At the end of my first year as Treasurer, it was very satisfying to sign off the 2018/19 accounts confirming that the College had had a very good year.
The main income streams of exams and membership were doing well, with total income of £17.9 million exceeding budget by £0.6 million. Expenditure of £16.7 million was £0.6 million below budget, in part due to efficiencies. A surplus of approximately £1.2m was generated and set aside for a range of new initiatives, including the recruitment and careers campaign and improved IT infrastructure.
And then we were faced with COVID-19
The financial impact on the College was significant with a forecast income reduction of £3.4 million as a result of cancelled exams, conference, educational events and invited reviews.
The College, however, was very quick to respond to the financial challenge. Clinical exams overseas and the annual conference were cancelled early to avoid committing to further expense. The College building was closed, staff moved to work remotely and all face-to-face activity cancelled. All College meetings and committees went online. Any non-essential expenditure was stopped, some projects were put on hold and some staff furloughed.
Through this, savings of £2.3 million against budget was forecast, and initially a deficit of £1.1 million was predicted. Had the College not reacted so swiftly to the situation, this deficit could have been considerably higher. The Board of Trustees met in April and agreed to use College reserves (£1m) and designated funds (£0.9m) to cover the deficit. In fact, stronger than expected membership income and continued savings since then have further reduced the 2019/20 deficit – currently predicted as £0.8 million.
For 2020/21, the College will focus on resetting priorities, restoring business as usual and recovering sustainably. A budget has been approved by the Board of Trustees, which aims to deliver a surplus of £0.8 million to replenish College reserves.
This will ensure a solid platform for the College to embrace new ways of working, investing in technology to support exams, training, and facilitate events if attendance in person is not possible. We anticipate this will offer enhanced benefits to members. Moving to most meetings being held virtually may make it easier for members to participate in committees and working groups, whilst at the same time leading to considerable cost savings on travel and reducing our carbon footprint.
However, the environment remains very challenging with considerable risk associated with some of the assumptions in the budget because of the uncertainty associated with COVID-19, eg what will happen if we cannot open up exams as quickly as we hope.
In January 2020, before the current financial challenges, we had frozen our membership fees for most members whilst reducing fees for post-MRCPCH trainees as part of a commitment to rebalance our fee structure to be fairer. We remain committed to achieving this rebalancing when possible but given the financial pressures, for 2021 we are proposing a 2% fee increase for all members in January.
I took the opportunity to pen this this blog to help you understand our financial position and the considerable financial pressure as a result of COVID-19. The past few months have been difficult but we should all appreciate and applaud the College staff whose actions have led to us being much less adversely affected than we could have been. I hope that you will all be able to continue to support the College through this challenging time, and on the road to recovery.
If you would like to give any feedback or have any questions, please email me via the Membership Team at firstname.lastname@example.org