Sir Michael Bichard (Chair), Bonnie Dean, Joe Ferry, Jonathan Kestenbaum, Geoff Kirk, Alan Livingston, Jeremy Myerson, Eddie Obeng, Martin Temple, Sophie Thomas, Peter Williams, Chris Wise. Observers: David Kester (Design Council), Wendy Lanchin (Design Council), David Godber (Design Council), Kim Davids (Design Council), Charlie Ho (Design Council), Marianne Guldbrandsen (Design Council), Robert Bult (Design Council), Jane Hartshorne (DIUS)
Richard Williams, Jonathan Sands, Janet Walker, Sebastian Conran, Chris Hewitt
01 Welcome, apologies and declaration of interests
The Chairman opened the meeting and welcomed the new Council Members: Sophie Thomas, Joe Ferry, Alan Livingston, Jeremy Myerson, Eddie Obeng and Martin Temple.
No conflicts of interest were declared.
02 Minutes from the last meeting on 4 December
The minutes of the meeting on 4 December were approved. There were no matters arising.
03 Quarter three review
Chief Executive’s update
The Chief Executive provided an overview of activities and progress since the quarter three review was completed in January. This included the following points, which are listed by the five areas in The Good Design Plan:
Business and public service innovation
- Designing Demand: following the review of the programme, we are discussing partnership opportunities with the Manufacturing Advisory Service (MAS). The South East of England Development Agency (SEEDA) has renewed its contract, including our high growth services – Immerse and Innovate. We are also planning joint promotions with the government departments for Business, Enterprise and Regulatory Reform (BERR) and Innovation, Universities and Skills (DIUS).
- Sustainable Water project: a workshop was held with the senior team of a water utility company as part of the scoping phase of the project.
- Design Bugs Out: the prototypes from the manufacturing and design teams are near completion. These prototype solutions will help healthcare staff to manage the hospital environment and improve infection prevention and control will be displayed across the UK from April in a hospitals roadshow.
- Designing Out Crime: The Technology Strategy Board is supporting a competition to design prototype solutions to ‘hot product’ crime.
Public and community engagement
- Dott Cornwall: Cornwall County Council has committed its £300k contribution for 2008-09. The South West Regional Development Agency (SWRDA) and European Regional Development Funding (ERDF) will be confirmed in April. Recruitment for key Dott positions is underway. Council member Alan Livingston is Chairing Dott Cornwall.
Design skills development
- Skills Alliance: the multidisciplinary network held its first meeting. Funds have been agreed with the Arts Council for schools work, and a pilot with six designers for an advanced leadership scheme with Ashridge starts in March.
Design policy and promotion
- Events: we held a procurement event at No.11 Downing Street and a design and innovation dinner with key stakeholders in the South West of England.
- Research and communication: the e-bulletin on designing out recession received coverage on over 50 websites. We are validating the Cambridge University “international design scoreboard” research prior to launch in quarter one 2009-10.
Organisation & Operation
- The sublet tenancy agreement has been signed, the architects have been appointed and the refurbishment is underway.
- We are recruiting a new Finance & Commercial Director.
- The internal auditors have completed a validation of the quarter three financial forecast.
Balanced scorecard
Council reviewed the balanced scorecard. There were no matters arising.
Financial review
The Chief Executive provided an overview of the management accounts. A full re-forecast was undertaken in December and was validated by Baker Tilly internal auditors. The current position shows a deficit of £193k and the Executive Board is confident that this deficit will be reduced by the end of the financial year.
Risk review
Council reviewed the quarter three strategic risks. There were no matters arising.
The following points were highlighted during a discussion of the quarter three review:
- Council asked what provision has been made for the oversight of financial matters in the period before the new Finance & Commercial Director is appointed. The Chief Executive responded that he is acting as the Chief Finance Officer and he has established a Finance Working Group as a temporary subcommittee of the Executive Board, which meets weekly to review finance and audit matters. Baker Tilly recently audited financial management processes, the forecast for 2008-09 and the initial budgeting process for 2009-10, with positive results. Council also noted that the new Head of Finance is an experienced qualified accountant.
- Council asked whether the reduction in the deficit since December 2008 was due to any major policy changes. The Chief Executive responded that the reduction was mainly through phasing projects and no substantial policy changes have been made.
04 Design in a recession
The Deputy Chief Executive introduced a session covering the implications of recent political and economic events on our three year strategy, The Good Design Plan. Following a short presentation, Council raised the following points:
- Council suggested that the organisation takes a long-term approach and promotes design’s value in supporting business, public services and design companies to survive a financial downturn and in being prepared for the next economic wave. A key message is to now invest in innovation to enable sustained efficiency and added-value.
- Council agreed that this is an opportunity to communicate design’s role in differentiating companies’ offers in the market and in improving business competitiveness.
- Council recognised that social enterprises, ‘eco-preneurs’ and sustainable design are key growth areas during this period.
- Council urged the organisation to continue to support and provide skills development to design companies and especially smaller enterprises during this period.
The Deputy Chief Executive concluded the discussion by requesting that members continue to contribute their ideas on this topic.
05 Operational Plan 2009-10
The Chief Executive gave a presentation on the strategic and financial assumptions for the 2009-10 operational plan. Key points are referenced below:
In terms of the Good Design Plan three-year strategy, the organisation will:
- Set minor course corrections.
- Emphasise design’s role innovating out of a downturn.
- Seek to lead a coordinated national response around design.
- Maintain growth through externally funded projects.
- Create powerful evidence and advocacy for the upcoming government Comprehensive Spending Review (CSR).
The budget priorities will be set as follows:
- The baseline income has been set at approximately £10million, including +£3.5million of enterprise funding.
- DIUS grant-in-aid funded core staff costs will stay at 2008-09 levels of approximately £3.25million.
- Building costs are being held at approximately £1.3million.
- Total programme budget will be £5million compared to £4million 2008-09.
- Unrestricted reserves will be maintained at around £500k equivalent to one month of fixed costs.
- It will be a tight budget but we will fund growth in highly targeted areas.
- Keep it simple – focus with no mission creep.
- Drive forward the enterprise model—fund new posts from projects.
- Safeguard staff skills development.
- New external projects should make a contribution.
- Cut don’t pare with simple selection criteria including: economic alignment, impact in depth and speed and financial return on investment.
Programme priorities are on:
- Rightsizing Designing Demand costs to income
- Increasing investment in Designing Demand diversification within public services and technology transfer projects
- Assuring net contribution to overheads from Design Demonstrations
- Supporting Dott Cornwall
- Targeting Design Skills investment on three “low-hanging fruit” projects
- Maintaining budget for sustainability promotions
- Restoring investment in core research and evidence base
- Increasing design promotion investment.
The Council was asked to approve the draft budget in advance of signing off the operational plan at its next meeting on 26 March. The following points were highlighted in discussion:
- Council asked whether there is a risk in the organisation successfully attracting significant enterprise funding, and DIUS reducing its grant in aid investment accordingly. DIUS responded that the Design Council’s grant in aid allocation has been approved by the Treasury for the current CSR period, ie until March 2011. However, given the pressure on public resources there is an element of risk that grant in aid allocations could change.
- Council advised that the organisation plans for a possible change in administration and builds its reputation and contacts within the Conservative Party. The Chairman responded that as an apolitical body, the Government Relations Team has been building relationships and cross-party support for the value of design.
- Council asked whether the organisation’s systems and skills are able to accommodate the planned enterprise growth next year. The Chief Executive responded that we have a good project methodology and that the staff and structures have been put in place this year.
- Council asked for confirmation that the baseline ‘minus’ scenario still includes the organisation’s core activity. The Chief Executive confirmed that this is the case.
Following the discussion, the Council approved the financial and strategic assumptions for the 2009-10 operational plan.
06 aob
Council gave its agreement to release reserves to fund a new telephony system outright at a cost of £46k, making a saving of £16k if the system is leased over a five year period.
The Chairman concluded the meeting.