Finance

1. Does the finance dimension look at the whole organisation or just that part funded by the LSC?

The Financial Health key performance area looks at the whole organisation for all providers to which it applies. Financial Management and Control and Performance Indicators 4 and 5 within Use of Resources in the case of colleges also apply to the whole organisation. In other respects however, the finance dimension is primarily concerned with LSC funded provision.

2. Will the impact of a capital project on Financial Health be well enough offset by Use of Resources scores?

It is normally the case that a college’s financial health is weakened, to an extent, in the short to medium term as a consequence of entering into a major capital transaction. Both Corporations and LSC teams consider this carefully at the time a project proposal is presented. In response to comments on this matter a capital uplift moderation has been developed within the key Financial Health key performance area to address the most significant impacts. The capital Performance Indicator within Use of Resources provides a separate assessment of the condition and renewal of colleges’ estates. The overall grade for the finance dimension will take both Financial Health and Use of Resources capital into account.

3 Does Capital Build moderation also apply to private providers undertaking the same kind of expansion (planned spend)?

The Provider Guide sets out a capital uplift moderation which is only relevant to colleges at present. The 10 year financial plans provided by colleges in support of their capital projects will form the reference point for this uplift. Other providers do not submit similar information. Weightings and Overall Performance Ratings (OPRs)