Board minutes

Board Meeting 21 July 2011

Open session

1. Apologies for Absence

   None.

2. Members’ Interests

   The Board noted the declarations of interest as stated in the Board’s Register of Interests.  It was agreed that there were no conflicts of interest arising from the declarations.

   The Chair offered formal congratulations to Sarah Lupton who had recently been made a Professor by Cardiff University.

   STANDING ITEMS

3. Minutes

   It was recommended that the Minutes of the Open Session held on 7 April 2011 be approved.

   Proposer: Colin Brock
   Seconder: Neil Watts

   The recommendation was agreed unanimously.

4. Matters arising

   There were no matters arising.

5. (Note:  Item 11 was taken at this point in the meeting, with Item 5 following) Chair’s Report

   The Chair reported that she would be meeting with Ruth Reed and Angela Brady, the outgoing and incoming Presidents of the RIBA, in the near future.  The Chair also stated that Angela Brady had offered her support to ARB’s Board in generally promoting the election scheme to architects.  

   It was noted that both Beatrice Fraenkel and Alison Carr had been invited to attend the inauguration of the new RIBA President.

6. Registrar’s Report

   The Board noted the Registrar’s report.  The Registrar additionally reported that she had attended the most recent RIBA Council Meeting.  She commented that RIBA Council members had expressed their appreciation of her attendance, and expressed support for the opportunities that the RIBA had to work jointly with ARB in a number of areas.

7. Management Accounts 2011

   Tony Robbins reported that, based on current forecast, expenditure would be under budget for 2011.  It was reported that a £44,000 profit had been taken on the sale of some index-linked gilts.  It was noted that as interest rates remain low a proportion of ARB’s working capital, which would normally be placed on deposit, was invested in index-linked gilts in an attempt to maximise ARB’s return on capital.

   Board members expressed their appreciation for the work of the Finance Manager in maximising returns and controlling ARB’s finances.  One Board member also expressed the view that ARB held reserves in excess of what was strictly necessary, and that excess reserves could be used to reduce the retention fee.

   The amount of reserves that should be held was queried.  The Registrar advised that current Board policy was that a minimum of four months of operating costs should be held in reserve, and that the level was currently five and a half months.  It was also noted that the fee level for 2012 and beyond would be discussed at the Board’s meeting in September 2011.

   Another Board member queried the reduction in expenditure on the misuse of title.  The Registrar explained that the majority of expenditure in this area arose from legal costs.  It was highlighted that there had been a change in emphasis and an attempt to do more work in-house, as well as less need to prosecute misuse of title cases.

   Other Board members noted that when ARB was fully staffed, this would impact on the running costs of the organisation.  Additionally, it was also advised that rent reviews would also have an impact on future running costs.

   The Registrar explained to the Board that expenditure was brought under budget through the efforts of staff.  Additionally, it was noted that the Deputy Registrar had successfully re-negotiated both the rent and service charge agreements.

   The Chair requested that a formal minute be made to recognise the efforts of ARB staff in keeping expenditure under budget.

   MATTERS FOR DECISION

8. Business Plan 2012

   The Board considered the draft Business Plan for 2012.

   One Board member raised a query in respect of Item 11 on p.32 of the 2012 Business Plan.  This item concerned the possible development of processes to deal with the prescription of UK qualifications offered by Institutions based outside of the UK.  The Registrar stated that work in this area had already started, and that it was a very large, difficult and complex issue to deal with.  The Registrar also reported that discussions in this area were being held with the RIBA, and that this was an issue that other relevant stakeholders had asked ARB to consider.

   It was asked whether any change in policy would necessitate a change to the Architects Act 1997.  It was noted that a change would not necessarily be needed.

   The Chair of the Prescription Committee stated that ARB would need to take legal advice to provide the Board with some protection if challenged on the existing policy. 

   It was suggested by one Board member that there may be a need to seek advice on what was happening elsewhere, and that care should be taken to ensure that any decision taken on overseas prescription did not have a negative impact upon standards.

   It was confirmed that the 1,250 new registrants identified under Item 1 were new registrants only, and did not include estimated new registrants less any estimated removals from the register.

   The Chair requested that any suggested amendments for the next draft of the 2012 Business Plan be forwarded to the Registrar.

   The Board agreed the first draft of the 2012 Business Plan.

9. ARB Strategic Policy

   The Board considered the existing strategic policy, established in July 2009, and agreed to retain the policy without change until its next review in 2012.

10. Review of the General Rules

    The Chair initially reported that the proposed changes to the General Rules would go out for consultation before any final decision was made. 

    It was suggested that an amendment be made to the wording of the proposed timetable in section 3.3 as 1 January will always be a New Year’s bank holiday. 

    Concerns were also raised over the timing of the final payment date, and it was asked whether there was a need to be more flexible given the time of year, and the fact that architects will be paying two lots of fees in one year for the first year of operation.  It was also felt that such action would need to have a demonstrable benefit for registrants.  One Board member felt that the cut-off date was too draconian, and asked whether there could be an interim period to bring in the new rule more gradually.

    It was noted that individuals were using the current three month payment period as a “free” registration period, and were resigning at the end of March to avoid paying the fee.  It was suggested that this could lead to inaccuracies in the Register during that period, and that to provide clarity for consumers there needed to be a clear cut-off period before the start of the calendar year as specified within the Act.  Reducing the fee payment period would help to keep the fee low, as issuing reminders to the profession is costly to ARB.

    One Board member observed that the rule change itself concerned the move from the current 90 day payment period to 60 days, with the remaining commentary referring to the management of fee collection.  The Board member commented that the proposed rule change was separate from the procedural changes.  The view was expressed that although ARB does not have to consult on procedural changes, this should be brought to architects’ attention and highlighted in the consultation documentation. 

    It was also asked what other statutory and regulatory bodies do in this regard.  It was confirmed that a benchmarking process had been carried out, and that all the regulatory bodies consulted required payment to be made before the due date.

    It was clarified to Board Members that about 42% of architects paid by direct debit.  This meant that the majority still paid by cheque and credit card despite encouragement to pay by direct debit. 

    There was some discussion by the Board as to whether the 60 day payment period should be reduced to 30 days.  It was suggested that this would be in line with standard business practice.  It was decided that a targeted question would be included in the consultation seeking views on whether 60 or 30 days would be preferred.

    The Deputy Registrar confirmed that there would be a consultation period of three months, and that the rule change would need to come back to the Board for a final decision.  It would be likely therefore that the rule change in respect of the change to the payment period would take effect from 2013.

    It was recommended that the Board agree to issue the changes to General Rules 11, 13a, 15, 16, 17, 18, 19, 22, 24, 24a, 25 and Schedule 2, as well as those which were considered by the Board at its meeting of 7 April 2011, for consultation.

    Proposer: Ruth Brennan
    Seconder: Agnes Grunwald-Spier

    The recommendation was agreed unanimously.

     

11. Annual Report on Investments and Review of ARB’s Investment Strategy

    This item was taken immediately following Item 4.

    A report was provided by James Malcolmson, ARB’s Investment Broker.  The Board was reminded that its requirements in respect of investments were for a low risk approach and for the preservation of capital.  Mr Malcolmson explained to the Board that while its holdings were as low risk as achievable within the remit, they could not be guaranteed to be risk-free.  The Board was also notified that since the last report 15 months ago, the return on investments was 13.2%, but that a figure on the return over the last 12 months could be provided if required.  Mr Malcolmson felt that this was a very good rate of return given the Board’s remit.

    One Board member commended both James Malcolmson and Tony Robbins for their work in this area, achieving such high returns at such low risk.  Mr Malcolmson responded by stating that the Board’s current strategy was “lower risk” rather than “low risk”, and that it would be unlikely that investments would achieve similar returns over the next 12 months.

    It was asked by a Board member whether ARB would continue to work on its investment strategy, and whether the Investment Broker had any other suggestions as to how it might be improved.  Mr Malcolmson responded by stating that this had been a good point to report to ARB’s Board, and that a 7-8% return on investments over the next 12 months could be considered a good return.  It was also suggested by Mr Malcolmson that, given the Board’s remit in this area, the current strategy was probably the most appropriate.  He also expressed his appreciation for the work of ARB’s Finance Manager, and the opportunity to work with ARB.

    The Chair noted that she hoped that there would be a sufficient handover period to allow the new Finance Manager to gain an understanding of the work being done.  It was also suggested that, given the current financial climate, the next report be provided by ARB’s Investment Manager in January of 2012 rather than waiting a full 12 months.  It was further suggested that an earlier report be provided to give guidance to new Board members joining the Board in 2012.

    The Board agreed to continue its current investment strategy of low risk and preservation of capital.

     

12. Changes to the Examination Procedures to transpose the new Parts 1 and 2 Criteria and additional low level enhancements.

    Teresa Graham gave an overview of the history of the project and explained the proposed changes.  As the Examination Procedures are rules of the Board, a consultation would be necessary before approving any proposed changes.  It was initially noted that the consultation period would last three months, with the aim that a final decision would be made by the Board at its meeting of 22 November 2011.

    A successful training day had been held with examiners for the prescribed examination to introduce the new criteria.  It was also explained that there would in the future be a change to the marking system.  The Registrar stated that any changes to the marking scheme would be unlikely to impact on the changes recommended within the paper presented.

    One Board member commented that the provision of feedback can be a difficult area to deal with.  While it would likely be more satisfactory for students, ARB could leave itself more open to challenge.  It was suggested that those giving feedback would need clear advice.  Teresa Graham responded by stating that feedback would be very controlled, and examiners would be trained to deal with it appropriately.

    One Board Member expressed the view that feedback from examiners should be disseminated.  The concern was also raised that the new criteria may be difficult to work with in an exam context, and may be being launched too early.

    In response, the Registrar commented that the paper was concerned with the Procedures themselves, and that these were suitably generic to allow the new Criteria to operate without making further changes.  The Registrar also stated that it was understood that considerable work needed to be done in incorporating the new Criteria into the Prescribed Examinations, and that the first exams using the new Criteria were unlikely to happen before July 2012.

    It was suggested that care needed to be taken over the wording within the paper.  It was agreed to clarify that “Criteria” in this context meant both the “General Criteria” and the “Attributes” at Part 1 and Part 2.

    A query was raised as to whether the language requirements set out in the Procedures were of a sufficiently high standard.  It was reported that the requirement set out within the paper had been benchmarked against schools and other regulatory bodies, and that the standard was high.  It was also clarified that the language requirement applied to UK nationals for whom English was not their first language.

    Concern was raised by one Board member that ARB was examining students; that this should be passed on to universities, and that outsourcing the examination should still be an objective of the Board.  The Chair of the Prescription Committee noted that outsourcing was not a viable option in the immediate future due to financial constraints.  It was also noted that the Prescribed Examinations were largely self-funding.

    Another Board Member expressed the view that the prescribed examination was a very robust process.  They also felt that the examination was not an educational process, but an assessment process.  The concern was also raised that outsourcing the exam, especially to universities, may lead to conflicts of interest.

    David Jones left the meeting at this point.

    It was recommended that the Board:

    1. approve the changes to the Examination Procedures transposing the new criteria and enhancements, as amended during the meeting, subject to final review and recommendations made by the Board’s solicitor on ensuring that Attributes and General Criteria were adequately referred to.
    2. consult on the changes with its stakeholders.

    Proposer: David Jones
    Seconder: Myra Kinghorn

    12 Board members voted for the recommendations, two Board Members voted against, and there was one abstention.

13. Board member, committee member, panel member and adviser attendance allowance and travel expenses.

    It was confirmed by the Registrar that the mileage for motorbikes would remain at its current level.  It was also noted that the reading allowance should be ‘£50 per hour’, rather than ‘£50 per day’ as stated in the paper.

    It was recommended that the Board agree that:

    1. no change be made to the daily attendance allowance of Board members, committee members, panel members and advisers for 2012; and
    2. there be an increase in the millage allowance for car travel from 40p per mile to 45p per mile in line with HMRC Approved Mileage Allowance Payments with immediate effect.

    Proposer: Ruth Brennan
    Seconder: Agnes Grunwald-Spier

    The recommendation was agreed unanimously.

     

14. Equality Scheme

    It was noted by the Board that the rewritten equality scheme took account of ARB being informed that it would not be listed under Schedule 19 of the Equality Act, and was therefore not subject to the specific duties required of those bodies listed under Schedule 19.

    It was queried how much membership of the Employers’ Forum on Disability cost, given that it had been rejected as being disproportionately expensive.  The Board was informed that membership fees were in the region of £3,000 per annum.

    Concerns were raised over the wording of the second sentence in paragraph 3.3.7 which stated:

    “Everyone should be treated fairly, but some people may be treated more fairly than others, as far as the discrimination laws allow.”

    The sentence intended to indicate that there may be a need to assist some characteristics more than others.  It was agreed, however, that because of the clarity of sentence one, sentence two (as shown above) could be removed without altering the meaning of the paragraph.

    One Board member asked why it was necessary to collect equality monitoring data for new entrants to the register.  The Registrar replied that this was the original plan and that a number of requests for data had been made which ARB had been unable to provide.  Another Board member commented that as data was being collected, it should be analysed in order to make its collection worthwhile.

    Frustration was expressed over the necessity to go through the exercise of drafting the scheme twice, and it was suggested that it would be a useful exercise to quantify the cost both in terms of the cost to ARB and the cost to registrants.  It was also noted that the current equality scheme would mean that fewer resources would go into delivering the equality scheme than under the previous arrangement.
    The Chair expressed the view that once the new Board members were in place it would be necessary to provide them with some context of the equality scheme and why it is of benefit to ARB.  The Board agreed that this should form part of its induction programme.

    It was recommended that the Board:

    1. notes and approves the revised equality scheme which identifies ARB’s responsibilities under the public sector equality duty, subject to the deletion of the second sentence in Section 3.3.7; and
    2. agrees to the issue the scheme for consultation for a three-month period.

    Proposer: Gordon Gibb
    Seconder: Peter Coe

    The recommendation was agreed unanimously.

    MATTERS FOR NOTE

15. Risk Register

    The Board noted the Risk Register.  It was reported that the Audit Committee had looked at the movements on the Register, and noted that the first two identified risks were the most important.  It was suggested that the risk of legal action arising from these two areas of risk may be uncontrollable.

     

16. Mid-Year Report on Statistics

    The Registrar reported that recommendations for the reconsideration of two complaint cases had been made through the Third Party Review process, but that these recommendations had not been implemented.  It was reported that the Investigations Committee had been satisfied with the process followed, but recognised that the text of the decision given would benefit from some amendment in future.  The concern was raised that the rejection of Third Party Review recommendations could call into question the robustness of the process.

     

17. Report on European Matters

    One Board member raised the concern that a number of individuals were coming onto the register from EU member states without needing to obtain a Part 3 qualification, and without having to meet any language requirements.  In response, the Registrar commented that a review of the Directive was currently being undertaken, and that questions had been asked within the Commission’s Green Paper consultation concerning language requirements.  It was noted that a detailed response to the consultation would be prepared and the Prescription Committee kept informed.  It was also noted that many EU states had a registration requirement similar to the UK’s Part 3, and that the proposed changes to the Directive may seek to level out the playing field in this respect.

18. Minutes

    The Board noted the minutes of:

    1. The Audit Committee meeting of 21 March 2011
    2. The Remuneration Committee meeting of 1 June 2011 (draft only)
    3. The Investigations Committee meeting of 13 June 2011.

19. Any Other Business

    There was no other business to report.

20. Dates of Next Meetings

    2011

    22 September: Board Meeting
    15 December: Board Meeting

    2012

    Friday 24 February: Board Meeting
    Tuesday 17 April: Board induction for new Board members
    Thursday 10 May: Board development and strategic planning day