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BUFDG Finance Festival 2023

13th-15th March 2023
Online - Hopin

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Programme


Click to expand each of the sessions below and find out more about them. Session speakers can be found using the 'speakers' link in the menu to the right.

MONDAY

9.30 - 10.30

HEPI Director Nick Hillman will kick-off the Finance Festival by talking about the current context of UK Higher Education. He will highlight the current themes challenges facing the sector, the policy environment, and what changes we can expect over the next 12-18 months.


11.00 - 12.00

Many universities will be aware that the Pensions Schemes Act 2021 introduces new duties for those involved in running defined benefit pension schemes. In particular there are now extensive obligations to reflect and report on events that may impact pension schemes, including routine major projects, refinancing, restructuring activities and investments such as spin outs. Failure to comply with the pension regulations can result in fines up to £1m and could attract prison sentences of up to 7 years and/or unlimited fines.

At a time when many universities are already grappling with finances and the rising costs of borrowing and potential recession, this threat of significant fines could act as a significant impediment to legitimate restructuring and investment activities.

Nigel Bolton and Rachel Soundy from Bevan Brittan’s Higher Education Team, reflect on the impact of the Pensions Schemes Act 2021 on universities’ finances and what it may mean for university projects and investments going forward. They will provide practical tips for universities who are planning investments on both their obligations to TPR and also the key considerations in finance documentation.

Student experience is topping the agendas of higher education institutions globally, and universities who can deliver not just exceptional educational outcomes but also an outstanding student experience will be at a competitive advantage. However, in an environment where universities face significant financial and resourcing pressures, knowing where and what to invest in to can be a challenge. During this session we will: Share the findings from our recent study that explores how universities can deliver a sustainable and outstanding student experience; Identify where universities are wanting to invest in over the next five years and why, and; Discuss how to ensure a return on this investment.

Challenging market conditions along with future capital requirements have made debt funding an increasingly important consideration as a source of capital and liquidity for the higher education sector.

Though financial markets conditions have become more volatile and the sector faces new as well as ongoing challenges, there remains appetite from banks and investors to support the sector’s funding needs. This includes new forms of funding such as sustainability finance. Sustainability finance has key attractions for higher education institutions, along with pricing benefit, aligning the sector’s sustainability goals with the funding raised.

The panel includes the University of Derby and the University of London who have recently raised sustainability linked funding, as well as law firm Mills & Reeve and treasury advisor Centrus who have advised on these transactions. The members of the panel will discuss their recent experiences undertaking these transactions, including fundraising in the current challenging environment, balancing risk with investing for the future. The audience will be invited to ask questions of the panel members.

Creating a strong culture of inclusion should be an important part of any organisation; an area which is seen to be invested in and supported at all levels in the organisation.  We know that truly diverse organisations have increased innovation and they have higher levels of retention. We know that individuals are ten times more likely to leave an organisation based on a toxic culture than anything else, research has shown us that. With organisations giving so much energy to a pay and reward environment when actually the culture of an organisation where people feel psychologically safe i.e. safe to challenge, safe to speak up, safe to be authentic and be themselves, and safe to have an opinion, can be a real game changer.


13.00 - 14.00

As awareness of adverse impacts grows, the attitudes and aspirations of many people, not least students, are changing. Survey evidence, public discourse and increasing protests all point to an increasing shift in attitude to what is a desirable - or acceptable - way for companies to behave, and in how people now wish to invest their money. The conundrum today is that few investment strategies fully meet the new requirements for sustainability.

The first step in embracing investment sustainability is to fully understand how a business operates, in order to be aware of the risks, how these are then measured, and management accountability. The second step is down to personal choice, namely the tolerance of the level of harm caused in generating investment returns. There are conflicts of interest in admitting to causing adverse impacts, and a reluctance to measure them. So adverse impacts need to be measured in other ways, often relying on sources outside the company and making estimates based on detailed knowledge of the company’s production processes. This is very labour intensive and unsurprisingly, many investment management firms do not undertake sufficient detailed research. With measurement comes accountability, and it is the board of directors that is ultimately accountable for the operations of a company. But it is the shareholders that vote to appoint the directors and set their incentive structures. In 2020, only 0.3% of director appointments worldwide failed to receive majority support. This implies either a quite remarkable degree of alignment between directors and shareholders or a failure in accountability. If businesses are to change to address the immense global challenges, fund managers will need to be much more active in following through on their sustainability claims and holding directors to account.

HE finance professionals will be all too familiar with the annual cycle of financial data submissions required by the Office for Students (OfS), as regulator of HE providers in England. But do you know how the OfS's use of this data fits into its approach to regulation more widely?

This session will look at the role of the OfS and its approach as a student-focused, risk-based and principles-based regulator - and ask why is this all relevant to finance teams anyway?

We'll consider the OfS's approach to monitoring and intervention and what it can do if it assesses an increased risk of a provider breaching its D conditions of registration around financial viability and sustainability.

We'll dive deeper into the new guidance on "reportable events" with a finance focus, looking at the role of finance professionals in identifying potentially reportable matters, with practical examples based on our own experience of supporting universities with OfS reporting.

In touching on other key areas of interest within the OfS's framework, we'll also explore how OfS regulation is changing, looking at recent developments and current priorities in its regulatory focus.

Earlier this year we commissioned a green campus survey, which highlighted how institutions seem to underestimate the importance of sustainability for prospective students. For example, the report found that around three quarters of prospective students would be influenced by: the use of green energy to power campus buildings (73%), sustainability being an important part of learning, teaching and research (78%), and decision makers at that institution factoring in climate change in all decisions (75%), when choosing their place of study. However, institutions themselves undervalued these factors, with less than half (48%) agreeing they believe that factoring climate change into decision-making would be important to prospective students.

We will be issuing the full report later this year and will use its key themes and findings to cover off:

1. Financial implications of a Green Campus
2. What does this mean for sustainability plans and can you achieve it in a cost effective manner
3. Energy efficient route / Onsite renewables / Community infrastructure – i.e. district heating schemes
4. Construction: Modern Methods of Construction

We will also reflect on what might be next for sustainable energy following rising costs of energy due to the war on Ukraine.

As the world and Higher Education Sector evolve, so must Finance Business Partners. Under the leadership of Mark Chester, Loughborough University has created a Commercial Finance team, comprising Procurement and Commercial Finance Business Partners. This new team is re-defining how we support our fast-paced commercial areas and ensuring we leverage the value Procurement can bring, alongside compliance. Mark will talk through the formation of the team, the challenges, early successes and plans for the future.


14.30 - 15.30

Many of our large energy user clients have successfully used Power Purchase Agreements (PPAs) with renewables developers to lock in competitive electricity prices, while simultaneously demonstrating a sustainable purchasing choice to investors, customers and employees.

The session will explain what PPAs are, how they work for on-site and off-site renewables projects and the most commonly encountered PPA structures (including property arrangements for on-site renewables projects).

Many universities have made ambitious and commendable climate commitments. However, many are yet to decide whether and how to include their investment portfolios in net zero targets. This session will present results of a survey summarising the university sector’s current net zero commitments, the attitudes to incorporating investments, the barriers and the effective strategies already being employed. We’ll provide practical advice on how universities can transition their investment assets and track progress towards net zero, whilst maintaining the financial returns your teams rely on. We’ll also hear from two universities on how they’re tackling the challenges and yielding the power of influence.

Does the current perfect storm of financial challenges lend credence to the argument for a sector-wide approach to financial benchmarking? What lessons have been learned from other such exercises that are relevant to UK Higher Education; what benefits would this offer beyond the current peer group benchmarking approach; and how could this come about? We discuss the potential for a UK sector-wide approach to Financial Benchmarking, drawing on examples from New Zealand and Northern Ireland. We’ll also be chatting with experienced Interim CFO and turnaround specialist, Nirmal Borkhataria, as he talks of his own experiences benchmarking UK universities, and what value there could be in a wider, more collaborative approach to Financial Benchmarking in the UK.

With the release for consultation of its latest Exposure Draft (FRED 82), the Financial Reporting Council is proposing the largest changes to the FRS 102 accounting standard since the standard came into use nearly a decade ago. The changes cover a range of areas, but the most important for the sector are the new Section 20 (Leases), which would have the result of many more leases coming onto the balance sheet, and a new Section 23 (Revenue), which will align closely with International Financial Reporting Standards. Deloitte LLP will talk you through both the high level scope of the proposals, and some of the key likely impacts, focussing on the changes to the leasing standard, which will likely have the biggest impact on the providers. With plenty of examples, and pitfalls to look out for, as well as a chance to “ask the experts”.

 

TUESDAY

9.30 - 10.30

With a strategic focus on the Higher Education sector, CIBC Capital Markets has developed products, partnerships and initiatives to help its university clients navigate, and minimise the impact of, economic and political policy across the globe. Join Jeremy Stretch (Chief FX Strategist) and Dan Sutin (Executive Director, CIBC Capital Markets) as they provide a Macro-Economic and Foreign Exchange forecast and explore the impact on the Higher Education sector in the UK.

 
11.00 - 12.00

At some £300 billion, public procurement accounts for around a third of all public expenditure every year. By improving the way public procurement is regulated, we can save the taxpayer money and drive benefits across every region of the country. The Procurement Bill seizes that opportunity and reflects three years of policy development, public consultation and detailed, intensive engagement.

This session will cover what the reforms aim to achieve and how they will affect each part of the procurement process. It will include how this could impact universities and the forthcoming learning and development programme for procurement professionals, to be confident operating within and maximising the benefits of the new regulatory framework.

The sector is known for its valuable pension benefits - but are they really that valuable if they are not always valued by employees and potential employees? The session will provide time to consider what 'flexible pensions' could look like as part of a wider savings platform to support people as they plan for their financial needs in short/medium and long term. As employees adjust to the higher cost-of-living, where are ‘pensions’ sitting in their priority order and how can this help the organisation with retention and recruitment?

We will explore progress of the USS low cost option, and options with all the pensions provided within the sector, including TPS and LGPS. There will be insights on what is happening as employees retire with defined contribution pensions and offer education to delegates as well as a forum to consider the ‘art of the possible’. This will include how a university might approach a review with case-studies to share what others are doing, the importance of a communication strategy and ancillary benefits - and ideas to improve engagement.

‘Financial education’ is increasingly important for overall improvement in well-being - pensions is part of this.

Claim inflation is nothing new however in recent times multiple factors have combined, and will likely continue to combine, to present an increasingly challenging position.  The drivers are varied and can be of an economic, societal, legislative, regulatory, technological, and environmental nature, and that’s not to mention the influences of the Covid-19 pandemic, Brexit and the war in Ukraine. 

The effects are directly or indirectly felt by the general public, private sector businesses, the public sector and their cover providers and can impact all classes of business including property, motor, public liability, employers’ liability and professional indemnity.  This session will consider the various factors in play and their effects with a particular focus on the higher education sector.

As more investors and lenders to the sector report their efforts to be socially responsible, climate aware, and “ESG compliant” they will look for investments that meet ESG criteria. When assessing lending propositions, they will rely on external validation of borrowers’ own claims of environmental, social, and governance integrity. This session explains the range of different ratings methodologies in use and how ratings organisations undertake their reviews of organisations to reach their final assessment and “scores”.

This will be interesting to any university looking for external financing and to universities as investors with an obligation to place funds with organisations whose values chime with their own.

13.00 - 14.00

We have come a long way since our ancestors first introduced trading, and whilst the premise of paying three sheep for a cow remains at the heart of procurement today, the future we face as a profession could be as radically different as ours would appear to those early traders. In this session we will present a view of the future of procurement and explore the trends, disruptors and opportunities our function is facing, drawing on our experiences in both the Public and Private sectors including HE.

What role will advisors take in this new future? How will technology enhance or potentially replace the traditional role of procurement? How will the future solve the problems of both the function and the sector and keep procurement relevant? Returning to the present day we will then discuss what you should be doing now to prepare yourselves and ensure that procurement continues to support your organisations as they grow and evolve.

BUFDG’s tax team, Julia Ascott and Andrea Marshall, will outline the top 10 UK tax issues that are common concerns in the university sector at the moment and provide their thoughts on what action you may need to take to address them.

What role could your university’s investment policy play, beyond being a good governance document? Are there ways in which a university’s investment policy offers both curriculum and engagement opportunities which are under-explored at present? With staff, students and donors increasingly voicing concerns about certain social and environmental considerations relating to investments, is it time for a fresh approach to the development of your institution’s investment policy, which fosters positive engagement with stakeholders and a more positive student experience?

This session adopts a unique problem-solving lens. It moves beyond compliance and offers a new process, called ‘The Listening Stream’.

Drawing on practical experience and case studies of this in practice, Julie Hutchison (Visiting Professor in Governance and Innovation, Edinburgh Napier University, and Charity Governance Specialist, abrdn) will be in conversation with Miranda Richards (Head of Charities - London, abrdn). As the Charity Governance Specialist at abrdn, Julie supports education institutions and other bodies in exactly this kind of new approach to investment policy development. The case studies will illustrate how a workshop-based approach, combining elements of teaching and facilitated dialogue, could lead to positive results in the context of updating a university’s investment policy statement.

Despite, or even due to, economic clouds on the horizon the demand for talented finance professionals across all sectors is unabated. Improve your understanding of the finance recruitment market and how, by harnessing the power of the HE sector, you can compete with employers vying for the best finance talent in the market. Drawing on between them over 50 years of recruitment expertise and experience at Hays, Catherine and Matt’s session will equip you with: Market insights to inform and influence your internal resourcing discussions; Tactical actions to implement straightaway to immediately improve your results, and; A longer-term strategic view to successfully achieve change on all things recruitment and resourcing.

Be ready to share your recruitment related challenges (or even let us know in advance matthew.lewis@hays.com if you prefer!) so we can tackle them on the day, and you can get the maximum outcomes from the session.

14.30 - 15.30

Focussing primarily on payments into the university, this session will look at the threats facing HEI's and their students from fraud and money laundering. We will consider specific case studies and the responses from law enforcement, and reflect on how HEI's are responding based on recent survey findings and common themes identified through a number of university workshops.

Universities have a clear leadership role, opportunity and commercial need to invest in the transition to a low carbon economy. Many institutions have already pledged to deliver ambitious Net Zero targets and are making significant investment in campuses, while others are earlier in their own journey. This session seeks to map the relevant funding options for energy projects (on and off-balance sheet) and draw on experience from case studies to provide relevant insight. Key areas covered:
• Sustainable financing options overview
• The “Green” and “Sustainable” private placement process and case studies
• Sustainable Financing Frameworks
• The difference between ‘Sustainable’ and ‘Sustainability-linked’ debt facilities
• Opportunities for raising project finance for investment in energy solutions
• Commercial structures and project/technology types that suit third-party investment or partnering
• How delivery of a Net Zero plan can be factored into an overall financing strategy.

Overseas tax issues are on everyone’s to do list, but finance teams are at different stages in addressing them.  BUFDG’s tax team, Julia Ascott and Andrea Marshall, will share their thoughts on where to best focus resources.

Within this interactive session we will be exploring whether high commodity prices help or hinder investment into sustainable energy solutions. We will be looking at pricing and consumption data from across the sector, and reviewing whether consumption patterns or forecast consumption volumes have markedly changed. We will then look ahead and ask whether future energy prices, and whether lessons learnt operating through the current crisis, support future sustainable deployment.

WEDNESDAY

9.30 - 10.30

Many universities have started the 2022/23 academic year with a return to pre-pandemic recruitment levels and with cash balances bolstered by cost initiatives, reduced capex and/or access to additional loan facilities raised during Covid. But if FY23 was expected to be a year for reinvigorating strategic plans and getting back to investment, inflationary pressures and the extraordinary increase in borrowing costs will be giving many pause for thought, or indeed concern.

In this session, KPMG will share insights from their work in the sector and across the corporate market as to what market conditions might mean for different HEIs, how HEIs can anticipate and manage potential areas of risk exposure and opportunities, as well as important stakeholder considerations. Areas covered will include:

• Strategic considerations: how should investment strategy and capital allocation be prioritised to best balance short term inflationary pressures vs longer term objectives?

• Evaluating financial resilience: cash, financial covenants, forthcoming debt maturities, debt affordability and assessing whether further cost reduction measures are feasible;

• Stakeholder considerations: can lenders continue to provide support? How resilient are supply chains? How robust are the university’s credit control processes? Are capital projects at risk of contractor insolvency?

• Financing options: for those needing to refinance or fund critical investment, what are the options given high debt pricing and changing lender attitudes to risk? Is now an opportunistic moment to refinance long term fixed rate loans with no/minimal break costs?

11.00 - 12.00

Rebecca Dodd and Mike Harrison will take the audience through what’s been happening and what is yet to come in the world of pensions in Higher Education and in particular how pensions regulation is affecting the future of Defined Benefit (DB) schemes. They will take a closer look at what the changes are and what it means for schemes, employers and of course members. They’ll consider whether this regulatory regime might inadvertently increase the financial and governance burden to such an extent it forces DB closures.

Auditing standards have moved forward (again) and ISA315 takes effect in the Higher Education sector for years ending 31 July 2023. Whilst risk assessment procedures are not new, ISA 315 (Revised 2019) further emphasises their importance in enhancing the auditor’s approach to risk assessment. Risk assessment procedures are used in obtaining an understanding of the entity (‘UTE’), its environment, the applicable financial reporting framework and the entity's system of internal control. Using our experience across over 40 HEI external audits we will bring to life good practice and some case studies on ‘challenges’ – controls assurance is the way forward (definitely for PIEs and a move for any high performing finance team). Audit Committees are more demanding and reasonable expectations are moving. Our session will assist in understanding, moving forwards and being best in class. Building on their session from last year, Adrian and Paula will explore business processes within an HEI environment, how IT supports those processes, a focus on payroll function (‘what can go wrong’) and how you can prepare for this change in auditing standards. With input from one of our HEI finance teams this session will translate the theory into practice with real life experience and ‘what good looks like’.

The aim of this session is to provide insight for HE sector Finance leaders into current debt and interest rate market conditions. We will provide relevant market updates, not just on the products but also on lender sentiment to the HE sector. We’ll give our insight into debt raising in the sector across the most popular debt products as well as the outlook for interest rates and Gilt yields. We’ll also provide out thoughts and how we think potential borrowers should approach a new debt raise and outline best practise when engaging with lenders.

Many organisations have developed their Net Zero strategy, but it can be a challenge ensuring the financial implications are fully-costed for the ever-changing world of Indirect taxes in the VAT sensitive university environment.

Let this session inform you about the practical implications of adapting your physical estate to improve its energy efficiency in areas where energy generation is the aim. What VAT reliefs can be accessed for projects? What qualifies as Energy Saving Materials? How does CCL interact with energy generation ventures? Electric vehicle fleets and on-site charging implications?

Our Indirect Tax specialists Liz Maher and Mike Trotman can talk you through the latest regulations and their implications for financial budgets as you drive forward to your Net Zero goals.

13.00 - 14.00

This session will explore the benefits of starting an endowment or growing an existing one, the potential considerations and challenges, and a discussion on the potential investment opportunities. Long-term reserves can be used to secure the future financial position of your university providing a pool of funds that can be used for future projects, bursaries, estate development or through difficult times. The investment strategies that can be deployed are able to deliver a real impact on some of the world’s most pressing issues, truly align to the values of your university and be part of the core ESG programme your university may employ.

We will be joined by guest speaker Simon Crick from the University of Suffolk who will share the university's journey in starting a long term reserve to secure the future of generations of students to come. Together we will go through the steps they had to take as well as the deliberations they had before making that final decision. We feel the session will be informative, practical and inspiring. All universities have the ability to have long term investments - you just need to take that first step…

Many HE Institutions have found the external audit market different in recent times, particularly when retendering services. Why is this? Following a number of well-publicised issues with high profile listed company audits and the subsequent reviews into the audit sector published in 2018 and 2019 (Kingman Review, Competition and Markets Authority review and Brydon Review) audit regulation is increasing. This, along with other economic factors, is impacting the supply of audit services in the HE Sector.

Buzzacott will explore these factors during this session and what you might be able to do in response. In addition, they will look at some of the new audit requirements that have emerged and how these will impact your 31 July 2023 audits. Buzzacott will give a particular focus to the new International Standard on Auditing (ISA) 315, and its focus on general IT controls. This new auditing standard significantly increases the level of consideration that auditors must give to IT systems, controls and the related risks to the financial statements. The presenters will then explore the new questions that you may get asked during your 2023 audit and what you can do to prepare.

In this session, Catherine Murray, Director of Planning at QMUL, and Will Argyle, Assistant Director, Financial Planning & Reporting at Durham University, will talk through their University's approaches to data visualisation, and why it is important. They'll explain how to improve the quality of information that supports decision-making by doing the following:

• Utilising simple, but well-designed visualisations to produce intuitive dashboards.
• Combining data from multiple sources to create deeper insight.
• Focusing on the need for consistency and data quality across the organisation.
• Making best use of technology to automate data processing that was previously done manually.

With the emergence of net zero claims and accusations of greenwashing, it has become important to ensure any claim is supported by a robust strategy and decarbonisation road map. In this session, we will talk about: The net zero landscape; What this means in the University sector; The key frameworks and guidance available to demonstrate progress, and; How to get the right assurance for any claims that you make.

14.30 - 15.30

The next half century will be shaped, for better or worse, by humanity’s collective response to climate change, which is itself a symptom of a deeper underlying problem: our prevailing economic system is in ecological overshoot, even as it fails to satisfy universal human needs.  The quality of our response depends on many things because the challenge is not merely an engineering problem but also a cultural one, resting on the speed with which we can transform our relationship to power, both literally and figuratively.


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