Adnodd Board meeting: 19 June 2024 14.00 – 16.30

Adnodd:

• Gethin Davies, Chair (GD)
• Lesley Bush (LB)
• Sioned Roberts (SR)
• Lucy Thomas (LT)
• Huw Jones (HJ)
• Nicola Wood (NW)
• Mair Gwynant, Chair of ARAC (MG)
• Emyr George Chief Executive (EG)
• Ruth Davies (RD)
• Elliw Roberts (ER).

Welsh Government:

• Megan Howarth (MH)

Effectus HR:

• Nia Bennett (NB) – items 1 to 6 only

Azets

• Ashley Bryan (AB) – item 7 only

Observer:

• Lleucu Siencyn (LS)

Apologies:

None

GD welcomed all attendees to the meeting and explained that those who are not members of the Board would leave the meeting for item 6.

Nothing to update from members.  MG stated that she had made an application to join the Board officially.  She will leave the meeting when the conversation turns to matters of Board recruitment.

It was noted that the minutes of Board meetings have yet to be published, which will be actioned once the website is up and running.

It was agreed that the minutes were a true and accurate record of the meeting.

The Chair thanked the board for responding promptly on issues that had required attention since the last board meeting.

The Chair noted that a letter has been sent to Welsh Government regarding the process for making new appointments to the board.

It was noted that the performance review process of all board members was now complete. Referring to a common theme amongst members regarding training for the Board, it was suggested that an hour’s training session could be added to the board meetings, to maximise efficiency and availability.

It was noted that Ann Evans will be returning to work directly for Welsh Government in July. GD thanked her for her valuable contribution to the work to help create and establish Adnodd.

Action: A questionnaire will be circulated in July regarding the board’s effectiveness, which will include questions to help shape a training programme for the Board.

Referring to the update on Adnodd’s VAT status, it is now foreseen that a case can be built for partial exemption from VAT, but that more work is needed to develop the operating model before the application can be progressed.

Closed item.

It was noted that the narrative reports for the statutory accounts for 2023/24 included in the board’s papers were early drafts only. The Board was asked to agree the following next steps so that final versions could be produced and submitted to the board for approval in September.

1. Executive Team, Azets and MG to discuss and produce a further draft.
2. Schedule an additional ARAC meeting in July to review and comment on the next draft.
3. Executive Team and Azets to refine further as needed
4. ARAC to review finished reports in September identifying any minor changes that will be needed so they can be recommended to the Board for approval.

It was noted that ARAC had previously scrutinised the financial accounts for 23/24 and was satisfied that they were accurate.

The Board agreed on the next steps for refining and approving the statutory accounts and reports for 2023/24.

Azets explained that there was a notable underspend in 23/24 as it had taken longer than originally expected to appoint Chief Executive and to put contracts for corporate services in place.

It was noted that ARAC was content with the figures, but refinement is needed on the final report. Azets will report each quarter against the budget.

It was noted that VAT needs to be considered when looking at the figures. It was noted that ARAC had reviewed the figures in detail and questioned the high level of expenditure for some contracts but was reassured that the figures are correct.

Action: MG to meet with Azets to verify and refine the presentation of the financial information presented in the 23/24 statutory accounts, as well as the 24/25 budget.

It was agreed that the board accept the report as an accurate reflection of the company accounts.

It was noted that Curshaw has advised that a ‘light touch’ regime could most likely apply to the early commissioning work as it will be for ‘education services’. In principle this approach can be used for awards of up to £600,000. Curshaw is working on the Procurement policy to include this type of approach.

Action: MG to have sight of the Procurement Policy in draft form to confirm that it is appropriate, effective and does not create unacceptable risks for Adnodd.

It was confirmed that Darwin Gray have been asked to seek a barrister’s opinion on the proposed approach, and to note any potential risks and how these could be mitigated. The opinion will look specifically at whether a direct award approach can be used to commission WJEC to produce GCSE resources. The advice should be available within three weeks’ time.

MG requested for the advice to include consideration of any risks and implications in relation to subsidy control.

Action: Share legal advice with MG, once received.

It was noted that there was a need to look at the Gross Amount figure for the commissioning budget as there may be suppliers that are not VAT registered. Using this figure will help better manage the budget.

Action: It was agreed that the executive team will discuss the approach and legal advice with MG and, in the absence of any significant risk or hurdle, will proceed with the next steps noted in the paper.

It was agreed to adopt the delegated authorities for procurement decision in line with the recommendation stipulated in the annex provided.

Action: It was suggested that a guide should be devised to supplement the procurement thresholds for board members involved in the decision-making process.

It was explained that this item provides an update on efforts to secure additional budget from Welsh Government and discusses the context and strategic implications of the work.

It was noted that Adnodd had been working with WJEC and Welsh Government to develop a business case to request additional funding from Welsh Government to secure a comprehensive package of educational resources to support the first round of Made-for-Wales GCSE courses starting from September 2025. The business case is now with the Partnership Team at Welsh Government and will be submitted to the Cabinet Secretary for an urgent decision.

The additional budget is intended to augment the investment WJEC is already making in new resources, to ensure that a complete package of resources is created that will cover all new elements of content across all GCSEs introduced in September 2025. The proposed commission will enable WJEC to recruit additional staff to ensure adequate capacity to complete the work quickly and by summer 2025 at the furthest point.

Securing resources to support new GCSEs is one of the main risks Adnodd faces over the next two years. It was noted that progress so far is promising. It is also worth noting that Welsh Government and WJEC face the same level of risk as Adnodd on this front, which provides a solid basis for effective and efficient co-working.

It was noted that legal advice is expected to confirm whether the proposed commissioning and contracting approach will be appropriate and that any associated risks can be mitigated.

It was agreed that the MG would meet with the executive team to discuss the financial and legal details of the proposed commissioning approach.

It was noted that the Partnership Team was confident of receiving a positive decision from the Cabinet Secretary, and, therefore, important to note that the proposed commissioning programme discussed under the previous item was developed on the assumption that Adnodd will succeed in securing an additional budget for GCSE resources. Consequently, if Adnodd is unsuccessful in its bid, the whole commissioning programme will need to be revisited.

The update was noted by the Board along with the strategic, fiscal and operational considerations.

It was explained that a progress report will be produced and published which will be different and separate from the reports that will accompany the annual statutory accounts.

The report will satisfy the requirements stated in the Adnodd Framework Document to produce an ‘annual report’ on our activity for WG. The report will be aimed at a broad audience and will therefore borrow and adapt elements from the statutory reports to provide a narrative of what has been achieved so far and some of the plans for the year ahead.

Blue Stag as the communications partner will be working with Adnodd on the design of the report and a draft will be presented to the Board in September.

It was noted that the new Terms of Reference for ARAC have been agreed and now include offering advice on finance and human resources matters.  The committee looked at the internal control work and the governance handbook.  These will be reviewed in the next ARAC to make sure these risks are being mitigated.

Welsh Government will be appointed as the internal auditor and Audit Wales as external auditor.

The risks associated with the establishment work will be integrated into the main corporate risk register. Discussion of the risk register will be moved to the top of the agenda for the next ARAC meeting.

It was noted that Adnodd should develop a ‘risk appetite statement’ to sit alongside the register to consider what level of risk is acceptable for different activities and outcomes.

Action: Adnodd to consider ideas for developing ‘risk appetite’ to discuss with ARAC in September

Next meeting 16/09/2024