Fifty Third Meeting of Council

BRE Trust

Fifty third meeting of Council

held at

BRE Garston at 10:30am on 28 July 2010

DRAFT

Present: / In attendance:
Sir Neville Simms (Chairman) / Mr D Szyamanski
Professor J Burland / Dr M Wyatt
Mr M Clare / Mr R Heusch
Professor L Clark / Ms C Atkinson
Mr H Ferguson / Ms C Bott
Mr P Lobban / Mr C Watson (secretary)
Mr W R Treen
Mr J Wates

Welcome and apologies

James Wates was welcomed to his first meeting as Trustee. Carol Atkinson was welcomed as invited guest.
Apologies have been received from: Mr Callcutt, Mr Earnshaw, Mr Farrar, Mr Gillies and Mr Haryott.
Sir Neville Simms noted that John Callcutt’s current three year term finishes just before the next meeting of Council. He had proposed retiring in the past but had stayed on until now at the request of the Trustees. Sir Neville requested that the Trustees search for a suitable replacement and identify names of other potential Trustees.(see Item 13 Any Other Business)
2.Minutes of the fifty firstmeeting of Council held on 3 March 2010
The minutes were agreed and signed
3.Matters Arising
Sir Neville Simms reported that he had contacted Nick Raynsford regarding taking him to lunch to discuss NHBC Foundation however a suitable date had yet to be established.
Item 10. Guy Hammersley will be reporting on BRE Ventures at the next meeting of Council on 3 November. Professor Burland noted that the RAE award that the Tri-Air team should apply for is the MacRobertAward which recognises innovative ideas in engineering.

Report of the Finance and Audit Committee

Ray Treen reported that there had been two meetings of the FAC since the last meeting of Council. The first was a meeting between FAC and the auditors on 9 July. During that meeting he had had a brief meeting with the auditors alone and there were no matters arising.
The second meeting held immediately before the meeting of Council was to confirm that there were no final changes on accounts and review the first quarter’s figures.
Accounts
P&L was as predicted during the year.
Page 20 is a consolidated statement reflecting actuarial losses and a revised valuation of land showing an asset value substantially down from the previous year to a more tenuous figure of £5M. The land valuation date coincided with the bottom of the market and it is thought the value will improve. It may be worth paying for a revised valuation in the coming year, and it would keep the Trustees up to date with any movements in asset value.
The pension fund shows a loss (or increase in liabilities) of £8.5m based on FRS17 – a mechanistic valuation. BRE Group assumptions are slightly on the less prudent side of average but have been supported by both Actuaries. As a balancing factor the auditors consider that BRE Group is prudent on mortality assumptions.
Ray Treen advised that this is a highly volatile situation – a lower discount rate increases liabilities. It is a difficult issue for many companies. Management is working to further control the pension deficit. Pension liability is a long term issue and it is important not to over-commit today and thus restrict room for manoeuvre.
Sir Neville Simms noted that the business is in good shape and trading as it should be. There is a concern if land value declines. It was noted that if the business goes into negative assets, some bodies will not award work and others are fine as they discount the pension deficit.

BRE Trust’s Financial Statements 2009/2010

Russell Heusch commented that BRE group is performing better this year(and is continuing to improve). The audit went more smoothly with fewer issues raised. Value of land follows accounting rules which excludes development value and that BRE is a tenant.
Mark Clare queried whether it was possible to realise value for some land now so as to create higher value for the remaining land. Martin Wyatt confirmed that this was being considered and that he may wish to re-convene the Trust Site Development Committee in the medium term.
It was noted that all but £250,000of the capital contribution of £288,000 in 09-10to Tri-Air was actually in the form of loan notes at a high rate of interest.
The Trustees agreed to accept the accounts for Sir Neville Simms to sign and present them to the AGM following this meeting.

Appointment of Auditors for 2010/11

The BRE Trust approved the appointment of KPMG as auditors for 2010/11 but noted that BRE group would be seeking to enhance their service.

BRE Group Chairman’s report

Martin Wyatt reported that BRE group were ahead of plan in the first quarter of 2010/11 with cashflow holding up well. Work is still being won from central government but not from quangos (about 5% of business). Carbon, energy and refurbishment are still high on the agenda. ‘Green New Deal’ see BRE as part of their core discussions with DECC. Against that, a lot of work for BREEAM for schools and hospitals is now not going to happen and BRE Global is focussing on other areas.
A 12.5 year recovery plan for the pension deficit has been accepted by the Regulator.
The bank has agreed to waive all covenants for three months so that agreements can be reached with Pension Trustees. Trustees want access to land valuations which PPF require every 18 months. The cost of the letter of credit (£100Kpa) will be put into the scheme once it has been exchanged for a charge over the land.
The single page explanation of accounts circulated with the papers was regarded by the Trustees as helpful.

BRE Trust Research Report

Chris Watson referred to BRE Trust Council 10(15) which (as the last report) highlights the outcomes of BRE Trust funded projects.
BRE Trust Research Conference – 1 June 2010
This is one of three BRE Trust events which took place in the eight weeks prior to the meeting. Feedback from the invited audience was good. Due to the high quality of some of the research being carried out it was suggested that it was a missed opportunity and that the conference should be one of the properly advertised mainstream conferences run by the events team. A larger audience should be invited to include those who had influence in defining standards and legislation.
Carol Atkinson explained that the Governing Body are keen to attend Trust events to find out more aboutits research and with the recent changes in governance of standards this would be even more relevant. She asked if it would be possible for members of the Governing Body to attend Trust research events and it was generally agreed that this would be acceptable. She asked if the Trustevents could be timetabled sufficiently in advance so that meetings of theGoverning body could be scheduled for the same dates.
Professor Les Clark noted that presentations by UCE PhD students had been excellent but those from BRE group staff were mixed. He agreed that a broader audience would provide an important impetus to improve.
The Secretary to report to Council on proposals for the future of the BRE Trust Research Conference in November.
BRETrustUniversity Centre of Excellence mid-year meeting – 14 June 2010
Emphasis was placed on the need for the Universities to apply for EPSRC funding for PhD students to demonstrate to EPSRC that BRE would a valuable partner for them.
Yacine Rezgui from CardiffUniversity presented an opportunity for all the University Centres to work together in a combined bid for EPSRC funding to investigate Building Adaptability. The opportunity to collaborate was well received by all and it is hoped that this will encourage more of the same.
BRE Trust PhD Student Conference at Bath – I-2 July 2010
Richard Haryott and Prof Les Clark attended and each gave closing remarks on the second day.
Prof Les Clark reported that the presentations were excellent and a number of cross over technologies were identified. He noted that the PhD students had mixed welland had benefited from the conference but was concerned that only three of the five chairs supported by BRE Trust were present.
Managed Research Programme
The unusually low percentage of completed outputs were nearly all associated with two projects. The BRE Trust research management team confirmed that they demanded the same standards and reasons behind requests for changes as those that would be accepted by an external client.

BRETrustUniversity Centres of Excellence Contracts

Professor John Burland referred to paper BRETrustCouncil(10)16 noting that he had looked at copies of the marked up contracts as well.
The main issue is identification and ownership of Intellectual property balanced against the need of the PhD student to publish their work. The approach is for the supervisors and the student to review IP regularly throughout whole project from the first year – the student being guided through process. The contracts deal with the issue sensibly and ensure commercial exploitation opportunities for BRE are protected (or the University if this is more appropriate).
Other issues are VAT and case law. Professor John Burland is satisfied with revised wording of the contracts which are to be with BRE Trust. (In the past they were with BRE)
Discussion took place on the period of contract. The proposal is for a five year contract with a review of whether to continue or break by either side at year four. There is a need for a formal review (to be written into the contract) and a review mechanism for Trustees – (possibly to be a responsibility of the Research Committee). A three year rolling programme was effectively an agreement in perpetuity which would not be desirable. It was agreed that should a one year notice to break be given funding would continue to be provided to allow BRE Trust funded students to complete their doctorates.

BRE Trust Publications report

Chris Watson referred to the report BRETrustCouncil(10)17
Hugh Ferguson noted that publications expenditure is behind plan but this reflects the low cost of producing the essay plans which is the bulk of the work at this time of year. Progress is good.
Hugh Ferguson reported that the relationship with IHS BRE Press is good at site level and operationally it works well but is concerned that contractually the arrangement is one sided and unfair to the advantage of IHS and is unbreakable. BRE does not appear to be receiving royalties on bulk or electronic sales. BRE Trust Secretary is seeking clarification on the royalty arrangements and will report back to the Trustees.

Governance Review

Sir Neville Simms commented that Chris Earnshaw and David Szymanski have prepared a good review of governance and requested that it be issued to all Trustees immediately after this meeting. He has made a few comments, for example: who would have authority to sign off a £50K contract for work on an aeroplane (liability could be enormous)?; and currently BRE Trust effectively chairs the FAC which reports to the Trustees, but should the Finance Director present the financial position to the Trustees who should oversee but not manage. Comments from the Trustees should be returned to Sir Neville by 10 September at the latest so that these can be taken on board and cleared at the meeting of Council on 3 November.

Chief Scientist and BRE Fellows

Professor John Burland spoke to RAE having identified two possible candidates and had a one hour discussion based on Les Clark’s report with Professor John Pethwicker – Prof Physics Dublin, member of the Royal Society and Chief Scientific Advisor for MPL. He endorsed the report and made some further suggestions. He strongly advised that the Chief Scientist should be aninternal appointment and not visiting appointment and that they would have a major role to play in the scientific career of individuals and future leaders. He would have a role in breaking down silos (noting parallels between MPL and BRE). Research Fellows would be very helpful. He preferred the title of ‘Chief Scientific Advisor’.
Prof Burland has taken the opportunity to approach an excellent candidate (not naming at the moment) who held a senior role in a commercial organisation then moved to academia 5 years ago. He is influential, his field is sustainability and he is very interested. Prof Burland has passed the details toMartin Wyatt to follow up. Sir Neville Simms requested his biography with a statement on how he would manage the role.
Martin Wyatt circulated for information and comment a ‘Draft notes/specification’ produced by Carol Atkinson re: purpose and roles for BRE Trust Fellows’ which is a summary of current progress together with suggestions of possible names and areas of expertise. Suggestions for Trust Fellows from Trustees would be most welcome.

Any other business

Martin Wyatt has been in discussions with a small charity called Upkeep – a network of facility managers for charities. They train people for social housing sector and they have a display demonstrating poor workmanship and bad practice. They are on the verge of bankruptcy and the proposal is that BRE takes over their work which could be run profitably at Garston. It would offer services to other charities. There is no real risk and BRE Group Board support it.
Martin Wyatt reported that external parties are providing grants to BRE Trust – St Austell Eco Town has given a gift to the Trust of £250K to ensure that the ecotown meets expectations.
Sir Neville Simms noted that the number of Trustees is down and that three or four new Trustees are needed from a range of disciplines for example Developers, Insurers, and Professionals.Suggestions include a Chief Engineer from the Military; Sir Ken Knight – HM Chief Inspector of the Fire Service; Chief Executive of Halma, a manufacturer. It would be helpful to have someone with energy/sustainability background and consider a CE of a major (non-UK) European property company. Suggestions should be e-mailed to the Secretary with biographies.
Sir Neville Simms requested a meeting of the BRE Trust business development committee in September and would advise on his availability.
Sir Neville closed the meeting, commenting that it had been a tough year. He thanked BRE Group for their efforts and the resulting healthy gift aid contribution to the BRE Trust.
Sir Neville Simms / Action: Sir Neville Simms
Action: Guy Hammersley
Action: Russell Heusch
Action: Secretary
Action: Secretary
Action: Secretary
Action: All
Action: Martin Wyatt
Action: All
Action: Sir Neville Simms