Dawn Ward CBE, Chief Executive and Principal of BSDC responds to open letter from recognised trade unions

BSDC’s recognised trade unions have written an open letter to our Chief Executive and Principal Dawn Ward CBE. In the interest of continued openness and transparency, we have published Dawn’s response below. 

23 July 2019 

Dear Sheila, Adrian and Kate 

Open letter dated 9 July 2019 (received on the 11 July 2019) 

Thank you for your letter dated the 9 July 2019. Before I answer your questions specifically there are a number of inaccuracies in your letter that I must clarify so that all parties are clear and so that you have the context and rationale in which decisions at our College are made (which I know John Beaty has continued to provide you through your regular meetings and written dialogue).  

Firstly, your letter’s narrative about pay misses a number of points. Our Teachers receive incremental pay progression each year until they reach the top of their pay spine. You also rightly state that we have increased our support scale pay spines to reflect changes to the National Minimum Wage. This positively impacted 44 BSDC employees and again, as you state, was a legal requirement. Additional to this we increased the subsequent 7 support area scales benefitting a further 88 employees. On top of this all employees received a non-consolidated pro-rata bonus of £200 based on the 2017/18 performance of our Saudi company. Analysis over the last 5 years shows that 35 employees (8.5% of all staff) have not had any increase in pay over the same period (other than the 2017/18 bonus). We are currently talking to our Board about ways in which we can resolve this for these specific employees. Additionally, analysis of our terms and conditions versus that of other colleges locally places us third (out of eight) in levels of teaching salaries and fifth (of eight) for support staff salaries. Of course, we would want this ranking to be higher and we will continue to strive for this but must always do so in a way that considers the following sector wide financial challenges that we continue to face.   

The funding context for the FE sector is stark with this now being more widely acknowledged by all related stakeholders within our sector and, importantly, key decision makers and influencers. Funding has declined drastically (the last decade has seen over 30% cuts to FE budgets) in real terms and other costs (such as pension liabilities) are increasing. Many colleges (understandably) are finding riding this storm a challenge with the adverse effects of this seeing increased FE Commissioner intervention and, sadly, one college being placed in educational administration. This extremely challenging environment requires difficult decisions and an emphatic focus on the long term financial sustainability of our College to protect as many jobs as possible for the future. It is this strategy that the Board have undertaken and, as you know, we have worked very hard to communicate and engage with all staff (Staff Voice, Team Talk, Principal’s briefings) so that they understand this difficult and challenging context.  

Again, as you know Senior Post Holder (SPH) pay falls within the remit of the Colleges Remuneration Committee and this committee follows the best practice guidance from the Association of Colleges (AoC). It would be wrong for me to comment specifically on SPH pay but there are two points that I would like to reiterate. Firstly, SPH work relating to our Saudi company is designated at weekends and during holidays as the Kingdom’s working practices are different to those of the UK. Secondly, I perform other roles outside that of BSDC Chief Executive and Principal with these bringing our College £60,000 per annum of additional income to pay for my time. All SPH remuneration is transparently published annually in our Colleges Financial Statements and these can be found on our website. 

Of course, in all College roles, overtime would sometimes be required, and we have a ‘Time Off In Lieu’ (TOIL) process which provides equivalent time off in these instances. I can also assure you that there are no courses or programmes in our College that have not had all necessary equipment, materials and resources allocated to them through our curriculum planning process. I would also like to highlight that all employees’ contracts of employment require them to inform the College of any additional work undertaken with a third party. Our internal analysis of this information shows that there are only a very small minority of cases at the College and that these relate to staff who work part time at BSDC.       

As has been stated to you before ACAS have no power to change the funding situation in our sector (they also did acknowledge, through our discussions with them, that they were seeing the impact of these challenges across our sector). Of course we want to engage constructively with you our recognised trade unions (as we do with non-trade union members through ‘Staff Voice’) but we must be realistic about what can be achieved through a third party that cannot change the context in which we have been having ongoing discussions over many months.  

In your letter you make reference to the Colleges financial reserves. Recently we sold some land as part of our property strategy that was surplus to requirements. The land sale proceeds are capital fund restricted under the Education and Skills Funding Agency (ESFA) financial memorandum and cannot be used for revenue purposes which is a significant and majority proportion of the reserves you highlight in your letter. We are, however, using these capital funds to invest in College infrastructure and technology that helps the day to day operations of our staff and supports improvements in teaching and learning.  

I also must make it clear that it is our international income that has been used to retain staff and to support the Colleges ongoing strategy of protecting as many jobs as possible for the long term. Put simply, without the money from our company in Saudi Arabia (£1.6M in 2017/18) our College couldn't have kept people in work. As you know funding for the sector is inadequate and increasing staff costs would lead to redundancies and an increased workload on all other staff (including your members). 

All staff (including local union representatives) have been made fully aware of our financial position which has also been conveyed in recent mid-year financial updates and I know John has made this information available to you in his communication of the 15 March 2019. More recently the ESFA have informed us that they will not recognise our joint venture income (from our Saudi company) when assessing our financial health creating additional pressures on our budget and the need to balance our UK government grant income and expenditure. The results of this technicality are a ‘satisfactory’ financial health rating for our College for 2017/18.  This may be something you want to proactively work with us on as recognising our joint venture income would put us in a different place. 

I realise that this situation is not ideal and, like you, would like our College to be in a position where longer term funding gives rise to us providing increased remuneration for our employees. Until this time my role is to navigate these funding challenges (which are now widely acknowledged across our sector and in Government) with the Strategic Leadership Team and Board to ensure any increases in costs are sustainable and protect the whole college community ensuring Burton and South Derbyshire has a financially viable College that is there for its learners, staff and community for many years to come. That will always be my continued focus. 

Responses to your Questions

1. This question is answered within the context given above.
2. Until we have sight of sustainable and recurrent UK funding increasing our cost base adds significant future risks to our College in an already precarious financial climate.
3. Our strategy over this period of declining College funding has been to protect as many jobs as possible and we must continue to do this until we reach a time where College funding is addressed nationally.
4. Our College has a good reputation locally. We are confident that our staff, learners and parents and the employers we work with understand the difficult context in which we operate (and which we have acknowledged is not ideal) but would expect us to focus on ensuring that East Staffordshire and South Derbyshire has a financially sustainable College for many years to come.
5. Information relating to the remuneration of SPH’s is publicly available and based on, amongst other things, the performance of our international business. This business brings significant additional income to BSDC which supports our strategy of protecting as many jobs as possible for the long term and partially bridges the gap between our domestic income and expenditure.

Finally, you state in your letter that you are preparing to “shine a light” on the financial situation at our College. I welcome this transparency so, to this end, have published this response on our website with it also being communicated through our social media channels. This way, we can all be assured that the fullest context to this financial situation is given and that all College stakeholders have clarity on our two-way dialogue.  

Yours sincerely

Dawn Ward CBE 

Chief Executive and Principal