Making the College's assets work for you

Published: 09/11/2023 | Author: Jonathan Brüün, CEO

This article was first published in the July 2023 edition of our membership magazine, the Bulletin

In my last update, I mentioned that the College has been addressing some financial challenges.  

We are committed through our current five-year plan to manage the College’s resources with care, and to ‘ensure the College is resourced and equipped to carry out its strategy: now and in the future’. One of our core values is being open and responsive, and in that spirit I am keen to share with you our current financial position, and what we are doing to improve it.

In late 2020, the College’s trustees recognised an emerging risk: our planned expenditure would repeatedly exceed our projected income for many years to come without immediate intervention, leading to a steady erosion of the College’s cash and assets. This risk had been compounded in the early stages of the COVID-19 pandemic, when large investments in digital services had been required to ensure delivery of the College’s core activities during the lockdown.

While end-of-year outturns were sometimes healthier than our budgets had predicted, our long-range financial forecasting was far less optimistic, and it was clear that action needed to be taken to address things proactively, before the risk became a reality.

Following a period of planning and review, the College’s trustees and executive staff instigated a Financial Recovery Plan (FRP) which set out a phased approach to cost control, cost recovery and the sourcing of new income. We first reviewed all College activities to see where we could make savings and identified a number of areas that could be delivered more efficiently, or where greater value could be obtained through negotiation of major contracts. 

We also confronted some very complex and sensitive issues, including the delivery of a new pay policy and pension scheme for staff that would help us control salary inflation at the College in the medium- to long-term. That process has now concluded and I am hugely grateful to the entire staff team for engaging in the pay policy consultation with such openness and understanding during what I know are difficult times for everyone’s personal finances. 

I’m pleased to report that, a year into the delivery of the FRP and while we are still carrying a deficit budget, we are substantially ahead of our recovery targets. We will work hard to ensure we hold the gains we have made so far, and deliver our goals in full in the coming months and years. 

In the meantime, the process of considering our financial position in such depth has inspired us to look again at the way the College utilises its assets on behalf of its membership and beneficiaries. 

We are very aware that the College’s assets include a significant amount of property which, whilst working well as a long-term investment, may not provide the best value for our members in the immediate term.  

The College is based at Churchill House in Holborn, Central London. Churchill House is an impressive building and an important focal point for members, but it is used infrequently by the majority of our members and, with the advent of hybrid working and events and online, remote delivery of written examinations, has less utility now than it did just a few years ago. The time is right for the College to consider if this asset is being appropriately utilised for its charitable purposes. To that end, trustees will be looking hard in the coming year at the use of Churchill House and the best way to build a College estate that is fit for the future in the service of its members and the specialty.

In the meantime, the staff team is making the most of hybrid working by condensing working space by 50%, and introducing hot-desking to create a busy and energetic place for staff to work and members to visit. This plan will also mean we can lease some of our remaining office space, which we hope will generate new income to the College – further supporting our FRP.  

The ultimate goal of the FRP is to ensure the College delivers a balanced operational budget with adequate additional funds to enable us to be innovative and progressive. We must not simply deliver profit without purpose – we must deliver a more equitable College.

As a membership body, roughly 57% of our overall income comes from membership subscriptions, 19% from examinations (all of which is ploughed back in to our exams), 10% from events, with the remaining 17% coming from other sources. You, our members, are directly funding a huge share of everything we do and, while that might be very reasonable given that we are a membership body, we have a duty to consider whether this is as balanced as it should be.

The issue with this model is that, in an age of rampant inflation, we find ourselves unable to protect members from the College’s rising costs. There is no buffer. The opportunities to invest in new services for our members or to make much needed improvements are limited by our lack of revenue generated from other activities. This is the next phase of the FRP: to seek to generate additional income from sources other than our membership, through fundraising, sponsorships, educational content and international outreach. 

The changes in our approach to the College’s finances and assets are aimed at creating that much needed financial buffer between what our members pay and our costs, and we are already starting to see the effect of some of this work. This year we will be able to propose to AGM that fee rises will be kept as low as possible, and that there will be a cap on membership subs for Anaesthetists in Training – holding them at the current rate. Our exam fees – on which we do not make a surplus – were due to rise by 7%, but we have been able to reduce this to 5% whilst still being able to invest in additional exams staff to ensure the delivery of secure, high-quality exams. This is a small step, admittedly, but in the right direction, and we hope that more steps will follow soon. 

I hope this article goes some way to explaining the depth of care and consideration taken by trustees and staff in the stewardship of the College’s assets, as we seek to make them work harder and smarter for you.