08 February 2023 
Matt Sisson, Projects and Membership Manager
BUFDG
With just under five weeks left to go, we’re pleased to see that almost 700 HE finance staff have already signed up to join us for this year’s Finance Festival, starting 13 March. If you’re not one of them, but you’re intrigued by the choice of 37 informative (and completely free) sessions covering a wide variety of topics, you can find out more about the programme and speakers, and make use of the booking link via the BUFDG website here.
In case you missed it in the last Digest, over the last year BUFDG has been one of the partner group of organisations involved in the production of a report called ‘Accelerating towards Net Zero’, which was published recently by The Royal Anniversary Trust and the EAUC. Subtitled ‘A sector-led proposal for action and co-ordinated thinking’, the publication is supported by the Department for Education, which describes it as “a welcome blueprint for innovation across the sector on our journey to Net Zero”. We encourage all UK universities to engage with the report at the most senior level and to use the BUFDG network to contact colleagues at the universities who have been involved in this project. We are pleased that we have been able to join sister PHES organisation AUDE in contributing to this work, along with the support of CUBO and HESPA.
Fifteen BUFDG member universities are featured within the report, which has three main objectives: firstly, to share knowledge; secondly to propose a Standardised Carbon Emissions Framework (SCEF); and thirdly to make policy recommendations to government. Its mission is for UK tertiary education to be “a global leader in accelerating the climate emergency response.” It also has recommendations in common with Mission Zero, a recent report by former Universities Minister, Chris Skidmore. You can find out more about the report via this news article. The summary, recommendations, and a set of common FAQs relating to the publication and the SCEF, can be found on the EAUC website.
SECTOR / FUNDING
The big political news this week is the end of BEIS as we know it. We have two new departments as a result – the Department for Science, Innovation, and Technology, and a separate for Department for Energy, Security, and Net-Zero. We also have a new Department for Business and Trade, which will take some of the bits from BEIS and also incorporate what was the Department for International Trade. Michelle Donelan will hold the SciTech brief, Grant Shapps is the new Energy and Net-Zero secretary, and Kemi Badenoch takes Business and Trade. There’s a round-up in the FT, and a summary of the implications on Wonkhe.
The Scottish Government will face a significant budgetary tightening over the next few years, according to work done by the IFS. The summary suggests that “After taking account of in-year funding top-ups this financial year, which under current plans will not be available in 2023–24, funding will fall by 1.6% in real terms in 2023–24 compared with this year. Even after adjusting for major one-off costs this year, such as council tax rebates, the reduction will still be 0.8%.”
David Kernohan has, as usual, an excellent article in Wonkhe covering the current pay dispute in HE. There’s an excellent explainer of the data we have on who gets paid what, and how much that is in relative terms. We’re also pleased to see that he makes reference to the BUFDG guide on Understanding University Finance. This is available on the new Understanding Finance section on the BUFDG website. Make this your first port of call if you need to find the language to explain anything HE finance to colleagues across your institution.
Following the recent experience in FE, many of us have been spooked by the potential of an ONS reclassification of the HE sector over the next 18-months or so. It was a process initially expected back in 2017/18 but delayed awaiting the outcomes of the Augar review. There are far more questions than answers at this stage, but Smita Jamdar at SHMA has some interesting thoughts on the implications. Over at HEPI, LSBU V-C Prof. David Phoenix warns that a move to a graduate tax system of funding could have added complications, and Nick Hillman argues that while the current system is far from perfect, there are reasons why it has lasted as long as it has. A reminder that Nick will be delivering the opening plenary at our Finance Festival next month.
Rising interest rates are responsible for an improvement in the funding position of USS, according to the latest monitoring figures.
HEFCW has published updated guidance for Internal Auditors in FE and HE to use.
Finally, will your Annual Report this year be a ‘door stopper’? Research reported in the FT finds that the average length of a report for organisations with a turnover between £250mn and £750mn is 94,000 words, and is growing by 6,100 words (or 9 pages) a year. James Ashton, chief executive of the Quoted Companies Alliance (QCA) that undertook the research, said “The perfect annual report should be true, fair and succinct, offering reassurance, insight and clarity to all stakeholders, but we risk turning them into vast, hard-to-navigate data dumps. It’s time to close the book on these never-ending stories.”
FINANCIAL REPORTING
FRED 82 ‘Draft amendments to FRS 102, The Financial Reporting Standard’ was published by the Financial Reporting Council (FRC) in December 2022 with a consultation period running to 30th April 2023. Any amendments to FRS 102 will subsequently be incorporated into a new HE/FE SORP (SORP 2025), with the anticipated effective implementation date being for accounting periods commencing on or after 1st January 2025.
BUFDG has established a small working group which will run through to the publication of SORP 2025 and we will be appointing a development partner to assist throughout this process. Sector specific guidance will be issued in due course. BUFDG will also be responding directly to the consultation document and all comments on this Discussion Board item will be considered in framing our response, so please do contribute if you can.
TAX
We have been contacted by HMRC policy team with this message on the use of the stipends concession at universities. They are seeking volunteers to provide direct feedback on the use of Statement of Practice 4/86, the current concession threshold of £15,480 and how you use HMRC's current guidance (including where you might find it confusing). They've included a couple of questions in their email to focus the sessions. As you'll see, they are planning to hold the 'immersion sessions' (Andrea's comment "get ready to be dunked") in March. If you would like to be involved please email Julia.
The Government’s ‘Travel to [enter European country of your choice here] for work’ guides have been updated to ensure accuracy up to 9 January 2023. A full list of the countries and changes can be found here.
A few universities have made unexpected direct debit payments to HMRC that are not for their own university’s tax liabilities. Please check your bank statements carefully. If you have made any unexplained direct debit payment to HMRC please email Stuart Small who will check if they are for a genuine tax liability. If they are not, you may need to contact your bank.
KPMG has put together a thought-piece on how tax leaders can support their organisation’s ESG journey. A ‘to do’ list of blogs includes: What does Net Zero mean for tax?; Why tax is crucial to the supply chain of the future; Tax transparency: an ESG priority; How will you engage your most demanding ESG stakeholder? and; Tax governance: and ESG essential. You can view the main blog here.
BEIS has published a consultation into the pro-rating of holiday entitlement for part-year workers following the Harpur v Brazel case highlighting the legislative absence of apportionment. BUFDG will be responding to this consultation by the due date of 9 March but will be seeking your collaboration over the next month. In the meantime, please read through the consultation and us know below on this discussion board post or via email if you would like to assist with any part of the response (e.g. reading through a draft, providing examples, etc). For further analysis of Harpur v Brazel or the consultation itself, KPMG has published this article summarising the key points.
There have been some issues with BEPS Pillar 2: ‘multinational top-up tax’ and how it could impact on subsidiaries of universities (and other not for profit organisations.) Sally Mckinlay, Harriet Latham and Andrea Marshall have been speaking to HMT and HMRC Policy, who have been exceedingly helpful. Harriet has kindly prepared this summary of the current position
As usual, please visit the TaxHE page for all the latest tax news.
PROCUREMENT
A reminder that the Procurement Value Survey (PVS) is open for 2021/22 submissions until 17 February 2023. The Efficiency and PVS page on the HEPA website contains all the information institutions will need to complete the PVS, including the Benefits Methodology. The Help page contains answers to frequently asked questions such as treatment of VAT, calculating impactable spend, calculating spend with SMEs and the Procurement Practise Indicators (PPIs). If you require access to submit the PVS on behalf of your HEI then please do get in touch with Ashley.
ENERGY / SUSTAINABILITY
One of the last acts of BEIS was to announce £32m in funding for England and Wales for upgrading old and inefficient heat networks. It won’t go very far, and it is only useful to those who are already part of an ageing district/communal heat network whose other beneficiaries are in a position to pursue the funding. However, every little helps!
A few weeks ago Karel attended the UUK Sustainability conference where, among the many interesting sessions, was one by Laila Takeh from Deloitte who talked about A blueprint for a green workforce transformation. The striking stat in the Deloitte report is, “ 80% of individuals who will be in the workforce in 2030 are already working today which means that now is the time to act to build their capabilities for the future.” We heard about universities that are educating others, but not so much about how universities are educating their own workforce. While many institutions have excellent internal programmes for their own staff, the EAUC’s Carbon Literacy Training could be an alternative place to start.
Cazenove has launched a survey on HE progress towards net-zero in general, and environmentally-conscious investing in particular. They will make use the survey outputs as part of their Finance Festival session on the afternoon of Monday 13th March. If you’d like to contribute to the survey, you can do so using this link. And if you have any questions, please get in touch with Emily Petersen.
Last week the team at TEC ran another excellent energy market update webinar. It looked back at the first half of this winter and considered how next year’s Energy budgets are shaping up. There were also lots of useful questions and answers. If you weren’t able to make the webinar on the day, you can watch the recording on the webinars page here (you will need to be logged into your website user account in order to access them).
JOB OF THE FORTNIGHT – is at the University of Bradford
Our Job of the Fortnight is for a Tax and Compliance Manager at the University of Bradford. The successful candidate “will take a lead role in all aspects of the University's tax and corporate compliance reporting, interpreting relevant legislation and providing advice to senior mangers of the university. They will also contribute to a range of strategic objectives within the University's overall Finance Strategy.” The deadline for applications is 13th February.
There are more vacancies listed as usual on the BUFDG jobs page.
