs to the pension scheme to fund the benefits

payable to the University’s employees. From 1 April 2016 this percentage increased from 16% to 18% (2015: 16%). The total

USS pension cost for the University was £38.5m (2015: £35.7m). This includes £3.5m (2015: £3m) of outstanding contributions

at the balance sheet date. The latest available full actuarial valuation of the scheme was at 31st March 2014 (“the valuation

date”), which was carried out using the projected unit method. Since the institution cannot identify its share of scheme assets

and liabilities, the following disclosures reflect those relevant for the scheme as a whole.


43



c) USS (continued) The 2014 valuation was the third valuation for USS under the scheme-specific funding regime introduced by the Pensions Act

2004, which requires schemes to adopt a statutory funding objective, which is to have sufficient and appropriate assets to cover

their technical provisions. At the valuation date, the value of the assets of the scheme was £41.6 billion and the value of the

scheme’s technical provisions was £46.9 billion, indicating a shortfall of £5.3 billion. The assets were therefore sufficient to

cover 89% of the benefits which had accrued to members after allowing for expected future increases in earnings.

Defined benefit liability numbers for the scheme have been produced using the following assumptions:

2016 2015

Discount rate 3.6% 3.3%

Pensionable salary growth

n/a

3.5% in the first year

and 4.0% thereafter

Price inflation (CPI) 2.2% 2.2%

The main demographic assumption used relates to the mortality assumptions. Mortality in retirement is assumed to be in line

with the Continuous Mortality Investigation's (CMI) S1NA tables as follows:

Male members’ mortality S1NA [“light”] YoB tables – no age rating

Female members’ mortality S1NA [“light”] YoB tables – rated down one year

Use of these mortality tables reasonably reflects the actual USS experience. To allow for further improvements in mortality rates

the CMI 2014 projections with a 1.5% pa long term rate were also adopted. The current life expectancies on retirement at age

65 are:

2016 2015

Males currently aged 65 (years) 24.3 24.2

Females currently aged 65 (years) 26.5 26.3

Males currently aged 45 (years) 26.4 26.2

Females currently aged 45 (years) 28.8 28.6

Existing benefits 2016 2015

Scheme assets £49.8bn £49.0bn

Total scheme liabilities £58.3bn £67.6bn

FRS 102 total scheme deficit £8.5bn £18.6bn

FRS 102 total funding level 85% 72%

d) STPS

Former members of the academic staff of St Andrew’s College of Education are covered by the Scottish Teachers Pension

Scheme (STPS). STPS is a Scottish-wide scheme which throughout the current and preceding periods was a defined benefit

only pension scheme and until 31 March 2016 was contracted out of the State Second Pension (S2P). Under the definitions set

out in FRS 102, the STPS is a multi-employer scheme. The University of Glasgow is unable to identify its share of the

underlying assets and liabilities of the scheme. Accordingly, the University has applied the exemption in FRS 102 and has

accounted as if it were a defined contribution scheme. An actuarial assessment was carried out at 31 March 2012. The Scheme

had total liabilities, for service to the 31 March 2012 of £20.9 billion and notional assets of £19.6 billion giving a notional past

service deficit of £1.3 billion.


44


25 Pension schemes (continued) d) STPS (continued) With effect from 1st April 2014 employees’ regular contributions moved to a tiered system with a minimum amount of 6.4% of

pensionable salary and a maximum amount of 12.4% of pensionable salary. The total pension cost for the institution was £89k

(2015: £88k). This includes £7k (2015: £7k) of outstanding contributions at the balance sheet date. Employees’ regular

contributions were £59k (2015: £66k) and £6.8k (2015: £5.5k) in respect of additional voluntary contributions.

e) NHSPS

NHS Pension Scheme (Scotland) (NHSPS) is a Scottish-wide scheme which throughout the current and preceding periods was

a defined benefit only pension scheme and until 31st March 2016 was contracted out of the State Second Pension (S2P). The

scheme is an unfunded multi-employer defined benefit scheme. It is accepted that the treatment can be as a defined

contribution scheme as the University of Glasgow is unable to identify its share of the underlying assets and liabilities of the

scheme. An actuarial assessment was carried out at 31 March 2012. The Scheme had total liabilities, for service to the 31

March 2012 of £28.2 billion and notional assets of £26.8 billion giving a notional past service deficit of £1.4 billion. As the

scheme is unfunded there can be no surplus or shortfall. Pension contribution rates will be set by the schemes actuary at a level

to meet the cost of pensions as they accrue.

Financial assumptions at 31 March 2012

Discount Rate 3% pa real; 5.06% pa nominal

Pension increase: 2% pa

Long term salary growth: 4.75% pa, 2.75% pa in excess of assumed CPI

The total pension cost for the University was £691k (2015: £698k). This includes £56k (2015: £58k) of outstanding contributions

at the balance sheet date. Employees’ regular contributions were £487k (2015: £513k) and £7k (2015: £6k) in respect of

additional voluntary contributions.

f) FSSU

FSSU is a defined benefit scheme that is not-contracted out of the State Second Pension (S2P) and covers a very small

number of academic staff who did not transfer to USS when it was introduced in 1975. Pension provision is by means of

assurance policies, selected by the member from a panel and held in trust by the Trustees. Premiums on policies are paid

annually in advance by Court, which then recovers the appropriate members’ contributions by deduction from salary.

Adjustments are made in respect of prepaid premiums in arriving at the charge for the year. Persons retiring or who have

already retired under the scheme are entitled of right to additional benefits that may arise under the FSSU Supplementation

scheme. These additional benefits are unfunded and are paid direct to retired members by Court. Full provision has been made

in the year for the actuarial valuation of the liabilities of this scheme. As at the balance sheet date there are no contributing

members due to the last contributing member retiring on 30 September 2014.

g) MRCPS

Former members of staff of the Medical Research Council (MRC) transferred to the University of Glasgow under TUPE

regulations are covered by the MRCPS, which is a multi-employer defined benefits scheme. Under the definitions set out in

FRS 102, the MRCPS is a multi-employer scheme. The University of Glasgow is unable to identify its share of the underlying

assets and liabilities of the scheme. Accordingly, the University has taken advantage of the exemption in FRS 102 and has

accounted as if it were a defined contribution scheme. The following information is available on the scheme:

The MRC operates a funded pension scheme (MRCPS) providing benefits based on service and final pensionable pay at the

normal retirement age of 65. The scheme is a defined benefit scheme that prepares its own scheme statements. Benefits

accrue at the rate of 1/80th of pensionable salary for each year of service. In addition a lump sum equivalent to three years’

pension is payable on retirement. Members pay contributions of between 6.0% and 6.5% pensionable earnings to the Scheme.

In addition to the principal section, the supplementary benefits section exists to provide additional benefits in the event of ill-

health retirement or death-in-service. It is solely funded by members’ contributions.


45



g) MRCPS (continued)

The required MRCPS contribution rate is assessed every three years in accordance with advice of the Government Actuary.

The latest actuarial assessment of the MRCPS was at 31 December 2013 at which showed a surplus of £160.1m (2010

valuation: £82.1m) and the market value of the assets of the MRCPS was £1,054m (2010: £884m), an ongoing funding level of

118% (2010 valuation: 110%). The actuarial value of the assets was sufficient to cover 118% of the benefits that had accrued to

members after allowing for expected future increases in earnings. Triennial valuations are conducted under the Pensions Act

2004 on a scheme specific funding basis. The present MRCPS employers’ contribution rate is 14.9%.

The valuation below has been based on the data for the most recent actuarial valuations as at 31 December 2013, and updated

to take account of the requirements of International Accounting Standard 19 in order to assess the liabilities of the scheme at 31

March 2015. The mortality assumptions included within the figures are that male (female) members who retire at typical ages

will live to approximately age 88 (90).

Financial assumptions used to calculate scheme liabilities as at 31 March 2015:

Rate of increase on pensionable salaries 2.85%

Rate of increase on pension payments 1.85%

Discount rate 3.10%

Inflation rate 1.85%

Expected return on equities 3.10%

Expected return on bonds 3.10%

The results of any actuarial calculation are inherently uncertain because of the assumptions which must be made. The table

below indicates the approximate effects on the actuarial liability as at 31 March 2015 of changes to the main actuarial

assumptions.

Change in assumption

Approximate effect on total

liability

Discount rate -1/2% a year +10.5% +127m

Rate of increase in earnings -1/2% a year -1.5% -£18m

Rate of increase in pensions -1/2% a year -7.0% -£84m

Removing age rate for pensioner mortality +2.5% +£30m

The total pension cost for the University was £396k (2015: £464k). This includes £31k (2015: £37K) of outstanding contributions

at the balance sheet date. Employees’ regular contributions were £172k (2015: £201k) and £27k (2015: £37k) in respect of

additional voluntary contributions.

h) NEST NEST is a defined contribution scheme that is not-contracted out of the State Second Pension (S2P) and covers qualifying

workers under the NEST Autoenrol section of the scheme, and a number of support staff who had previously opted-out of

UGPS under the NEST contractual section of the scheme. From 1st April 2014 it covers new members of staff who would

previously have been eligible for UGPS. NEST has been set up by the government to assist employers in fulfilling their

obligations under the Auto-Enrolment regulations. The University’s staging date for Auto-Enrolment was 1st April 2013 and has

since ‘re-staged’ at 1 April 2016. The total pension cost for the University was £725k (2015: £360k). This includes £72k (2015:

£42k) of outstanding contributions at the balance sheet date. Employees’ regular contributions were £301k (2015: £158k).


46


26 Retranslation from previously published results to FRS 102 and the 2015 SORP

As explained in the accounting policies, these are the University's first financial statements prepared in accordance with FRS 102 and the new

FEHE SORP (2015 SORP). In preparing its FRS 102, SORP based Balance Sheet; the University has adjusted amounts previously reported

in financial statements prepared in accordance with the previous basis of accounting (2007 SORP). An explanation of how the transition to

FRS 102 and the SORP has affected the University's balance sheet, financial performance and cash flows is set out in the following tables.

1 August 2014 31 July 2015

Balance Sheet Note Consolidated University Consolidated University

£000 £000 £000 £000

Total reserves under 2007 SORP 632,292 627,745 683,808 678,634

Revaluation of property, plant and equipment (1) 143,520 143,520 138,303 138,303

Provision for USS pension deficit reduction plan (4) (24,704) (24,704) (46,576) (46,576)

Release of deferred capital grants (3) - - (7,600) (7,600)

Release of capital grants (3) 12,381 12,381 3,384 3,384

Release of equipment grants (3) 6,174 6,174 6,689 6,689

Release of other grants (3) 535 535 447 447

Holiday pay accrual (3) (5,144) (5,144) (7,401) (7,401)

Recognition of income from fundraising (3) 4,657 4,657 6,039 6,039

Recognition of income from donations (3) 1,271 1,271 1,243 1,243

Reclassification of deferred capital grants from

reserves to creditors falling due after more than

one year

(5)

(29,099)

(29,099)

(27,610)

(27,610)

Total effect of transition to FRS 102 109,591 109,591 66,918 66,918

Total reserves under FRS 102

741,883

737,336

750,726

745,552

Year to 31 July 2015

Financial performance Note Consolidated University

£000 £000

Surplus for the year 45,484 46,057

Actuarial loss in respect of pension schemes (20,811) (20,811)

Exchange differences on translation of subsidiary undertakings (7) -

Income for the year under SORP 2007 after actuarial loss and currency translation 24,666 25,246

Revaluation of property, plant and equipment (13) (5,217) (5,217)

Provision for USS pension deficit reduction plan and other pension changes (10 & 12) (21,872) (21,872)

Release of deferred capital grants – funding body grants (7) 7,576 7,576

– research grants and contracts (8) 9,677 9,677

– other operating income (9) (3,461) (3,461)

Release of capital grants – funding body grants (7) (8,997) (8,997)

Release of equipment grants – research grants and contracts (8) 1,033 1,033

– other operating income (9) (518) (518)

Release of other grants – other operating income (9) (88) (88)

Holiday pay accrual (12) (2,257) (2,257)

Recognition of income from fundraising – other operating income (9) 1,382 1,382

Recognition of income from donations – research grants and contracts (8) (28) (28)

Reclassification from statement of recognised gains and losses to income statement (11) 1,312 1,312

Reclassification from statement of recognised gains and losses to income statement (11) 5,635 4,428

Total effect of transition to FRS 102 (15,823) (17,030)

Total comprehensive income under FRS 102

8,843

8,216


47


26 Retranslation from previously published results to FRS 102 and the 2015 SORP (continued)

1 August 2014 31 July 2015

Consolidated

Note Previously

published

results

Effect of

transition to

FRS 102

FRS

102

Previously

published

results

Effect of

transition

to FRS 102

FRS

102

Non-current assets £000 £000 £000 £000 £000 £000

Property, plant & equipment (1) 502,487 143,520 646,007 536,127 138,303 674,430

Investments (2) 165,643 (1,286) 164,357 174,783 (1,298) 173,485

668,130 142,234 810,364 710,910 137,005 847,915

Current assets

Stock 732 - 732 782 - 782

Trade and other receivables 60,917 - 60,917 94,801 - 94,801

Investments 48,032 - 48,032 87,179 - 87,179

Cash and cash equivalents 115,352 - 115,352 66,562 - 66,562

225,033 - 225,033 249,324 - 249,324

Less: Creditors – amounts falling

due within one year

(3)

(218,698)

21,160

(197,538)

(222,305)

4,099

(218,206)

Net current assets 6,335 21,160 27,495 27,019 4,099 31,118

Total assets less current

liabilities

674,465

163,394

837,859

737,929

141,104

879,033

Creditors: amounts falling due


(5)

-

(29,099)

(29,099)

-

(27,610)

(27,610)

Provisions

Pension provisions (4) (37,721) (24,704) (62,425) (49,793) (46,576) (96,369)

Other provisions (4,452) - (4,452) (4,328) - (4,328)

Total net assets 632,292 109,591 741,883 683,808 66,918 750,726

Restricted reserves


– endowment reserve

157,848

-

157,848

164,316

-

164,316


– restricted reserve

-

13,652

13,652

-

4,627

4,627



– unrestricted

(6)

127,329

505,479

632,808

166,736

511,416

678,152

Deferred income (3) 230,795 (230,795) - 250,698 (250,698) -

Pension reserve (4) (37,721) (24,704) (62,425) (49,793) (46,576) (96,369)

Revaluation reserve (1) 154,041 (154,041) - 151,851 (151,851) -

Total reserves 632,292 109,591 741,883 683,808 66,918 750,726


48



1 August 2014 31 July 2015

University

Note Previously

published

results

Effect of

transition to

FRS 102

FRS

102

Previously

published

results

Effect of

transition

to FRS 102

FRS

102

Non-current assets £000 £000 £000 £000 £000 £000

Property, plant & equipment (1) 502,487 143,520 646,007 528,089 138,303 666,392

Investments (2) 160,251 (1,286) 158,965 176,272 (1,298) 174,974

662,738 142,234 804,972 704,361 137,005 841,366

Current assets

Stock 564 - 564 588 - 588

Trade and other receivables 64,510 - 64,510 100,552 - 100,552

Investments 48,032 - 48,032 87,179 - 87,179

Cash and cash equivalents 112,592 - 112,592 60,480 - 60,480

225,698 - 225,698 248,799 - 248,799

Less: Creditors – amounts falling

due within one year

(3)

(218,518)

21,160

(197,358)

(220,405)

4,099

(216,306)

Net current assets 7,180 21,160 28,340 28,394 4,099 32,493

Total assets less current

liabilities

669,918

163,394

833,312

732,755

141,104

873,859

Creditors: amounts falling due


(5)

-

(29,099)

(29,099)

-

(27,610)

(27,610)

Provisions

Pension provisions (4) (37,721) (24,704) (62,425) (49,793) (46,576) (96,369)

Other provisions (4,452) - (4,452) (4,328) - (4,328)

Total net assets 627,745 109,591 737,336 678,634 66,918 745,552

Restricted reserves

Income and expenditure

reserve – endowment reserve

157,848

-

157,848

164,316

-

164,316


reserve – restricted reserve

-

13,652

13,652

-

4,627

4,627



reserve – unrestricted

(6)

125,172

503,089

628,261

165,159

507,819

672,978

Deferred income (3) 230,795 (230,795) - 250,698 (250,698) -

Pension reserve (4) (37,721) (24,704) (62,425) (49,793) (46,576) (96,369)

Revaluation reserve (1) 151,651 (151,651) - 148,254 (148,254) -

Total reserves 627,745 109,591 737,336 678,634 66,918 745,552


49



Definitions of terms in FRS 102

Non-exchange transaction - A transaction whereby an entity receives value from another entity without directly giving approximately equal

value in exchange, or gives value to another entity without directly receiving approximately equal value in exchange.

Deemed cost - An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation

assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed cost.

Performance related condition - A condition that requires the performance of a particular level of service or units of output to be delivered,

with payment of, or entitlement to, the resources conditional on that performance.

(1) Property, plant and equipment and revaluation r eserve

The group has elected to treat the valuation of property, plant and equipment as deemed cost on transition through the provisions of

Section 35 Transition to FRS 102. The group revalued the majority of its assets resulting in an increase in property, plant and equipment by

£143,520,000 and £138,303,000 for the group and University at 31 July 2014 and 31 July 2015 respectively. The previous revaluation

reserve which had been recognised in both the consolidated and University balance sheet has been transferred to general reserves; this

resulted in an adjustment of £154,041,000 and £151,851,000 for the group and £151,651,000 and £148,254,000 for the University at 31

July 2014 and 31 July 2015 respectively.

(2) Investments

Under the 2007 SORP endowment assets were shown separately on the balance sheet. Under the 2015 SORP they are instead shown

under the asset category that the funds relate to (i.e. as investments, cash etc). There is a £1,286,000 adjustment between endowment

assets and current liabilities for 31 July 2014 and £1,298,000 for 31 July 2015 for both the group and the University. This reflects cash

received but not transferred to the investment managers.

(3) Creditors: amounts falling due within one year

As a result of the transition to FRS 102 there were a number of adjustments to creditors: amounts falling due within one year, these are

outlined as follows:

31 July 2014 31 July 2015

Non exchange transactions: £000 £000

Release of capital grants 12,381 3,384

Release of equipment grants 6,174 6,689

Release of other grants 535 447

Recognition of income from fundraising 4,657 6,039

Recognition of income from donations 1,271 1,243

25,018 17,802

Other adjustments:

Recognition of holiday pay accrual (5,144) (7,401)

Reclassification of endowments (2) 1,286 1,298

Recognition of deferred capital grants - (7,600)

21,160 4,099

Under FRS 102, Section 34, Specialised Activities, Incoming Resources from Non-Exchange Transactions notes that an entity shall

recognise receipts of resources from non-exchange transactions when performance conditions are met. Under the provisions of this section

the University has transferred a number of non-exchange transactions from current liabilities and accruals totalling £25,018,000 and

£17,802,000 for the group and the University at 31 July 2014 and 31 July 2015 respectively.


50



(3) Creditors: amounts falling due within one year (continued)

As part of the transition to performance related conditions, the University has released its deferred capital grants specific reserve to general

reserves which has resulted in a movement of £201,697,000 and £223,088,000 for the group and £201,697,000 and £223,088,000 for the

University at 31 July 2014 and 31 July 2015 respectively. The remainder of the balance of deferred capital grants is discussed below in (5).

The University has also reclassified two deferred capital grants under the transition to performance related conditions of the above section

this resulted in a movement to creditors of £7,600,000 for the group and University for the year ended 31 July 2015.

Under FRS 102, the University is required to accrue for all holiday entitlement earned but not taken at the balance sheet date. The impact

is to create a holiday pay accrual of £5,144,000 and £7,401,000 for the group and University at 31 July 2014 and 31 July 2015 respectively.

(4) Pension provisions and deficit reduction plan r ecognition

Under previous UK GAAP the Universities Superannuation Scheme (USS), a UK-wide defined benefit scheme, was accounted for by the

University as a defined contribution scheme. Under FRS 102, the University has recognised its commitment to fund a deficit reduction plan

for the scheme. At 31 July 2014 and 31 July 2015, the present value of the provision was £24,704,000 and £46,576,000 for both the group

and the University.

(5) Reclassifications

In connection with the release of its deferred capital grants noted above in (3) the University reclassified its deferred income related to the

Glasgow Student Villages from deferred income in reserves to creditors falling due after more than one year. This resulted in a

reclassification of £29,099,000 and £27,610,000 for the group and £29,099,000 and £27,610,000 for the University at 31 July 2014 and 31

July 2015 respectively.

(6) Income and expenditure reserve – unrestricted

1 August 2014 31 July 2015

Balance Sheet Note Consolidated University Consolidated University

£000 £000 £000 £000

Income and expenditure reserve -

unrestricted

127,329

125,172

166,736

165,159

Revaluation of property, plant and

equipment

(1)

143,520

143,520

138,303

138,303

Release of revaluation reserve to general

reserves

(1)

154,041

151,651

151,851

148,254

Release of deferred capital grants (3) 201,696 201,696 215,488 215,488

Recognition of income from fundraising (3) 4,657 4,657 6,039 6,039

Release of equipment grants (3) 6,174 6,174 6,689 6,689

Release of other grants (3) 535 535 447 447

Holiday pay accrual (3) (5,144) (5,144) (7,401) (7,401)

Total effect of transition to FRS 102 505,479 503,089 511,416 507,819

Total reserves under FRS 102

632,808

628,261

678,152

672,978


51




Consolidated Previously

published

results

Effect of

transition

to FRS 102

FRS 102

£000 £000 £000

Income

Tuition fees and education contracts 142,930 - 142,930

Funding body grants (7) 165,458 (1,421) 164,037

Research grants and contracts (8) 172,982 10,682 183,664

Other income (9) 74,296 (2,685) 71,611

Investment income (10) 13,653 (5,446) 8,207

Donations and endowments (11) - 1,312 1,312

Total income 569,319 2,442 571,761

Expenditure

Staff costs (12) 279,600 24,658 304,258

Other operating expenses 210,193 - 210,193

Depreciation (13) 24,416 5,217 29,633

Interest and other finance costs (10) - 2,031 2,031

Total expenditure 514,209 31,906 546,115

Surplus before other gains losses 55,110 (29,464) 25,646

Loss on disposal of property, plant and

equipment

(5,134)

-

(5,134)

Gain on investments (11) - 5,635 5,635

Surplus before tax 49,976 (23,829) 26,147

Taxation

(4,492)

-

(4,492)

Surplus for the year 45,484 (23,829) 21,655

Actuarial loss in respect of pension schemes (10) (20,811) 8,006 (12,805)

Exchange differences on translation of

subsidiary undertakings

(7)

-

(7)

Total comprehensive income for the year 24,666 (15,823) 8,843

Represented by

Endowment comprehensive income for the year 6,468 - 6,468

Restricted comprehensive loss for the year (9,025) - (9,025)

Unrestricted comprehensive income for the year 27,223 (15,823) 11,400

24,666 (15,823) 8,843


52




University Previously

published

results

Effect of

transition

to FRS 102

FRS 102

£000 £000 £000

Income

Tuition fees and education contracts 139,906 - 139,906

Funding body grants (7) 165,458 (1,421) 164,037

Research grants and contracts (8) 172,982 10,682 183,664

Other income (9) 76,015 (2,685) 73,330

Investment income (10) 13,406 (5,446) 7,960

Donations and endowments (11) - 1,312 1,312

Total income 567,767 2,442 570,209

Expenditure

Staff costs (12) 278,261 24,658 302,919

Other operating expenses 209,452 - 209,452

Depreciation (13) 24,416 5,217 29,633

Interest and other finance costs (10) - 2,031 2,031

Total expenditure 512,129 31,906 544,035

Surplus before other gains losses 55,638 (29,464) 26,174

Loss on disposal of property, plant and

equipment

(5,134)

-

(5,134)

Gain on investments (11) - 4,428 4,428

Surplus before tax 50,504 (25,036) 25,468

Taxation

(4,447)

-

(4,447)

Surplus for the year 46,057 (25,036) 21,021

Actuarial loss in respect of pension schemes (10) (20,811) 8,006 (12,805)

Total comprehensive income for the year 25,246 (17,030) 8,216

Represented by

Endowment comprehensive income for the year 6,468 - 6,468

Restricted comprehensive loss for the year (9,025) - (9,025)

Unrestricted comprehensive income for the year 27,803 (17,030) 10,773

25,246 (17,030) 8,216

(7) Funding body grants

Under the provisions of FRS 102 the University has released a number of non-exchange transactions to the income statement

resulting in a decrease in income of £8,997,000 for the movement on capital grants and an increase in income of £7,576,000 for the

release of deferred capital grants both affecting the funding body grants line for the group and University at 31 July 2015. The overall

result is a decrease in income for funding body grants of £1,421,000.


53



(8) Research grants and contracts


resulting in an increase in income of £10,682,000 to research grants and contracts for both the group and University at 31 July 2015.

31 July 2015

£000

Recognition of income from donations (28)

Release of deferred capital grants 9,677

Release of equipment grants 1,033

10,682

(9) Other operating income


resulting in an overall decrease to income on the other operating income line of £2,685,000 for the group and University at 31 July

2015.

31 July 2015

£000

Recognition of income from fundraising 1,382

Movement on deferred capital grants (3,461)

Movement on equipment grants (518)

Movement on other grants (88)

(2,685)

(10) Investment income, interest and other finance costs and actuarial loss of pension schemes

There is a change under FRS 102 to the method of calculating the pension cost interest charge to the income statement for defined

benefit schemes. Under previous UK GAAP the interest on the expected return on net assets was calculated using an expected

asset return discount rate; however, under FRS 102 the interest is calculated using the discount rate for obligations. This resulted in

the reversal of the previously booked finance credit of £5,446,000 to investment income for 31 July 2015 and the subsequent booking

of an interest charge of £1,278,000 to interest and other finance costs. This further resulted in an adjustment to the actuarial loss in

respect of pension schemes of £8,006,000 for the group and University. The University has also recognised its obligation to the

deficit reduction plan of the Universities Superannuation Scheme (USS), a UK-wide defined benefit scheme which is accounted for

by the University as a defined contribution scheme this resulted in a finance charge of £753,000 for the group and University at 31

July 2015. The results of the above transactions are effectively a reclassification between the income statement and the other

comprehensive income.

(11) Donations and endowments and gain on investmen ts

Under previous GAAP the new bequests for endowments and the gain on appreciation of endowment assets and investments were

recognised in the Statement of Total Recognised Gains and Losses, these are now recorded in the income statement and represent

£1,312,000 of an adjustment to donations and endowments for both the group and University. The adjustment to gain on investments

represents £4,375,000 of appreciation on endowments and £1,260,000 of gain on investments for the group at 31 July 2015. The

adjustment to gain on investments represents £4,375,000 of appreciation on endowments and £53,000 of gain on investments for the

University at 31 July 2015.

(12) Staff costs

Under FRS 102, the University is required to accrue for all holiday entitlement earned but not taken at the date of the balance sheet.

The impact is to increase the staff cost expense by £2,257,000 for the year which is the movement on the accrual between 31 July

2014 and 31 July 2015. The recognition of the deficit reduction plan for the Universities Superannuation Scheme (USS) resulted in an

additional charge to staff costs of £21,119,000 for the year ended 31 July 2015 for both the group and the University. The finance

charge of the USS pension noted in (10) accounts for the balance of the movement on the provision year on year. The change to

FRS 102 also resulted in an additional charge to other pension costs for the administration costs of the UGPS and SPF pension

schemes amounting to £1,082,000 and as well as a £200,000 uplift in the interest cost.

(13) Depreciation

As part of the transition the group also componentised its assets with different useful lives, which, along with the revaluation, resulted

in an additional depreciation charge of £5,217,000.


University Avenue

Glasgow G12 8QQ

Scotland, UK

Tel: +44 (0)141 330 2000

www.glasgow.ac.uk

The University of Glasgow, charity number SC004401

Speaker Heather Cousins Urgency Low

Speaker role Chair of Audit Committee TimingRevision to Audit Committee remit to be implemented immediately if approved

Paper Description Audit Committee report to Court Red‐Amber‐Green Rating GreenTopic last discussed at Court Last Audit Committee Report October 2016 Paper Type Decision on one item/Information/DiscussionTopic discussed at Committee See paper summary section Paper SummaryCommittee members present Heather Cousins, Duncan Ross, Lesley Sutherland Minutes of the last meeting of the Committee; revised Remit for the Committee; Annual Report

from Audit Committee to Court

Court is asked to consider/approve revisions to the remit of the Committee, which have been agreed by the Committee following a review of best practice; and to approve a change of name to Audit and Risk Committee

For Approval ‐ Annex 1

Court is asked to note the annual report from the Committee, for 2015/16 For noting ‐ Annex 2For Noting (summary of meeting of Audit Committee held on 8 November 2016):

The Committee received reports on internal audit reviews of Data Governance, MyCampusenrolment, Risk Management Arrangements in Colleges, and Corporate Governance(Remuneration Committee). The internal auditors provided the Committee with an annualreport, which concluded that for 2015/16, governance, risk management and control, and valuefor money arrangements in relation to business critical areas, were generally satisfactory, butthere were some areas of weakness or non‐compliance with processes which potentially put theachievement of institutional objectives at risk. The Committee received the University's financialstatements for the year ended 31 July 2016, noting the main areas where the 2015 SORP hadimpacted on them. The external auditors summarised that there had been a strong yearfinancially, with tuition fee and research growth, and an increase in the capital balance. TheCommittee received and noted a review of the University as a going concern. The Committeeheard that on the basis of w

For noting

Cost of proposed plan Topics to be discussedRevised Remit of Audit Committee; Annual report (the latter for noting/information)

Major benefit of proposed plan Action from CourtDecision on one item/rest for Noting/Information/Discussion

Revenue from proposed plan Recommendation to Court Approval of revised remit and Committee nameDemographics Relevant Strategic Plan workstream

% of University

Cross University application on several items Most relevant Primary KPI it will help the university to achieve

Most relevant Secondary KPI it will help the university to achieveRisk register ‐ university levelRisk register ‐ college levelOther universities that have done something similarOther universities that will do something similarRelevant Legislation Finance Reporting standards; Data Protection ActEquality Impact AssessmentSuggested next stepsAny other observations

Campus AllExternal bodiesConflict areas

Court Context Card ‐ Audit Committee Report 14th December 2016

1

UNIVERSITY OF GLASGOW

Audit Committee

Minute of Meeting held on Tuesday 8 November 2016 in the Melville Room, Main Building

Present: Mr Simon Bishop (SB), Ms Heather Cousins (HC) (chair), Mr Neil Menzies (NM), Dr Duncan Ross (DR), Ms Lesley Sutherland (LS), Mr David Watt (DJW)

In attendance: Mr Ken Baldwin (Ernst & Young) (KB), Mr Gregor Caldow, Group Financial Controller (GC), Mr Robert Fraser (Director of Finance) (RF) (from item 16.1 inclusive), Ms Denise Gallagher (PWC) (DG), Ms Deborah Maddern (Clerk) (DM), Mr David Newall (Secretary of Court) (DN), Mr David O’Donnell (PWC) (up to item 16.1 inclusive), Ms Lindsey Paterson (PWC) (LP), Mr Stephen Reid (Ernst & Young) (SR), Dr Dorothy Welch (Deputy Secretary) (DAW)

Apologies: Ms Lindsay Campbell (LC), Professor Anton Muscatelli (Principal) (AM)

AUDIT/2016/12 Announcements

Dr Duncan Ross, Senior Senate Assessor on Court, was welcomed as a member of the meeting. It was agreed that Court would be asked formally to agree his appointment as a member, in light of him also being on the Finance Committee. The Committee’s remit referred to this situation not normally being permitted without Court’s approval.

David O’Donnell, PWC, was welcomed to the meeting.

There were no declarations of any conflicts of interest.

AUDIT/2016/13 Minutes of the meeting held on 21 September 2016

The minutes were approved subject to a correction to John Boyd’s job title to Senior Manager at Ernst & Young.

AUDIT/2016/14. Matters Arising

.1 HE Governance The Higher Education Governance (Scotland) Act 2016 had been published, but the commencement date had not been announced. This was expected in early 2017, with a transition period of 4 years for compliance. The composition of the University Court would need to change in some respects, to include Trade Union representatives as well as elected staff members. A joint Court/Senate group was being convened by DAW to look at this, and the process would involve consultation with the trade unions. The Scottish Code of Good HE Governance was undergoing a review following its publication in 2013. The Committee would be kept updated about the outcome. ACTION DN .2 Anti Bribery Policy Court had agreed with the Committee’s suggestion that the policy, including its provisions about relevant training, should apply to lay members of Court and relevant Committees, as well as to staff. DN would contact members with details. ACTION DN

2

.3 Policy on use of dowries SMG discussion on the matter had been carried forward. DN would update the Committee at the next meeting. ACTION DN .4 Cyber Security – update It was agreed that a briefing would be given at the February or May 2017 meeting, following completion of IT penetration testing in early 2017. ACTION DN .5 GSV contract The University had entered into a commercial agreement in July 2016, with Sanctuary and GSV, to re-purchase six student residences using £70m of private placement funding. The main purpose of the deal had been to refinance the original loan and interest rate swaps taken out by GSV (and ultimately charged to the University), gain title to the assets, and free up short term cash to help finance the campus redevelopment.

Details had been circulated for information and were noted.

AUDIT/2016/13. Review of Committee Remit

A draft revised remit had been circulated. David Watt was thanked for his drafting work.

It was agreed that the draft would be amended to include ‘Risk’ in the Committee’s title; to make references to the chair and to lay members consistent; to refer to the Finance Committee’s role in considering the annual financial statements and making recommendations thereon to Court; to refer to the Committee receiving an annual report on any cases of research misconduct; and to refer to the Committee receiving details of any investigations under the University’s Whistleblowing policy.

Subject to these amendments, the Committee agreed that the revised draft should be submitted to Court for consideration.

ACTION DM

AUDIT/2016/16. Internal Audit Update

16.1 Internal Audit Update Report

16.1 Data Governance

The audit had focused on the MyCampus and Core systems, covering student/course records and HR related data respectively, and had assessed data governance policies, data set management, and access to, and review of, data sets. The overall report classification was High risk, with two high risk findings. The first of these related to data ownership, where there was a lack of clarity around exactly who owned some of the data on MyCampus, with data spread across multiple Schools, Colleges and administration functions, affecting data quality across the multiple processes used to collect and update data. The second related to access rights and restrictions, where reviews of access did not take place systematically according to a schedule, staff role changes did not always result in an access review, and staff leaving the University did not have access revoked as standard. There were also five medium risk findings including one relating to the lack of a Data Governance Policy being shared with staff to help them understand their role in maintaining data quality. The auditors had noted however that such a policy was in the final stages of approval, and would be rolled out to all University staff as soon as it was formalised. A Data Governance Group had been up in 2015 to provide a unified approach to data governance standards across the University and all its systems, and had developed this policy.

3

The Committee had noted from the report that the General Data Protection Regulation (GDPR), which required compliance from all organisations holding data on any EU-based data subjects by May 2018, would bring an even greater focus on how data was stored and used within the University. The Committee noted that in the opinion of the auditors, data held at University level should not present a problem in this regard, but that locally held data might present challenges.

It was agreed that given the very high importance of compliance in this area, the matter would be revisited in the future, although the Committee noted that the 2016/17 annual audit plan already included some coverage. It was agreed that the Terms of Reference for this audit would be circulated to the Committee.

ACTION PWC

16.2 MyCampus Enrolment

The purpose of the review had been to review the processes and key controls in relation to the enrolment process, in particular the raising, resolving and analysis of issues raised by staff and students, thorough mechanisms such as the 2015/16 ‘Welcome Survey’ of students, which had included questions about arrival and first steps; through Supportworks calls taken in the registration period; and through feedback from staff in Colleges and Student Services. Where possible, root causes of these issues had been identified, and improvements suggested.

The overall classification was medium, and five medium risk findings had been made, covering areas including: MyCampus training, where many staff did not feel that enrolment-specific MyCampus training was offered frequently enough to ensure all staff were adequately trained on procedures required to set up enrolment, and responsibility for the delivery of this training was unclear; ownership of enrolment information, where although College staff were responsible for updating enrolment data in MyCampus, there was currently a lack of clarity over who held ultimate responsibility for the accuracy of such data within MyCampus; and enrolment matters relating to student feedback, where a number of issues encountered in 2016/17 had been identified, including timetable clashes and selecting classes with pre-requisite requirements.

The Committee noted that while classification of data obtained from the enrolment surveys had not been at a level detailed enough to include protected characteristics such as disability, there had been no indication from student support teams that there were areas of concern about protected groups having particular problems with the enrolment processes.

The Committee noted that an action plan would be overseen by the Registration and Enrolment Operations Group to ensure agreed actions were implemented in time for enrolment for 2017/18 session.

16.3 Risk Management Arrangements – Colleges

The review had considered both the design and operating effectiveness of the Risk Management Policy and its implementation across the University. The overall classification was medium risk, with good practice identified, including the policy being clear on risks needing to be linked to University strategy and on roles and responsibilities needing to be clearly defined. There were also areas for improvement identified, including the Risk Management policy not referencing risk appetite, and not being consistently applied across each of the Colleges, for example progress against mitigating actions not being consistently documented in each of the Colleges, and a risk management policy not being embedded into all Schools and Institutions.

4

The Committee noted that the report mirrored the Committee’s own conclusions about risk management being well embedded at University level, with further work required at College level. It would continue to keep the matter under review, and noted that some members of the Committee and from Court would be attending the annual SMG risk workshop in the spring of 2017.

16.4 Corporate Governance – Remuneration Committee

The purpose of the review has been to assess the design and operating effectiveness of key controls relating to the Remuneration Committee in the period 1st August 2015 to 31st July 2016. The scope of the review had included focus on membership, method of operation and reporting of the Committee. The overall classification was low, with a number of areas of good practice noted and no issues identified.

16.2 Internal Audit 2015/16 Annual Report

The Financial Memorandum between the Scottish Funding Council and Higher Education Institutions required the Internal Auditors to provide a written report and annual internal audit opinion to the institution’s Audit Committee. The report presented the view on the adequacy and effectiveness of governance, risk management and control; and on economy, efficiency and effectiveness (value for money) arrangements.

The report indicated that of the 17 completed reviews undertaken in 2015/16, no reviews had resulted in an overall report classification of Critical; five reviews had resulted in an overall report classification of High; eight reviews had resulted in an overall report classification of Medium; and four reviews had resulted in an overall report classification of Low. The work had identified seven high, 40 medium and 24 low risk findings. The auditors had not identified any weaknesses in the University’s system of governance, risk management and control that the auditors considered should be reported in the University’s annual Corporate Governance Statement.

For 2015/16, in the opinion of the auditors, governance, risk management and control, and value for money arrangements in relation to business critical areas, were generally satisfactory. However, there were some areas of weakness or non-compliance with processes in the framework of governance, risk management and control and value for money arrangements which potentially put the achievement of objectives at risk. These areas included: a lack of formal strategy and process for awarding dowries; a lack of ownership of data within MyCampus and a lack of formal guidelines around the frequency of review of access rights for the system; and a lack of a formal communications plan relating to emergency planning. Improvements were required in these areas to enhance the adequacy and effectiveness of governance, risk management and control and value for money arrangements. The auditors noted that their opinion for the University was comparable with that pertaining to other research-led Higher Education Institutions in the UK, and that it reflected the fact that the audit programme focussed on the areas of highest risk to the University.

The key factors that had contributed to the overall opinion were that: no reports had received an overall rating of Critical, and no individual findings had been rated as Critical; the High and Medium rated findings related to distinct areas of the organisation and there was no indication that they were endemic throughout the University; 72 recommendations had been followed up, with 53 recommendations implemented and 19 ongoing, with a further 33 recommendations not yet due.

PWC were thanked for the report.

The Committee noted that value for money considerations within audit reports should be as explicitly stated as possible. The auditors should also continue to bring to the

5

attention of the chair or the Committee any work proposed to be undertaken in addition to that stated in the annual plan. ACTION PWC

It was agreed that David Newall would check if local policies took cognisance of potential conflicts of interest for auditors, in the context of them tendering for contracts for services elsewhere in the University. The Committee would be updated at its next meeting. ACTION DN

AUDIT/2016/17. University Financial Statements

17.1 Review of University Financial Statements for the year ended 31 July 2016

The Committee received the financial statements for the year ended 31 July 2016. The Committee noted that this had been the first year that the University had been required to prepare accounts using the 2015 SORP, based on Accounting Standard FRS 102. However, as a year on year comparison was required to be shown in the accounts, the 2015 financial statements had had to be restated.

The Committee noted the main areas where the 2015 SORP had impacted on the financial statements, including:

a. Recognition of revenue for non-exchange transactions, such as donations, grants and contracts, once performance conditions were met or, if none existed, upon entitlement.

b. Revaluation of fixed assets, increasing Net Book Value by £143m.

c. Reclassification of deferred income received on disposal of the residency properties to Glasgow Student Villages Ltd (GSV) in 2002. This had been reclassified from reserves to long-term liabilities.

d. Reclassification of endowments to be shown in the asset category they belong to rather than a separate asset category on the balance sheet; and Reclassification of endowment movements from the Statement of Recognised Gains & Losses to the Income & Expenditure Account.

The auditors summarised that there had been a strong year financially, with tuition fee and research growth, and an increase in the capital balance. The main items of note in the year were as follows: i) Buyback of the Student Residencies from GSV, where in July 2016, the University had entered into an agreement with GSV to repurchase 6 student residencies at a cost of £70m, funded through a private placement. In the current year the transaction had resulted in a charge of £21.9m to the Income & Expenditure Account. This had been shown through Exceptional �items in the financial statements. ii) Operating Surplus after exceptionals and tax, where there was an eleventh consecutive operating surplus after a decade of operating deficits. The management accounts surplus for 2015-16 was £23.7m, which was £12.2m higher than the original budget. The main operational movements included staff savings of £6.3m, £2.4m increase on tuition fees and increased other income of £2.4m. There were also additional movements which brought the statutory accounting surplus to £11.5m, including a one-off R&D tax credit of £2.1m, a FRS 17 charge of £3.9m, and an increase in endowments of £6.6m. iii) Cash & cash equivalents: Cash and deposit balance as at 31 July 2016 were £194m, which was an increase of £40.2m in the year. The main movements within this figure were noted. iv) Capital expenditure, which was £75.8m, an increase of £11.2m compared to 2015. This was primarily in relation to the GSV transaction, where the University had regained title of assets worth £17.1m.

The Committee noted and welcomed the inclusion of a comparison table, which gave

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details of comparisons between the accounting policies that had required to be used in the current and previous financial years, including details of differences in the basis of preparation, income recognition, and treatment of areas such as equipment, software, maintenance and heritage assets. The Committee received and noted a review of the University as a going concern.

17.2 Reports of the External Auditors for the year ended 31 July 2016

The audit was designed to express an opinion on the 2016 financial statements and address the current statutory and regulatory requirements. The auditors had considered the Group’s (University and subsidiaries) current and emerging needs along with an assessment of risks that could materially affect the financial statements and aligned the audit procedures accordingly. The audit had been conducted in accordance with International Standards on Auditing (UK and Ireland).

The auditors reported that while there had been significant work by management in the transition to FRS 102, in order to meet the accounting and presentational requirements of the new SORP, the auditors had not encountered any difficulties in completing their work. Through the conduct of the audit, they had obtained appropriate and sufficient audit evidence to enable them to conclude satisfactorily on each of the significant accounting and audit matters identified. As part of the audit procedures, the auditors had completed a review of the underlying pension assumptions.

The auditors had documented and tested the controls to the extent necessary for them to complete the audit. In line with their audit plan, which had been summarised to the Committee at its May 2016 meeting, the auditors’ work had involved a combination of controls testing and substantive testing. A risk-based approach has been adopted to test large or unusual transactions and journal entries. As part of the audit approach, various data analysis tools had been used to support the audit evidence. Maximising the use of data analytics had allowed the audit work to test complete data populations and focus detailed audit testing on key areas of risk.

The auditors had not identified any significant deficiencies in the design or operation of an internal control that might result in a material misstatement in the financial statements. Stephen Reid of Ernst & Young had visited E&Y’s audit team in Singapore and had reviewed the work undertaken by the subsidiary engagement team to provide assurance over the quality of audit work performed in that country.

For the GSV transaction, as had been reported to the Committee in the interim audit report, the auditors had worked with management to review the contractual agreement and the accounting treatment proposed to recognise the commercial agreement with GSV. The auditors had reviewed the accounting treatment for the financing agreement and were satisfied that this had been reflected appropriately in the financial statements.

In respect of the consolidated and subsidiary entity financial statements, there were no unadjusted audit differences. In the opinion of the auditors, the draft financial statements were of a good standard and only minor disclosure and presentational adjustments were required to the financial statements.

On the basis of work performed to date, the auditors anticipated issuing unqualified audit opinions on the University’s consolidated, parent and subsidiary entity financial statements.

It was noted that in terms of the results in the financial statements, the outcome of Brexit did not affect the bottom line, although there were wider issues relating to future recruitment that could affect the UK sector as a whole.

A report containing draft representations by Management was noted.

The Committee expressed its thanks to the Finance Office team and to Ernst & Young for their work in relation to the accounts.

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AUDIT/2016/18. Accounts: Subsidiary Companies/University Trust, year ending 31 July 2016

The Committee noted the accounts for subsidiary companies and the University Trust. It was noted that following the Trust’s Finance Committee meeting on 24 September 2015, it had been agreed by the trustees that the volatile stock market was putting the assets of the Trust at too great a risk to remain in stocks and shares. The trustees had agreed that the entire investment portfolio be sold; this had occurred for a sum of £4,381,695, recognising a loss of £362,400.

With regard to activity in Singapore, NM suggested the University might consider the possibility of expanding the board to assist with local presence and performance.

AUDIT/2016/19. Audit Committee Annual report to Court

The draft report was approved subject to the inclusion of some further information about the areas of focus of the Committee on the financial statements and about the application of FRS102.

AUDIT/2016/20. USGAAP – Restated Financial Statements

In line with previous years, the Committee was not required to approve the restated financial statements prepared under US GAAP. The statements were noted, as was the fact that some adjustments might still be made to reflect any final adjustment to the main UKGAAP statements.

AUDIT/2016/21. Risk Register

The register was noted. DN and HC would discuss further the presentation of information on Risk Management to Court.

ACTION DN/HC

It was requested that changes to the register be tracked, so that they were easier to follow at the next Committee meeting.

It was confirmed that SMG continued to look at 2 risks in detail at each meeting and that the register was populated and updated accordingly.

AUDIT/2016/22. Any Other Business

It was agreed that a pre-meeting briefing on cyber security would be arranged, as had been agreed earlier in the meeting; and that a pre-meeting briefing on student matters including retention and completion be arranged, if possible for February 2017.

AUDIT/2016/23. Date of Next Meeting

Wednesday 22 February 2016 at 1pm in the Melville Room Prepared by: Deborah Maddern, Clerk to Committee, [email protected]

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Proposed remit November 2016


Audit and Risk Committee

Remit

To oversee on behalf of Court the effectiveness of the University’s arrangements for corporate governance, financial reporting, systems of internal control and risk management and the activities and processes related to these systems. This will include arrangements to ensure the University’s compliance with the requirements of the Financial Memorandum between the University and Scottish Funding Council.

Membership

The Committee will consist of seven members, including three members of Court, one of whom will be a Senate Assessor on Court, all appointed by Court for such periods as Court may determine. At least one of the members will have recent and relevant expertise in finance, accounting or audit. All members of the Committee are expected to comply with the University’s policies and codes of conduct and to declare any interests which may conflict with their responsibilities as members of the Committee.

The chair of the Committee shall be appointed by the Court.

A vice-chair may be appointed by the chair, from among the lay (non-University) members of the Committee, and for such period as the chair may specify, provided it does not exceed that lay member’s term on the Committee. The vice-chair will deputise for the chair in the chair’s absence.

Members of the Committee will not normally also be members of the Finance Committee, except with the express approval of Court.

The Committee's membership will include the skills and experience necessary to address its remit effectively. To this end, the Committee may request that the University Court appoint one or more additional co-opted members to the Committee. The chair of the Committee will participate in the selection process for a new co-opted member.

Quorum

The quorum for meetings is four. If there is an unforeseen reduction below this number, then a scheduled meeting may go ahead with ratification of any key matters to be sought following the meeting.

Attendance at meetings

The following officers may be in attendance at the meeting:

Principal; Secretary of Court; Deputy Secretary; Director of Finance; Group Financial Controller

The external auditor will attend the meeting at which the annual financial statements are discussed. The external auditor may attend other meetings as are mutually agreed between the external auditor and the chair of the Committee. The internal auditor will attend all meetings.

Frequency of meetings

The Committee shall meet at least four times a year. It will also meet privately with the internal and the external auditor (separately) at least once a year, the latter usually at the time of its consideration of the annual financial statements, to discuss their remit and any issues arising.

Authority and method working

The Committee is authorised by Court to investigate and consider any activity within its remit and terms of reference. It is authorised to seek any information it requires from any officer or employee of the University, both academic and non-academic, and all officers and employees are directed to cooperate with any request made by the Committee. All reasonable demands for resources to fulfill its remit and terms of reference, which may include the provision of externally-sourced advice, will be met by Court.

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The Committee shall from time to time undertake a review of its own performance and effectiveness as part of the overall review of the effectiveness of Court and its committees and report thereon to Court.

Terms of reference

The Committee shall:

Financial reporting

Ahead of consideration by the Finance Committee and recommendations by the Finance Committee to Court regarding approval of the annual financial statements:

Monitor the integrity of the annual financial statements of the University, reviewing significant financial reporting issues and judgments which they contain. In particular, the Committee shall review and challenge where necessary:

The consistency of, and any changes to, accounting policies on a year by year basis;

The methods used to account for significant or unusual transactions where different approaches are possible;

Whether the University has followed appropriate accounting standards and made appropriate estimates and judgments, taking into account the views of the external auditor;

The clarity of disclosure in the University’s financial statements and the context in which the statements are made; and

All narrative reports presented with the financial statements, such as the operating and financial review and the corporate governance statement (as it relates to matters within the remit of the Committee).

Internal control and risk management arrangements

Keep under review the adequacy and effectiveness of the University’s internal financial controls and internal control and risk management arrangements. In relation to the latter, the Committee shall consider:

the scope and effectiveness of the systems established by management to identify, assess, manage and monitor financial and non-financial risks - to include regular review by the Committee of the University risk register, and attendance by a member or members of the Committee at University-level risk workshops;

The internal auditor’s and, where applicable, management’s assessments and reports on the effectiveness of the systems for risk management.

The Court retains responsibility for the review of the effectiveness of these systems of control and must form its own opinion despite aspects of that review being delegated to the Committee.

Internal audit

Monitor and review the effectiveness of the University’s internal audit function in the context of the University’s overall arrangements;

Recommend to Court the appointment or removal of the internal auditors;

Consider and approve the remit of the internal audit function and ensure that adequate and appropriate resources are made available for its work and that it has appropriate access to information to enable it to perform its function effectively and in accordance with relevant professional standards. The Committee shall also ensure the function has adequate standing and is free from management and other restrictions;

Review and assess the annual internal audit plan and the annual report and conclusions and opinions arising from activities and findings;

Review reports addressed to the committee from the internal auditor;

Review and monitor management’s responsiveness to the findings and recommendations of the internal auditor, including the extent to which recommendations have been implemented.

External audit

Consider and make recommendations to Court for the appointment, re-appointment or removal of the

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University’s external auditor. The Committee shall oversee the selection process and criteria for a new auditor and if the auditor resigns, the Committee shall investigate the issues leading to this and decide on any action required;

Oversee the relationship with the external auditor, including (but not limited to):

scope of work and terms of engagement;

remuneration and its appropriateness to enable an adequate audit to be conducted;

assessing annually independence and objectivity taking into account relevant professional and regulatory requirements (including mandatory requirements in the University’s Financial Memorandum with the Scottish Funding Council);

the qualifications, expertise and resources of the auditor and the effectiveness of the audit process;

seeking to ensure coordination with the activities of the internal audit function;

Meet regularly with the external auditor, including at the planning stage before the audit and after the audit at the reporting stage;

Review and approve the annual audit plan and ensure that it is consistent with the scope of the audit engagement;

Review the findings of the audit with the external auditor, including a discussion of any major issues which arose during the audit, any audit and accounting judgments, levels of errors identified during the audit and the effectiveness of the audit.

Review any representation letters requested by the external auditor before agreement by Court;

Review the management letter and management’s response to the auditor’s findings and recommendations;

Develop, implement and monitor a policy for the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the matter.

Other matters

Consider the effectiveness of arrangements for:

the investigation of fraud or other questions of loss, financial irregularity or impropriety;

University employees to raise concerns, in confidence, about possible wrongdoing in financial reporting or the operation of internal controls. The Committee shall ensure that these arrangements allow proportionate and independent investigation of such matters and appropriate follow up action;

promoting value for money through economy, efficiency and effectiveness in the management of the University’s resources and the management and quality assurance of data;

the safeguarding of the assets of the University and of the use of its funds, particularly funds deriving from the public sector;

proper corporate governance.

Consider any matters falling within its remit arising from reports of external bodies such as the Audit Committee of the Scottish Parliament, Scottish Funding Council, Audit Scotland, National Audit Office or UK Research Councils.

Receive reports of the outcomes of any investigations under the University’s Whistleblowing procedure.

Receive an annual report on any cases of research misconduct considered under the University’s Policy and Procedures for Dealing with Allegations of Research Misconduct.

Reporting

The minutes (or a report) of meetings of the Committee shall be circulated to Court.

The Committee shall submit an annual report on its work to the Court setting out the manner in which the Committee has discharged its remit and terms of reference and including views on the adequacy and effectiveness of the University’s systems of internal control, risk management and governance. The Committee may wish to include in the report comment on the adequacy of the resources provided to it in order to carry out its work.

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Current Remit

Audit Committee Remit To oversee on behalf of Court the arrangements for external and internal audit of the University’s financial and management systems and of activities and processes related to these systems. To ensure that the Committee's membership includes the skills and experience necessary to address its remit effectively. To this end, the Committee may request that the University Court appoint one or more additional co-opted members to the Committee. The Chair of the Committee will participate in the selection process for a new co-opted member. Terms of reference The Committee will review and report to the Court on a regular basis on items and areas within its remit, including the following: • the adequacy and effectiveness of the financial and management systems of the University; • the scope and effectiveness of the internal audit service, including the planning and operation of its work, particularly the annual audit plan of work, the annual report on its activities and findings and regular reports on its activities including the extent to which audit recommendations have been implemented; • the annual financial statements and accounts before their submission to the Court; • the external auditor’s report and its findings; • the nature and extent of risk to the University’s objectives and activities and the effectiveness of the management controls in place for avoiding or minimising such risks; • the effectiveness of arrangements for: (i) the investigation of fraud or other questions of financial irregularity or impropriety; (ii) economy, efficiency and effectiveness and the achievement of value for money in the management of the University’s resources; (iii) the safeguarding of the assets of the University and of the use of its funds, particularly funds deriving from the public sector; (iv) proper corporate governance. • the criteria for the provision of internal audit for the University, and the remuneration of the internal auditor; • the appointment, remuneration and scope of the work of the external auditor; • matters resulting in the resignation or dismissal of either the external auditor or the internal auditor; • co-ordination of the activities of the external and internal auditors; • other matters such as the provision of non-audit services or specialised internal audit services by the internal auditor or the external auditor and any relevant findings or recommendations arising from reports of outside bodies such as the Scottish Funding Council, Audit Scotland and the Audit Committee of the Scottish Parliament and the UK Research Councils. Membership: 7 members, including 3 members of Court, one of whom will be a Senate Assessor on Court. In attendance: Principal, Secretary of Court, Deputy Secretary, Director of Finance, Groups Financial Controller, Internal and External auditors

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Audit Committee Annual Report to Court

December 2016

1. Introduction

In line with good governance practice, the Audit Committee submits an annual report to Court, giving an overview of the Committee's work during the year. The report reflects the Committee's assessment of the adequacy and effectiveness of the internal control system and the extent to which the governing body can rely on that system. The report below summarises the work of the Committee for the year up to and including its meeting on 8 November 2016.

2 Summary of the Year's Work

2.1 Membership of the Committee

Membership of the Committee for the year was: Simon Bishop, Dr Paul Brady (chair, up to the September 2016 meeting, at which he demitted office), Lindsay Campbell, Heather Cousins (chair, from November 2016 meeting), Neil Menzies, Dr Duncan Ross (from November 2016 meeting), Lesley Sutherland and David Watt.

All the above are external/lay members, with the exception of Dr Duncan Ross, Senate Assessor on Court. Two of the external/lay members are also on Court. The addition of the Senate Assessor was agreed by Court at its October 2016 meeting.

As indicated above, Dr Paul Brady recently demitted office from the Committee. At the September meeting, he was thanked for his service to the Committee over the preceding 8 years.

2.2 Remit of the Committee

The Committee undertakes an annual self‐assessment, and reviews its remit. At its November meeting, the Committee agreed to submit a revised remit to Court for approval. The remit has been drafted in line with best practice across the UK. The remit was also amended by agreement of the October meeting of Court, to include reference to the involvement of the Committee chair in any co‐opted appointments, and to the appointment of a Vice‐Chair of the Committee.

2.3 External Audit

Ernst & Young continued in their role as external auditors, having been reappointed for three years from 1 February 2015.

2.4 Financial Accounts 2015/16

The Committee has reviewed the University's financial statements for 2015/16 and the commentary on these, together with the audit results report prepared by the external auditors, Ernst & Young (E&Y).

Prior to this review, in May, the Committee received a report setting out the External Audit scope and approach for the year to 31 July 2016, summarising E&Y’s assessment of the key issues which would drive the development of an effective audit for the University, taking consideration of relevant market factors and the operational, finance, and business risks which drove the University’s financial statements. The report also discussed levels of materiality that would be applied, at a consolidated level, such assessment being based on total group income. A separate materiality level would be used for the subsidiary entities and the Trust, reflecting the scale of their operations.

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In addition, in September, the Audit Committee received an update on the progress of the 2015/16 audit, in particular the FRS102 conversion process. The report summarised the findings of the external auditors’ evaluation of management’s transitional arrangements to prepare financial statements in accordance with the new FRS102‐based Higher Education SORP. The Committee has heard that the changes to the Financial Statements, required by the SORP, will result in greater volatility in the statements, as well as increased and very clear narrative being needed to communicate the details to a ‘lay’ readership.

As part of its review of the financial statements in November, the Committee also received a detailed report on comparisons and changes between the approach in 2014/15 and 2015/16, arising from the SORP. In addition, it reviewed details of the University’s position provided in order for the Court to be satisfied that the institution can continue as a going concern, i.e. that it has a reasonable expectation that the University and the group have adequate resources to continue in operational existence for a period of 12 months from the approval of the financial statements.

As part of its review of the financial statements, the Committee reviewed the major reporting issues and judgments relating to the 2015/16 financial year, including: changes to accounting policies (including changes arising from the adoption of FRS102 / SORP 2015 for the first time); the methods used to account for significant or unusual transactions; the University’s adherence to appropriate accounting standards and the appropriateness of its estimates and judgments, taking into account the views of the external auditors; the clarity of disclosure in the University’s financial statements and the context in which the statements were made; and all narrative reports presented with the financial statements, such as the operating and financial review and the corporate governance statement.

During the review of the financial statements, the Committee also noted the management judgments made in relation to significant risks, the audit work undertaken, and the approach to controls testing in the 2016 audits.

The Committee was content that preparation of the financial statements in accordance with the new FRS102 was satisfactory.

The Committee noted the satisfactory audit conclusions of Ernst & Young. The audit opinion was unqualified and, for the eleventh successive year, the accounts reflect an operating surplus. The Committee has also reviewed the accounts for the University’s ‘subsidiaries’ including UGlasgow Singapore Pte Ltd (related to the University’s activities with Singapore Institute of Technology) and the University Trust. It has also seen the restated accounts under the US GAAP, arising from the significant student loan funding provided by the US Department of Education, for US students studying at Glasgow.

2.5 Internal Audit Activity 2015/16

The Committee has considered the work of Internal Audit, a service provided by PricewaterhouseCoopers (PWC). During the year, the Committee has:

● reviewed and approved the annual strategic audit plan with PWC; reviewed the outcome of each new internal audit report, assessing the main areas requiring attention, the management responses, and the actions taken, challenging these responses and actions where it considered this was required, to ensure appropriate action was taken in light of recommendations; required the Director of Finance/Group Financial Controller and the Secretary of Court/Deputy Secretary to report regularly on progress in implementing internal audit recommendations;

● convened special meetings or briefings to look in more depth at a number of areas, including:

i) the University’s approach to risk management, which is referred to later in this report;

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ii) activity and developments in the College of MVLS; iii) the Campus Estates strategy/capital plan, including risk and governance arrangements; iv) Cyber Security, where the Committee heard that the IT environment is increasingly complex, with data in multiple locations, widespread use of mobile devices and large numbers of people, both internal and external to the University, using systems. As such it is important for the University to focus on key areas of potential vulnerability, such as IP, personal information and key corporate information, and for any responses to potential attacks to be measured. The Committee will receive regular updates in this area, and the 2016/17 internal audit plan will include a review of the controls and processes in place with regards to Cyber Security and the housing of data, in light of a proposed Data Centre installation.

As advised last year, the recommendation ‘rating’ system for internal audits changed with the appointment of PWC as auditors: the ratings are ‘Critical’, ‘High’, ‘Medium’, ‘Low’ or ‘Advisory’ rather than Priority 1, 2, 3. In 2015/16 (as in 2014/15) there were with no ‘critical risk’ findings (or reports), and seven ‘high risk’ findings (6 in 2014/15), with five reviews resulting in an overall report classification of ‘high’ (4 in 2014/15).

Direct comparisons with the ratings used previously are not possible. The internal auditors also advised the Committee that since the internal audit plan focuses on different areas each year, the number of findings is not strictly comparable and therefore increases or decreases are not necessarily indicative of a change in control environment.

The internal auditors have issued an annual report for 2015/16, which includes an opinion on the adequacy and effectiveness of the institution’s governance, risk management and control, and of its economy, efficiency and effectiveness (value for money) arrangements. The overall opinion is based on the results of all audits during the year, and on follow up action taken by management in respect of audits from previous periods. The opinion is that governance, risk management and control, and value for money arrangements, in relation to business critical areas are generally satisfactory; there are however some areas of weakness or non‐compliance with processes within this framework, which potentially put the achievement of objectives at risk. In the opinion of the auditors, improvements are required in relevant areas; these areas are also highlighted by the Committee in the sections below where it refers to particular areas of interest and concern.

In the opinion of the auditors, the University is comparable with other research‐led HEIs in the UK; and the auditors also note that the audit programme focuses on the areas of highest risk to the University, with the potential to result in findings of high impact and thus higher rating.

The key factors that contributed to the internal auditors’ overall opinion are: that no reports received an overall rating of Critical, and no individual findings were rated as Critical; that the High and Medium‐rated findings related to distinct areas of the organisation, and there was no indication that they are endemic throughout the University; that 72 recommendations were followed up, with 53 recommendations implemented, 19 ongoing and 33 not yet due.

In the Committee’s view, the University management is generally following up audit recommendations appropriately, or providing reasons for any delays or recommendations not implemented. The attendance of senior management representatives at meetings continues to provide assurance to the Committee of appropriate engagement with the audit process.

Particular areas of interest and concern for the Committee, arising from specific audit reviews, or from wider aspects of the University’s operation, are as follows. These areas include a number of matters which informed the internal auditors’ overall opinion, as outlined above.

A Research Grant Review, where a review was undertaken of arrangements for payment of a sub‐contractor engaged under a research contract. The report was given a High overall risk classification and a number of findings were identified where processes could be

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improved, including no contract having been in place with the sub‐contractor. A review of Emergency Planning and Business Continuity Management, and IT disaster recovery, where the report gave overall risk classifications of High to both the Emergency Planning and Business Continuity Management aspects of the review, and a Medium overall risk classification to the IT disaster recovery aspect. The report concluded that the business continuity arrangements within the University were not of the level of maturity expected for an organisation of its profile, size and nature. The Committee noted that arrangements were already in place to support emergency planning within the institution, but there were areas requiring improvement, including documentation being in place to support actions in response to emergencies. The management response committed the University to establishing effective governance arrangements; and to put in place resource to assist Schools and Institutes in establishing robust Business Continuity Plans and to assist services in improving the quality of their plans. An audit of the use of ‘dowries’, where, in order to attract top research talent within each field of study, the University uses ‘dowries’ as a recruitment tool for professorial and research staff. The report classification was High risk, with one high risk finding, which identified that controls could be improved, given the absence of formal documentation of strategy and related policies and procedures, and to awards being made without formal upfront consideration or reporting of the potential value against total investment. The report also found that the form of dowry agreements was not consistent across the Colleges and that there was a lack of visibility at SMG level as to total dowry spend. The Committee noted that the SMG was reviewing the area and that policies would be developed. A review of Data Governance, the scope of which focussed on the MyCampus and Core systems, covering HR related data and student/course records respectively. Findings were that standards for data governance varied significantly across the University, the lack of a formal Data Governance Policy being one of the root causes for this, since the lack of University guidance led to different interpretations of how to maintain data quality. The overall classification was High risk and there were 2 high risk findings, relating to: a lack of clarity around ownership of some of the data on MyCampus; and access rights and restrictions, where reviews of access to MyCampus were generally on an ad‐hoc basis rather than under a regular schedule. The Anti‐Bribery and Corruption Policy, which the Committee invited Court to consider, in terms of the policy applying to external members of Court and relevant Committees. Court has agreed that this should be the case. The impact of the HE Governance (Scotland) Bill. Progress on drafting and implementation of the legislation has been summarised for the Committee at several meetings.

2.6 Risk Management

The Committee’s role includes an interest in the University’s approach to risk management. The Committee remains satisfied that risk management is still well embedded in the regular agenda of the SMG, with key business risks identified, risk owners appointed from among SMG members, and risk mitigation strategies clearly defined.

In February 2016, the Committee received a briefing from Senior Management, outlining the approach to the assessment, prioritisation, and ownership of risk at University level. Following this, a paper was drafted for Court with some recommendations about how Court might wish to be involved in the area of risk management, as matter of good governance in light of Court ultimately being responsible for Risk Management within the University. Court was asked to consider modifications to the current approach, and agreed:

i) that Court should, through the Audit Committee, receive the University’s strategic risk register

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together with the mitigating actions proposed by SMG. This will occur annually at the October meeting of Court;

ii) that Court members should be advised of the next annual SMG strategic risk workshop, with a view to a small number of Court members contributing to that exercise. Some members of the Audit Committee will also attend this workshop annually.

Subject to these two changes, the University’s approach to risk management will continue as currently, with Audit Committee continuing to provide oversight of risk management on Court’s behalf, including the arrangements relating to the Colleges.

In the past, the Committee has had some concerns about the risk registers relating to the Colleges, which it considered required more work to embed the risk culture. The Committee will maintain an interest in this area.

3 The Committee's plans for 2016/17

In 2016/17, the Committee’s focus will include consideration of: i) audits about aspects of risk management and corporate governance, to include a review of the fraud risk assessment processes in place at a University and College level; ii) value for money audits including project management, to include a review of the workload modelling project and review of the award and allocation processes in relation to all financial aid available to students, with a focus on widening access; iii) general assurance audits relating to financial controls, including a review of the cost monitoring and re‐forecasting of the Campus redevelopment programme; iv) risk‐based internal control reviews, including a review of the planning and performance cycle to ensure consistency across the University and alignment to key strategic objectives; and a review of the controls and processes in place with regards to Alumni relations and fundraising, reflecting changes to regulations in the area; and v) computer‐related audits, including a review of the IT Strategy, with a particular focus on how it will underpin the Campus redevelopment. A full list of planned audits is at Appendix 1.

The Committee will continue to maintain active scrutiny of the Colleges progressing to a more developed approach to risk management; the Estates Strategy, in particular its governance and risk management elements; and progress relating to the areas of concern outlined above.

4 Adequacy and Effectiveness of Internal Control

On the basis of the internal audit work undertaken in the course of the year, and of the comments of the external auditors on the University's financial statements, the Audit Committee believes that the University generally has an adequate framework of internal control.

HC/DM 14.11.16

Speaker Ronnie Mercer Urgency The paper ‐ low; items referred to in paper ‐ variousSpeaker role Chair of Estates Committee Timing VariousPaper Description Estates Committee report to Court Red‐Amber‐Green Rating All ‐ details in minutesTopic last discussed at Court Last Estates Committee Report October 2016 Paper Type Minutes of meeting, with areas for notingTopic discussed at Committee See paper summary section Paper SummaryCommittee members present Court members Ameer Ibrahim,

Karen Lury, Ronnie Mercer (Chair), David Milloy, Margaret Morton present at last Estates Committee meeting

Minutes of meeting of Estates Committee held on 4 November 2016

For Endorsement/consideration [these items also appear elsewhere on the Court agenda]Estates Committee's approval of the revised Capital Plan involving Phase 1a, Phase 1b and Phase 2 Court is asked to endorse

Estates Committee's approval of the Learning and Teaching Hub within the identified cost envelope of £86 ‐ £97m, Noting the potential additional cost of £35m for full Mechanical and Electrical upgrade of the Boyd Orr Building and the options to deliver this as part of the Hub development or as a rolling three year programme of works (EC/2016/12.4 refers);

Court is asked to endorse

Consider an accelerated delivery programme and associated additional borrowing requirementsto deliver Phases 1a and 1b of the Plan by 2021;

Court is invited to consider

For NotingThe potential impact of noise disturbance, supply chain and University resourcing implicationsresulting from a protracted programme (EC/2016/12.1.1 refers);

For noting

Estates Committee's approval of the CapEx Application in the sum of £658,238 for fees to developoptions for a Water Source Heat Pump (EC/2016/13.2.1 refers);

For noting

Cost of proposed plan Various as described in Minutes

Major benefit of proposed plan Student experience, research impact Action from Court For endorsement/consideration/information/notingRevenue from proposed plan Recommendation to CourtDemographics Relevant Strategic Plan workstream Empowering People, Focus, Agility

% of University

Cross University application on several items Most relevant Primary KPI it will help the university to achieve

All apply, including UG satsfaction and Research impact/income

Most relevant Secondary KPI it will help the university to achieve Effective Use of EstateRisk register ‐ university level 1. Estates StrategyRisk register ‐ college levelOther universities that have done something similarOther universities that will do something similarRelevant Legislation Building and Planning legislationEquality Impact Assessment On a building by building basis/by CapExSuggested next stepsAny other observations

Campus AllExternal bodies Glasgow City CouncilConflict areas

Court Context Card ‐ Estates Committee Report 14th December 2016

of 4 "The information in this document, and accompanying papers, is confidential information of the University of Glasgow. The information must

not be released in response to any request without first seeking advice from the DP/FoI Office."

UNIVERSITY of GLASGOW Estates Committee

Minute of the meeting held in Room 306, University Library on Friday 4 November 2016 Present: Mrs A Allen, Mr A Ibrahim, Professor N Juster, Professor K Lury, Mr R Mercer (Convenor) Mr D Milloy, Ms M Morton, Mr D Newall, Mr D Smith In Attendance: Professor F Coton (Item 4.1.4), Mrs L Duncan, Mr P Haggarty, Mr R Smith, Dr D Welch (Item 4.1.4) Apologies: Mr R Fraser, Professor A Muscatelli (Principal), Mr A Seabourne, Professor P Younger EC/2016/8 Committee Convenorship The Committee welcomed Mr Ronnie Mercer as its incoming Convenor. EC/2016/9 Minute of the meeting held on 2 September 2016 The minute was approved as an accurate record. EC/2016/10 Matters Arising There were no matters arising. EC/2016/11 Declarations of Interest There were no declarations. EC/2016/12 Strategies and Performance

EC/2016/12.1 Estate Strategy EC/2016/12.1.1 Capital Plan Review Commercially Sensitive The Committee noted the phasing proposals for delivery of the Capital Plan which included a number of programme and cost assumptions: Phase 1a (£397.4m) - Learning and Teaching Hub (£87.8m); Mathematics and Statistics (£8.3m); Infrastructure (£76.3m); Joseph Black Building envelope (£23.5m); Institute of Health and Wellbeing (£35.5m); Research Hub (£94.8m); Adam Smith Business School (£33.4m) plus space to accommodate plans for PGT and PGR growth (circa £10m); College of Arts –partial (£27.8m). Phase 1b – (additional £97m) - Engineering research space (£40m); Innovation Quarter, Church Street (£5m); Chronic Diseases research and a new biological services facility (£5m); Relocate parts of Social Justice Hub to the Gilbert Scott Building (£12m); Relocate remaining MVLS activity from the Joseph Black Building (£16m); Research Hub – top floor fit-out (£7m); Gilmorehill Halls refurbishment (£8m). Phase 2 - (not yet costed) - Full solution for College of Arts and School of Engineering, Relocation of School of Education, Move of University Service from Tay House, Permanent solution for Maths & Statistics, Kevin Hall 2 (subject to funds being secured). The Committee noted that Phase 1 was deliverable by 2021 within the £450m funding envelope with £100m borrowing. Phases 1a and 1b were deliverable by 2021 for a total sum of £550m to include £200m borrowing. All proposed phasing would allow for £15m per annum for refurbishment projects in addition to the existing annual £15.7m revenue allocation. The Committee requested that it be provided with further detail to include: More detailed modelling of cash flow depicting sensitivities on income growth and inflation assumptions; streamlining of project sponsorship and governance arrangements; greater definition of campus IT and



smart campus infrastructure; appropriate challenge of anticipated efficiencies, cultural change and growth to ensure delivery; additional support to those projects which will not proceed to identify the opportunities to deliver positive outcomes utilising the £15m per annum additional refurbishment funding; development of a communication plan which ensures all stakeholders are appropriately informed. The Committee noted the review process would include final review by SMG on 15 November 2016 after which agreement to final recommendation would be sought from SMGr on 28 November 2016. Court would receive further information at its meeting on 14 December 2016. The Director of Estates would prepare a Summary paper for the Estates Strategy Working Group on 6 December 2016, outlining the information to be provided to Court on 14 December 2016. It agreed that a compelling strategic narrative should be prepared to fully explain the rationale for the decisions taken on those projects which would and would not proceed. The Committee agreed that Court would be asked, in a one page summary paper, to: Endorse Estates Committee’s approval of the revised Capital Plan, noting the suggestion that it proceed in three phases: (Phase 1a) in the sum of £397.4m, Phase 1b (£97m), and Phase 2 (cost not yet confirmed); Consider an accelerated programme and associated additional borrowing requirements with a view to delivering Phases 1a and 1b of the Plan by 2021; Note the potential impact of noise disturbance, supply chain and University resourcing implications resulting from a protracted programme of works if an accelerated programme was not supported. EC/2016/12.2 Dashboards EC/2016/12.2a Workstream 1 – Masterplanning and Infrastructure The Committee noted that planning applications had been submitted for both the Learning and Teaching Hub and for the Campus Masterplan.

EC/2016/12.2b Workstream 2 – Key Projects (Design and Construction) The Committee noted that all projects would be reappraised as part of Capital Plan review. It noted that Design Team appointments for Adam Smith Business School, College of Arts and College of Science and Engineering /Joseph Black Building were being held pending the outcome of the review.

EC/2016/12.2c Workstream 3 – Procurement and Appointment of Lead Contractor The Competitive Dialogue process would continue throughout December 2016. Invitation to Submit Final Tenders would be issued on 16 December 2016 with a tender return expected on 27 January 2017.

At is meeting in January 2017 Committee would be asked to approve delegated authority to a group tasked with appointing the preferred contractor following conclusion of the tender process.

Committee members would be invited to overview presentations to be provided by both bidders in early January 2017 and further detailed information would be provided to the Committee meeting scheduled for March 2017.

The Committee noted that a working group was being established to work through bid details and this work would include analysis and review of a gains share approach.

EC/2016/12.2d Risk Register The Committee noted the current Risk Register. An update would be presented to the meeting scheduled to take place on 13 January 2017.

EC/2016/12.3 Kelvin Hall (Phase 2)

The Committee noted that Phase 1 would be officially opened by the First Minister on 11 November 2016. It also noted that planning for the development of Phase 2 was underway. This would be a multi-partner development to include delivery of museum, gallery, tourist centre and learning space in one location, also providing the basis for innovative pedagogy. For the University, it would provide an on-street location for the Hunterian Museum and Art Gallery which provide a more flexible and accessible facility. EC/2016/12.4 Learning and Teaching Hub Business Case



The Committee noted Professor Frank Coton’s presentation outlining the context for the development in respect of space availability and suitability, increasing student numbers and associated fee income. It noted that the development would create capacity for future growth in student fee income, protect existing fee income, enhance the student experience, facilitating evolution in pedagogy and improving competitiveness in the market place, ultimately underpinning the University’s strategic ambitions. The Learning and Teaching Hub would provide 14,880sqm of new, purpose-designed accommodation, becoming a focal point for student line on Campus. It would ensure the Estate was able to support teaching space disposals as identified in the Campus Masterplan and would allow the Bute Hall to be released as a teaching venue. It would address the current shortfall in student study space and improve utilisation of the teaching estate by 10%. Under the procurement model being adopted for delivery of the project (NEC3) a final target price would be provided by the bidders, prior to final decision-making and any appointment would be made on this basis of this maximum target price. This sum would be guaranteed on the basis of an agreed design, assuming no changes to either design, specification or in market conditions. It was noted that the Governance Board was accountable for changes in design and would therefore have accountability for any associated cost variance as a result of changes to the agreed design. The Committee requested that a full, robust change-control process be established to ensure this was well controlled. The Committee noted and approved the project on the basis of the expected financial envelope, in the range of £86-£97m. It noted that this sum had been submitted by two prospective delivery partners and this had been tested by the University’s cost consultants. It noted that a final agreed target maximum price was likely to be provided in January 2017, prior to a final approval being given. The Director of Estates would update the Committee when further cost certainty was available. The Committee noted the physical links, on three levels, with the Boyd Orr building and noted that the Hub works package allowed for over-cladding of the Boyd Orr Building and for some cosmetic upgrades at the three entry points. There was however no allowance for mechanical and electrical upgrades within the Boyd Orr building. The Committee noted that the Masterplan had assumed that these infrastructure upgrades would be delivered in a three-year programme. The Committee noted concerns about this approach in respect of the highly variable physical conditions and user environment between two linked buildings, one of which would be a flagship facility, used by a large University population. The further potential cost for one-off replacement was noted in the sum of £35m. A detailed specification of the full work package would be prepared to give clarity on the value of such an investment. The Committee noted that if this package of work was approved there would be a detrimental impact on the remainder of the Capital Plan and that final revision of the Capital Plan would be delayed until this investment decision had been made. The Committee: Approved the project within the identified cost envelope of £86 - £97m, subject to a final agreed maximum target price being finalised; Requested that a full, robust change-control process be established to ensure costs were controlled and managed; Requested that a full, detailed specification be prepared giving clarity on the additional £35m mechanical and electrical upgrade package in the Boyd Orr building. A statement on the opportunity value of delivering this in a one-off programme versus a three year package would also be prepared; requested that the Director of Estates provide an update briefing to the Committee when further cost certainty was available; Agreed that a series of visual display would be provided at the Court meeting on 14 December 2016; and Agreed that Court would be asked to endorse Estates Committee’s decision to approve the project. It noted that Court would be provided with an Executive Summary and a one-page recommendation paper giving clear, unambiguous information to include: the main Learning and Teaching Hub project cost envelope; information explaining the NEC3 procurement model and the maximum guaranteed maximum target price methodology. It would also be provided within information on the basis upon which a final decision on the guaranteed price would be approved; the rationale and control measures for any potential cost movement beyond the guaranteed maximum target price; confirmation that the



Hub project cost allows for over-cladding the Boyd Orr Building; and information on the additional £35m cost element associated with the proposed one-off mechanical and electrical upgrade package within the Boyd Orr building and the consequent impact on the balance of the Capital Plan.

EC/2016/12.5 Sustainability Strategy

The Committee noted that Court had approved the establishment of a Governance Board and a Delivery Board. It also noted that an annual progress report would be provided to Estates Committee.

EC/2016/13 Projects

EC/2016/13.1 Approved Projects Status (RAG) Report The Committee noted the current status of all current projects. It welcomed the dashboard format and agreed that whilst this provided a useful overview, it requested that some commentary was also provided in future reports to detail those projects with any significant movements from the expected position. EC/2016/13.2 CapEx Applications EC/2016/13.2.1 – Water Source Heat Pump – Fees The Committee noted and approved the application in the sum of £658,238 for design fees, site investigations and other costs associated with the development of a potential Water Source Heat Pump.

EC/2016/14 Any Other Business EC/2016/14.1 Thanks and Farewell The Committee thanks Ms Margaret Morton for her work on behalf of the Committee during her Convenorship and wished her will in her Executive role with the College of Medical, Veterinary and Life Sciences.

EC/2016/15 Schedule of Meetings for 2016/17 Friday 13 January 2017 Friday 10 March 2017 Friday 12 May 2017

Speaker Ms June Milligan Urgency For information Speaker role HR Committee Chair Timing ImmediatePaper Description HR Commtitee report to

Court (Minutes of meeting held on 14 November 2016) and HR Data Analytics Red‐Amber‐Green Rating Green

Topic last discussed at Court Last HRC Report Oct 2016 Paper Type Information and Discussion Topic discussed at Committee See paper summary section Paper SummaryCommittee members present Court members present

at last meeting: June Milligan, Lindsay Farmer, Nick Hill, Morag Macdonald Simpson

Summary of meeting held on 14 November 2016: The HR Committee discussed the draft plan to address the Gender Pay Gap. This highlighted the importance of increasing the number of female applicants, addressing specifically the pay zone where the gap emerges, and exploring ways to address occupational segregation across the University. The committee also received an update on the Attraction and Recruitment of Talent and the proposal for an end‐to‐end process review : the level of recruitment activity remains high and attracting, retaining and developing talent is critical to achieving the University Strategy. The Committee considered topical issues arising from the last Court meeting. A report for the Committee showed that the Staff Survey, revealed staff with a disability as less engaged and more dissatisfied, identifying some possible reasons for this and proposing action. The HR Director's report, the Annual report from the Joint Committee of Consultation and Negotiation and the annual report of HR Analytics are attached to the HR Committee minutes. The latternow includes additional information in relation to non‐UK EU Nationals employed by the University.

Cost of proposed plan Topics to be discussed HR Data AnalyticsMajor benefit of proposed plan Action from Court For information/discussion if desiredRevenue from proposed plan Recommendation to Court To note inclusion of Brexit‐related data sets Demographics Relevant Strategic Plan workstream Agility, Focus, Empowering People% of University 100% All Staff Most relevant Primary KPI it will help the university to achieve Staff Engagement

Most relevant Secondary KPI it will help the university to achieve Gender Equality

Risk register ‐ university level

2 Immigration policy/EU staff & students; 6 Organisational culture; 7 Staff development; 12 Brexit (staff recruitment)

Risk register ‐ college level NA


Relevant Legislation

Potential Brexit‐related restrictions on free movement of people; Employment legislation (employee relations / equal pay)

Equality Impact Assessment

Gender pay equality under discussion/Staff Survey discussion covering all E&D categories and Disability in particular

Suggested next steps NA

Any other observationsCampus All locationsExternal bodiesConflict areas None Highlighted

Court Context Card ‐ HR Committee Report 14th December 2016

HR Committee Draft Minutes

Page 1

UNIVERSITY OF GLASGOW Human Resources Committee

Minute of meeting held in the Melville Room, Main Building

on Monday 14 November 2016

Present: Ms J Milligan (JM), Mr D Newall (DN), Ms S Ashworth (SA), Mrs C Barr (CB), Professor E Cameron (EC), Mr R Claughton (RPC), Professor L Farmer (LF), Professor N Hill (NH), Dr M Macdonald Simpson (MMS), Professor R O Maolalaigh (ROM), Mr R Goward (RG)

By Invitation: Prof A Anderson (AAn), Ms T Stirling (TS), Ms M Taylor (MT) Apologies: Professor A Muscatelli (AM), Mrs A Allen (AA), Ms Susan Campbell (SC) HR/16/48 Opening Remarks & Apologies JM welcomed the committee and introduced herself as the new chair to the Committee. JM

noted that her passion was for people and that her commitment was to facilitate the Committee contributing fully to the achievement of the University Strategy ‘Inspiring People’. Agendas would invite strategic and topical discussion as well as appropriate governance oversight of the work of the HR department. JM encouraged rigorous, rich and relevant discussion.

Apologies were noted as above.

HR/16/49 Minute of the Meeting held on 13 September 2016 The minute of the previous meeting was agreed and RPC confirmed that a change proposed

by NH would be included.

HR/16/50 Gender Pay Gap – Action Plan CB introduced the topic, explaining that there was a significant amount of work to be done to

reduce the gender pay gap. This would include wider culture and behavioural change around recruitment and progression as well as specific targeted action. LC spoke to the paper, noting two issues in particular.

The first of these is the need to focus action on addressing occupational segregation, this being a major influence on the gender pay gap, and most evident at operational level in university services. The HR Director reported discussions of possible action with the relevant SMG member. The second issue relates to the need to address a gender pay gap which emerges at a particular pay band/zone. LC noted some options to be considered, including positive action at the recruitment stage in order to increase the number of female applicants applying for senior roles in particular. The group discussed different approaches, including more direct incentivising for female applicants, and it was agreed that the focus should be primarily on increasing the actual numbers of female applicants. It was noted that the data shows that males and females fair equally through the selection processes, but it is the lower number of female applicants which are leading to less appointments in more senior roles. EC also noted that it was important that the University monitor the impact of more targeted

recruitment of “stars”. More might also be done to support female applicants with promotion and re-zoning applications.

LF asked whether a one-off ‘equalisation’ exercise to level salaries had been considered. LC

noted that modelling showed that this would actually only reduce the gender pay gap by around 1% as the issue relates primarily to gender distribution across the grades and zones rather than equality of pay within them. There was however support for exploring further whether some limited rebalancing might be needed, though it was recognised that this would not be a straight forward exercise.


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JM welcomed the draft plan which would now be further refined, with the narrative strengthened and made more compelling to support senior leaders in pursuing the necessary change. AAn offered to take the paper (following further drafting) for Gender Equality Group input prior to returning to the HR Committee for final approval.

HR/16/51 Strategic Update/Key Risks - Global Recruitment & Talent Attraction

TS provided an update on the work to enhance global recruitment and talent attraction,

including using professional networks and our existing ‘professorial stars’ to identify and source new talent, using social media and improving our market offering. Alternative recruitment and selection techniques are also being used, including psychometric testing. Brexit was recognised as a significant risk to both attraction and retention, as was the already shifting landscape around immigration legislation. An end to end process review was underway to improve the efficiency of the recruitment process, and to address inconsistency of approach within colleges/units at the vacancy approval stages. TS noted that each College is represented on the review and that it is hoped that the overall process may be shortened by several weeks. Members of the Committee noted the very high volumes of recruitment and the strategic importance of this activity.

HR/16/52 Equality & Diversity – Addressing issues arising from Staff Survey MT spoke to the breakdowns of the Staff Survey results based on protected characteristics, and also general staff awareness of Equality and Diversity policies. MT noted that the paper also highlighted some increases in dissatisfaction, notably amongst disabled staff. It was recognised that accessibility and access to appropriate adjustments were recurring issues for disabled staff.. Disproportionate dissatisfaction amongst disabled staff had also been evident in the 2014 results. Focus groups at that time did identify a number of key issues to be acted upon, though not all had been progressed. It was suggested that, since the overall number of disabled staff was not high, some issues might be best addressed locally if tailored support/guidance for managers could be put in place.. Benchmarking and informing practice with other Russell Group universities might also help to encourage ongoing improvement in this area. MT also highlighted positive aspects including the successful increase in awareness of the Dignity At Work and Study policy following the delivery of the Full Stop campaign. Nonetheless there was a rise in those experiencing harassment and/or discrimination (up from 10 to 12%). The success of the Full Stop campaign may itself have contributed to the reporting through encouraging visibility and awareness of inappropriate behaviour. Although these results favourably compare with our Russell Group peers, JM stated that the levels of harassment were notably higher than those in her experience within the public sector. The Committee agreed the reported level unacceptably high and suggested further insight be obtained (e.g. from focus groups) to understand better what behaviours colleagues are reporting as harassment. It was noted that a further Full-Stop campaign might focus on particular aspects or areas and be supported by increased management training and associated tool kits.

HR/16/53 HR Topical Issues for Discussion JM had requested that the Committee have regular opportunity for early consideration of topical issues that had the potential to impact on the University strategy or risk profile, with the view to guiding HR colleagues in terms of a prioritised response. The following topics, arising from the discussions at October Court and suggested by Committee members, were briefly discussed. Brexit There were few certainties regarding the potential impact of Brexit. HR and University management are proactively engaging with EU staff and a survey of EU staff had been


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initiated to gauge the level of understanding of their situation with regards to factors such as citizenship. The Committee placed importance on continued monitoring of the potential impact on talent attraction and retention, and also maintaining levels of influence via representational links and activities. . Safe Spaces A recent UUK report into sexual violence against women, whilst predominantly focused on students, raised issues of relevance to our staff and to HR policies, and the wider distribution of the UUK material was suggested and agreed. The links to the work of Equality and Diversity unit and the Full-Stop campaign were highlighted as relevant with the Committee endorsing the importance of the University actively engaging in responding to the recommendations of the report and considering the risks associated with the work of the University including “power” relationships between academics and students. Mental Health Mental Health is the most significant cause of staff absence and it was felt that more could be done to educate managers and staff and to ensure appropriate support mechanisms were in place to support our people experiencing mental health issues. MMS had raised concerns, arising from reports to October Court of pressures on university counselling support, and was keen to understand better why the levels were increasing so rapidly. It was recognised that staff play a key role in identifying potential mental health issues and guiding students to appropriate support mechanisms. It was also noted that the counselling service for staff was relatively under used and more could potentially be done to promote the support available to staff.

HR/16/54 HR Directors’ Report The full report of the HR Director, which informs and prompts the oversight role of the Committee, is appended to these minutes. There was discussion regarding the pay uplift and ongoing dispute. The base pay uplift of 1.1% had now been paid to staff. CB noted that a higher budgetary figure of 2% incorporated incremental progression and reward & recognition. The Committee acknowledged that this level of annual uplift did not deliver significant scope to address matters of pay equalization discussed under item 3.

HR/16/55 HR Analytics – Annual Report for Court RPC spoke briefly to the report. He explained that the noticeable increase in headcount

(although not reflected in fte) is due to the annual recruitment of GTAs and Demonstrators. RPC also observed a large increase in EU staff at this level highlighting the translation of a diverse post graduate student population, which represents the start of the talent pipeline, into staff figures. This is an impotent aspect of the risk associated with Brexit.

HR/16/56 Minute and Annual Report of JCCN and Minute of EDSC The report is primarily shared with Court for information to ensure visibility of its activities.

Although there have been requests that a lay member of court chair the JCCN this was not considered appropriate. Members of the Committee were content that topics could be escalated to Court via the HR Committee

. HR/16/57 Matters Arising from 13 September 2016 The Committee noted that there were no outstanding actions which were not covered in the

HR Director’s Report or other agenda items. HR/16/58 AOB There was no other business raised. HR/16/59 Date of Next Meeting The next meeting will take place on Tuesday 17 January 2017 at 10am in the Melville Room.

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HR Director Report

HR Committee Meeting – 14 November 2016

1. Introduction

Some elements of the report will have been superseded by events prior to the meeting of the HR Committee. 2. People Strategy Implementation We are proceeding apace with the implementation of our People Strategy with a number of our key strategic objectives: Gender Pay Gap; Global Recruitment & Talent Attraction & Equality & Diversity Actions arising from the 2016 Staff Survey (part of our Leading Transformation work stream), and developments with regards to these provide the focus of discussion at our forthcoming meeting. 3. Pay Award 2015-16 The University implemented the nationally negotiated pay award in September as previously reported to HR Committee, despite all of the recognised trade unions having rejected the offer. This provided an uplift of 1.1% on all pay points from 1 August 2016 with higher uplifts to the bottom of the pay spine and the deletion of scale point 1. GMB, UNISON and Unite have not as yet formally acquiesced to the outcome of the 2016-17 negotiating round. Both UNISON and Unite balloted their members for industrial action - UNISON received narrow support for industrial action, and subsequently decided not to call on its members to take strike action. Unite did not secure a mandate for strike action and has since ended its dispute. The remaining trade unions, UCU and the EIS remain in dispute with university employers. UCU is currently undertaking a consultative process with its members on escalating its industrial action in support of a higher pay offer or on concluding the round. The EIS activated its mandate to support action short of a strike (ASOS) following the outcome of their ballot for industrial action. This action, effective from 13 October 2016, has had no impact to date at a local level as we have relatively few members. The Committee will be kept appraised of any further developments in due course. 4. Living Wage & Reducing Casualisation As a fully accredited Living Wage Employer committed to the Scottish Business Pledge, we are in the process of implementing the ‘new’ Living Wage rate of £8.45 announced on 1 November 2016. This represents an increase of just over 2.4% on the previous rate. This uplift effectively removes scale points 2 and 3 (in addition SCP1 as reported above) from our substantive pay scale and takes us closer towards the government’s stated desire of a national living wage rate of over £9.00 (60% of median earnings) by 2020. This trend will continue to benefit some of our lower paid staff in Campus Services i.e. Cleaning, Residential, Hospitality and others employed in student related services such as student ambassadors, invigilators, etc. These initiatives, part of the government’s Fair Employment Agenda, will continue to positively influence and support our work directed towards enhancing employee engagement, improving attendance levels, productivity and socially responsible employment practices. In addition, our efforts to further embed fair employment practices and minimise casualisation across our workforce including these groups and those engaged as graduate

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teaching assistants and demonstrators, has resulted in an approximately 54% reduction in our casual workforce as we move colleagues onto full employment contracts. 5. Preparations for REF 2020 Plans are well underway to support the strategic positioning of the institution in advance of the next REF, currently scheduled for 2020, in which, based on the Stern Report, it is anticipated that potentially all research active staff will be returned. This follows the thorough and comprehensive review of every unit of assessment, led by Professor Miles Padgett, Vice Principal - Research and his team, following the previous exercise in 2013 which produced a series of approved actions for each unit. We are currently consulting with the Campus trade unions, primarily UCU, on a full programme of interim research reviews aimed at monitoring the progress of each unit with a view to improving our research performance. This programme of work over a 12 month period will produce a series of recommendations to strengthen our overall performance in research outputs, impact & leadership. We will be supporting and complementing this work by reviewing the contractual status of those employed on the Research & Teaching (R & T) job family to ensure that staff are employed, developed and able to progress on the most relevant career track. The recent review of our academic promotions criteria, and introduction of alternative career tracks and progression routes within the academic job family, which has also seen our traditional ‘University Teacher’ nomenclature being revised to ‘Lecturer’, provides an ideal platform for such a review in the provision of flexible career pathways both from an organisational and employee perspective. These have the potential to support individuals appropriately under the right conditions, with scope for members of staff to transition or be re-categorised into an alternative academic track or job family in accordance with our strategic research ambitions. A simple process is available to support such transition whilst ensuring that our overall academic standards are maintained. 6. PDR 2015-16 The annual Performance & Development Review period was extended until 31 October to maximise completion rates in a year when a multitude of changes have been introduced and applied to the operation of the scheme. At time of writing, 74% of the eligible staff population have fully completed the exercise with full management sign-off, and 89% of our staff have recorded cascaded objectives aligned with our strategic deliverables at an institutional level for the forthcoming year. This represents a drop in the overall completion rate of circa. 5% compared to this time last year. This is a terrific achievement when considered in the context of some of the challenges we have encountered in implementing Core Talent (our online PDR tool), coupled with the introduction of the front loaded cascade (or grand parenting) mechanism applied across the institution and a reduction in the number of performance assessment outcomes (to four from five). Thus enabling the removal of moderation at a senior level and the elimination of a forced norm referenced distribution. Detailed analysis and full feedback on this year’s exercise is underway and yet to be seen – early indications suggest staff remain somewhat skeptical with many remaining strongly opposed to any form of assessment outcome. Nevertheless, the concept and value of a meaningful PDR discussion and associated professional development opportunities at an individual level continue to be strongly advocated. It is not possible to comment as yet on the ‘random sampling’ that is taking place within each of the business units to assess the quality of our objective setting aligned with strategic deliverables although anecdotal evidence might suggest this is highly variable and inconsistent.

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The system challenges encountered have already been well reported and discussed. These have largely been resolved and overcome with regular communication and positive messaging in efforts to inspire greater confidence in the system. Whilst this has not been constructive or indeed ‘added value’ to the process as we had planned, it will provide for a far more stable platform for interim updates and future review discussions throughout the year. This should contribute to reducing the pervading view that PDR is perceived to be resource intensive given it has until now been concentrated within a 3-5 month period. There remains however, a lack of visible commitment from leaders across the organisation to this fundamental process, the under-pinning framework driving our high performance culture. It is clear from any reference or debate relating to this long established practice and concept that staff perceptions are less than positive and the process remains contentious. Whilst the percentage of staff assessed as exceptional may not be consistent or conducive with our performance at an institutional level, the overall trend in comparison to previous years would suggest the exercise has largely been conducted within prescribed institutional guideline parameters. At this stage, 18.5% of the total staff population have been rated as exceptional this year compared to 34% and 48% in 2014 -15 and 2013 -14 respectively (in considering our previous ‘Outstanding’ & ‘Excellent’ ratings together). Results so far in terms of gender trends at grade 10 level, demonstrate females are proportionally more likely to be rated as exceptional (31% compared to 26% of males). The Board of Review is scheduled for 18 November at which further analysis at unit, job family and grade level will highlight outliers. 7. Pay for Performance

As previously reported, performance assessment outcomes will continue to provide the platform from which contribution will be recognised for Grade 10 staff, University Services and professional services staff in Colleges. The level of any monetary reward in recognition of contribution will be based on the financial sum budgeted for this purpose, taking PDR outcomes in to account. Discussions have begun at College level with regards to pay for performance considerations to inform the deliberations of the Board of Review when it meets on 18 November, and the potential distribution of any reward and recognition at a senior level to be determined by Remuneration Committee later this month. Any monetary reward in recognition of contribution will be applied within the specified envelope, and proportionally distributed based on performance at a unit level against KPIs, comparative statistical benchmark data and gender pay considerations at College level. 8. Athena SWAN Bronze Award The University was successful in maintaining its Athena SWAN bronze accreditation which testifies to the excellent work being undertaken across the Campus in advancing gender equality, capitalising on opportunities for career progression, advancing gender pay parity and other associated support measures for women. We are the first Scottish university to achieve an award under the new charter mark scheme. This, coupled with Silver Award recognition for the Institute of BAHCM and the School of Physics & Astronomy along with four additional bronze awards for Engineering, IIIs, Medicine and Psychology highlights the work of the Equality & Diversity Unit under the leadership of Mhairi Taylor, Head of Equality & Diversity, with much of the credit for these achievements due to the sterling work of Katie

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Farrell, Athena SWAN Co-ordinator and those engaged in self-assessment teams at a local level. The University’s successful Full Stop campaign, focused upon raising awareness of dignity and respect across the Campus, was shortlisted for HEIST and Herald Diversity Awards and received a silver award from CIPR PRIDE. The staff survey results saw a significant increase in staff awareness of our relevant policies following the campaign and we are keen to build on the success of this campaign, through the introduction of relevant management training and associated tools prior to any second wave of the campaign. 9. Leadership Development

Significant development work has taken place and continues across both Colleges and University Services to enhance the leadership capability and development of our senior leaders and line managers. Considerable progress has been made over the course of the past three years through a series of leadership development initiatives. As previously reported, we have three substantial programmes: strategic; emerging & aspiring, with each currently supporting cohorts of 12 participants identified via a competitive process. Our leadership talent and the enhanced capability evident in those having successfully completed these courses is demonstrated in the quality of work each is now undertaking in their strategic roles. This includes their ability to effectively manage performance and challenge behaviour in enhancing the overall performance of their respective areas. The table below provides a quantitative indication of completion rates.

Programme Numbers Academic Leadership 38 Senior Research Leaders 25 University Services Leadership 12 Heads of Services & Administration 112

Arts - MVLS 20 Science & Engineering 5 Social Sciences 12 University Services 75

Total 187 It should be noted that senior HR teams in Colleges and University Services considerably enhance this work in assisting their leadership clients in their role as strategic business partners in applying their theoretical and practical learning in practice which requires significant coaching, mentoring and support on the ground.

10. Strategic Recruitment Members of HR Committee will be aware that we have recently appointed Dr David Duncan as Chief Operating Officer as successor to David Newall. Dr Duncan, currently Registrar and Secretary at the University of York, will join us in April 2017. We have also appointed five professors in a range of subject disciplines at zone 3 & 4 consistent with our ambitious plans to strengthen our 4* research outputs, impact and leadership. We have recently launched a second campaign to recruit to our Lord Kelvin Adam Smith (LKAS) Fellowship Schemes which offer substantial funding to support research fellows over the next three years. The schemes, enable the recruitment of outstanding researchers in the early stages of their career who are on a trajectory to become leaders in their chosen field.

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This has proven to be a highly effective talent pipeline for the institution which offers fellows the opportunity to establish or further develop, an independent research career. Christine Barr Director of Human Resources 7 November 2016


JCCN - 25 May 2016

Annual Review of JCCN activity

This paper provides a summary of the matters covered by the Joint Committee of Consultation and Negotiation (JCCN) during the academic session 2015/2016. The JCCN meets three times a year. Membership includes senior managers and representatives of the four recognised trades unions, namely UCU, Unison, Unite and GMB. The Committee has an independent chair, Alan MacFarlane, former lay‐member of the University Court. The agenda is jointly agreed ahead of each meeting. The minutes are presented to the HR Committee and now also shared with Court along with the draft minute of the HR Committee. At each meeting the Committee receives written reports on policy developments being discussed at the joint Policy Review Group and also any ongoing local consultations regarding organisational change. This ensures that all parties are clear on the status of these matters. No issues have been formally escalated to the JCCN under either of these topics. The JCCN held a number of discussions during the development and launch of the University Strategy, Inspiring People ‐ Changing the World and additionally the committee has discussed a range of topics including the People Strategy, the review of the University Performance Development and Review (PDR) processes and the development and launch of the Leadership Behavioural Framework. Presentations have also been given on the work of the Employee and Organisational Development Unit including the Early Career Development Programme and the implementation of the Workload model across our Academic Units. The committee has also taken an interest in the campus development plans and the potential impact on staff arising from this. The meeting due to be held on 25th May was unfortunately cancelled due to the decision of all the Union representatives to submit apologies for the meeting resulting from its coinciding with the industrial action by UCU. As well as the regular items outlined above the committee were due to hear presentations on Athena Swan and an update on the Campus Development. These items will be covered at future meetings.

Recommendation Members of Court are asked to note the report.

Prepared by Richard Claughton Deputy Director of HR on behalf of the members of the JCCN May 2016

Speaker Mr Ken Brown Urgency For information Speaker role Remuneration Committee Chair Timing ImmediatePaper Description Remuneration

Commtitee report to Court (Minutes of meeting held on 23 November 2016) Red‐Amber‐Green Rating Green

Topic last discussed at Court Last Remuneration Committee Report June 2016 Paper Type Information/Discussion Topic discussed at CommitteeSee paper summary section Paper SummaryCommittee members present Court members

present at last meeting: Ken Brown, June Milligan, Anton Muscatelli (absent for item 7), Elizabeth Passey

Minutes of the meeting of Remuneration Committee 23 November 2016 at which was dicsussed: Senior Management Remuneration; Professorial / Grade 10 Reward; internal audit report on the Committee's workings; Voluntary Severance and Salary Augmentation Approvals since the last meeting; Performance & Development Review 2016; Principal's salary; Nomination of Vice‐Chair.

Cost of proposed plan Topics to be discussedMajor benefit of proposed plan Action from Court For information/discussion if desiredRevenue from proposed plan Recommendation to CourtDemographics Relevant Strategic Plan workstream% of University Most relevant Primary KPI it will help the university to achieve

Most relevant Secondary KPI it will help the university to achieveRisk register ‐ university levelRisk register ‐ college level




Any other observationsCampusExternal bodiesConflict areas

Court Context Card ‐ Remuneration Committee Report 14th December 2016

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Remuneration Committee

Notes of the Meeting held on 23 November 2016

Present Ken Brown (convener) Dominic Cole-Morgan Rob Goward June Milligan Anton Muscatelli Elizabeth Passey Attending Christine Barr

David Newall

1. Notes of the Meeting on 23 May 2016

These were approved. 2. Senior Management Remuneration

In conducting its annual review of the salaries of members of the Senior Management Group, the Committee received and considered the following inputs :

.1 A review of the economic and political considerations currently affecting the

higher education landscape in the UK. This identified that University finances were anticipated to be under considerable pressure in the years ahead. It also noted that a 1.1% pay award had been now been awarded, UK-wide, with effect from 1 August 2016, to all those staff who were included within the scope of national HE pay bargaining.

.2 A report from the Principal on the performance of members of the Senior

Management Group in meeting team objectives and individual objectives in 2015/16. SMG had been set five team targets. Three of these, relating to business growth, cash generation, and improved leadership performance as measured by 360° feedback, had been achieved. A fourth, on research income growth, had not been met although good progress had been made. A target relating to the Student Experience, as measured by the National Student Survey, had not been met: the University’s NSS results had deteriorated from the previous year. The Committee agreed that, overall, this performance equated to a ‘Strong Contribution’ by the Management Group; i.e. the second point on the 4-point P&DR scale. The Principal was asked if there were individuals within SMG whose performance should be recognised this year as exceptional, or as inconsistent. He advised not, and emphasised the importance of all SMG members owning team objectives and contributing to their achievement. The Principal’s intention was that there would be a stronger focus on collaborative targets in future.

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.3 Benchmarking information, from the Universities & Colleges Employers

Association. This compared the salaries of the University’s SMG members with those of staff in similar roles in major UK universities. While this data contained personal information, which should not be shared more widely, the Committee agreed it was important to record in the minute some general messages emerging from it. It was clear that, generally, the University was paying its senior executives less than the average and median salaries of similar positions throughout UK higher education. 7 of the 12 SMG members for whom comparative data was available - including the Principal - were paid less than 95% of the benchmark median salary. The salary of one member of the Management Group was less than 80% of the benchmark. While recognising the constraints, political and financial, on senior executive remuneration at this time, the Committee noted also the need for the University to offer remuneration that would attract and retain talent at senior management level.

.4 Advice from the University Court, as agreed at the Court meeting on 12 October.

This advice set out Court’s requirements that the Committee undertake the review of SMG salaries in an informed and robust way. With regard to determining the appropriate level of salary reward, it required that the Committee should:

- provide tangible reward for excellent performance;

- give consideration to any cases where the salary awarded by the University was substantially out of line with that of managers in equivalent positions at comparable universities; and

- apply a general principle that percentage pay increases for senior managers should not be higher than those for the workforce as a whole.

Having considered all the information received, and the advice provided by the Court, the Committee resolved that

.1 the salaries of all SMG members should be raised by 1.1%, i.e. the same basic increase as was being received by all University staff, with effect from 1 August 2016. The Committee noted that many members of the University community would, on top of the 1.1% increase, receive additional reward, through incremental progression and/or performance-related reward.

.2 the salary of one member of SMG should, in addition, be increased by £10,000, given that this salary was very substantially below the benchmark median.

3. Professorial / Grade 10 Reward

Remuneration Committee was briefed on the Performance & Development Review outcomes for Professorial and other Grade 10 staff. While it was not a contractual entitlement, the University’s established practice was that these staff, subject to satisfactory performance, should receive the nationally-negotiated salary increase (1.1% from August 2016). In addition, their P&DR outcomes were used to inform performance-based reward. Remuneration Committee’s interest in this area was to review the approach being taken by executive managers in determining the level of performance-based reward.

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Having considered possible alternatives, Remuneration Committee supported the following approach to performance-based reward in 2016:

.1 each College / University Services should be allocated a budget (calculated as 0.5% of their total Grade 10 salary bill) to fund professorial/Grade 10 reward;

.2 all staff with P&DR assessments of ‘Exceptional contribution’ should be rewarded with a consolidated salary increase. The Committee agreed that the approach adopted (percentage or flat-rate increase) and the amounts involved should be at the discretion of each College, subject only to the constraint of their budget allocation per .1 above;

.3 a consolidated award should also be made to professorial staff who were assessed as ‘Strong Contribution’ and whose salary was currently in the Lower Quartile of the relevant Professorial Zone. Again, the Committee was content that the approach adopted and the amount involved should be determined by each College.

4. Internal Audit Report

As part of its annual programme of audits, the University’s internal auditor. PricewaterhouseCoopers, had considered the workings of the Remuneration Committee. The focus of the audit was to consider whether the Committee was addressing the requirements of effective corporate governance, with reference to the national guidance issued by the Committee of Scottish Chairs. The auditors’ conclusion was that this area of the University’s work was ‘low risk’, and they noted a number of areas of good practice. No issues of concern had been identified and the audit report contained no recommendations.

5. Voluntary Severance and Salary Augmentation Approvals

The Committee was advised that, since its last meeting on 23 May 2016, university officers had approved 11 severance packages within the standard terms of the University's VS scheme. The split by College had been: MVLS 4; Science & Engineering 4; University Services 2; Social Sciences 1. The total cost of the packages was £275,751, and the average payback period was 8 months. Whenever voluntary severance proposals: departed from the standard terms approved by Court; or exceeded £100,000; or involved a member of SMG, the matter was required to be referred to Remuneration Committee for decision. The Committee was advised that there had been no cases of this sort since its last meeting. On 23 May 2016, Remuneration Committee had agreed that, subject to certain criteria being met, the University should provide an opportunity for high earning staff who withdrew from their occupational pension scheme to apply to receive a salary enhancement. It had been agreed that applications would be considered by the Principal, Senior Vice-Principal and Secretary of Court, and that Remuneration Committee should routinely receive a report on the number of applications approved. The Committee was advised that, since its last meeting on 23 May, 9 requests for Salary Augmentation had been approved.

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6. Performance & Development Review

The Director of HR updated Remuneration Committee on the experience of Performance & Development Review in 2016. Several modifications had been made to the exercise this year: a lighter-touch approach was being adopted to moderation, a 4-point performance outcome scale had been introduced, and there had been no forced distribution of outcomes. In addition, the system had operated online for the first time.

While the modifications had generally been well received, the introduction of the online

system had proved difficult for many staff, and had undoubtedly contributed to a decline in the proportion of P&DRs successfully completed. This currently stood at just 84%, compared with 96% for 2015. Of the outcomes reported, 18% of staff had been recognised as making an ‘exceptional contribution’, with the large majority (80%) recorded as ‘strong contribution’. Much good progress had been made in embedding P&DR within the University in recent years, and the Committee hoped this progress would be sustained in future following the difficulties experienced with introducing the online system. The Committee felt that, looking to next year, the University’s managers might give consideration to two features of the P&DR outcomes. Firstly, across all grades, there had been very low usage of the ‘Inconsistent’ and ‘Improved Performance Required’ assessments, which together had accounted for just 2.4% of 2016 outcomes (an exception to this rule was the Department of Estates & Buildings, where 21% of staff had been placed in these two categories). Secondly, a lower proportion of exceptional ratings had been afforded to staff on lower grades, with just 13% of staff in Grades 1-5 assessed as ‘exceptional contribution’, compared with 28% of staff in Grade 10. It was noted that the relatively high proportion of exceptional ratings at Grade 10 would serve to reduce the level of performance-related award available for professorial and other Grade 10 staff.

7. Principal’s Salary

The Principal and the Director of Human Resources absented themselves for this item. The Convener of Court briefed the Committee on the annual review of the Principal’s

performance which she and the outgoing Convener, David Ross, had jointly conducted. They had benefited from feedback provided by members of Court and by members of the executive in the form of a 360° appraisal. That feedback had consistently reflected the respect that was felt for the Principal’s leadership of the University. He was uniformly acknowledged to be performing to a high standard, to be strongly committed to the success of the University and to be approachable and straightforward in his dealings with staff. He was also perceived as a very well-respected figure nationally as well as within the University.

Turning to remuneration, the Committee noted that the Principal’s salary, relative to

those of other UK university principals, did not appear to reflect fairly on his personal performance or that of the University. That being said, the Committee took the view that, having rewarded all members of SMG a 1.1% salary increase, reflecting the performance of that team as a whole, it would be only appropriate that the Principal should receive the same level of salary increase as the other members of that Group. The Committee therefore agreed that the Principal’s salary should be raised by 1.1% with effect from 1 August 2016.

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The Committee concluded its discussion by recording its concern that the Principal’s

salary level was clearly below the Russell Group average, and indeed below the average for the larger non-Russell Group universities. While it did not propose to address this deficit in 2016, in view of the current economic climate and the desire for consistency among members of the SMG, the Committee noted that, with regard to retention and to offering fair reward, it was an issue it would consider further.

8. Vice-Chair

Court had asked that each of its Committees identify a Vice-Chair who would deputise for the Chair as required. On the recommendation of the Chair, Remuneration Committee agreed that June Milligan be appointed as Vice-Chair.

9. Date of Next Meeting May 2017; date to be confirmed.

Action: DN

DN, 24.11.16

court minute of meeting held on wednesday 12 october 2016 ... · crt 2016/4.2 higher education and...

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