Impact of Covid-19 on Association activities
The impact of Covid-19 on the Association has been significant and the following commentary summarises the key actions we have taken. It also provides an outline of the plans that will be implemented to ensure the Association continues to meet its charitable aims and objectives going forward, whilst remaining a going concern.
The Association, through many of its risk management policies and procedures, was prepared for the requirement to rapidly introduce the homeworking required under lockdown. A policy decision made some two years ago resulted in all staff having laptop technology instead of traditional desktop technology; additionally, office equipment including monitors, ergonomic chairs, printers and other aids have been relocated to staff homes. The successful transition to homeworking was completed within one day. The Association has produced a detailed homeworking risk assessment which all staff have completed; the few remaining resulting actions are being addressed as restrictions allow.
Daily Zoom meetings became and remain the norm. In April, the Association asked all staff to take eight days of annual leave. This action reduced forward holiday liability whilst enabling the whole staff to remain operational. This enabled planning and development of the Association’s response to the crisis. In May, we utilised the government’s furlough scheme for nine staff. In June we asked all staff to return to work (from home) for one week before we then furloughed seven staff. We anticipate continuing to utilise the furlough scheme going forward until more normal activity levels resume. July and August will see all staff returning to work, the majority on a part-time basis, with everyone still working from home. So successful has been the transition to homeworking we will be considering the possibility of embedding a flexible element of homeworking into our staff contracts at some future stage.
As we are sure you are aware, all non-digital training and event activities have been stopped. The ARB Show (May 2020) and Conference (September 2020) were cancelled. All members and partners have been fully refunded. Due to the contracts in place, and support from our partners, the negative cost impact of cancelling activity has been very small. However, the cessation of paid training and event activity will negatively impact our turnover. Whilst costs associated with the cancellation of these activities will not be incurred, a reduced contribution to Association overheads will arise. Given the reduction in income and contribution to overheads, the management of the Association’s cash became and remains a primary objective. An initial cash-flow forecast showed that, despite the Association building up reserves over the previous three years in line with the published reserves policy, the cash low point that occurs every November would require additional cash liquidity. This was briefed to trustees in April via Zoom meeting. The Association subsequently applied for an overdraft facility that was approved within 12 hours.
Over the following weeks we continued to develop and refine our cash-flow forecast; available cash is reported on every day at the staff team meeting. At the July Trustees meeting it was agreed that we would utilise the government’s Business Interruption Loan Scheme as an effective alternative to the overdraft option. The loan had been approved in principle by the bank and formal application has now been given Trustee approval. This loan will be repaid over a six-year term with no repayments being required for the first year. It is intended that the existing small mortgage will be repaid prior to the Business Loan repayments commencing in 2021. The new Business Loan repayments will equate to approximately the same value as the existing mortgage repayments. The Association has considerable equity via its ownership of the HQ Malthouse property. This could be utilised should further loan security provision be required, or the equity be released, through a future sale of the building.
The Association has been very responsive in providing member guidance, primarily through trying to make sense of the confused government messages. This guidance has been widely welcomed and, where requested, we have shared this information with various partner groups, including internationally.
Activity in certain areas remains extremely resilient with individual and scheme memberships continuing to grow via new applications: current indications are that this year both will be above the record levels of 2019. To achieve membership growth in the current climate is truly incredible; many other organisations are reporting double-digit attrition rates.
We cannot be complacent, and to ensure we continue to deliver member and public benefit we have adopted digital output as our new norm.
Our digital output continues to grow and develop. We delivered a Virtual ARB Show at no cost to our exhibitors and partners; this generated a record 19,000 website page views. Our investment in 2019 in Nimble, an e-learning platform, has resulted in fast-track course development, with our first e-learning course coming to market in June. Our free digital output is significant. We now have a monthly digital output calendar that invariably has some activity occurring every working day and even on some weekends. The overseas digital version of the ARB Magazine has recorded over 600 downloads as of June, increasing the Association’s reach internationally as a result. This international activity represents a significant opportunity in the medium and long term.
Having now managed the initial challenges associated with the Covid-19 crisis and with plans in place to restart activity in the coming months, the Association now turns to addressing the recovery plans which will be required for 2021 and beyond. Formulating this plan consists of two key stages, the first stage being the formation of a Business Recovery Plan 2021. Given the degree of uncertainty regarding the level of UK economic activity, the plan will be based on a range of different business scenarios, with accompanying forecasts, depicting varying levels of activity and income. These forecasts and plans will be used to stress test the Association’s activities to ensure its fiscal and operational resilience, whilst describing the actions required under each. As a result, the Trustees and senior Association staff will prepare and plan for a range of potential actions that may need to be taken during Q1 and Q2 of 2021. An outline of these plans will be briefed out to members regularly and as part of the 2020 AGM update, which will be held digitally via Zoom, with members voting electronically for the first time.
The second part of our recovery plan will be derived during Q2 and Q3 of 2021, once we understand in more detail the impact of Covid-19 upon our sector. This will result in the formation of the Association’s strategic plan for the period 2022 to 2024. It is intended that the new three-year strategic plan will be briefed out to members as part of the 2021 AGM. In summary, the Trustees, committees, working groups and the Association staff are considering and taking all necessary actions to ensure that the Association continues to deliver member benefit and meet its charitable aims and objectives whilst remaining a fiscally viable going concern.
Chief Executive Officer
This article was taken form Issue 190 Autumn 2020 of the ARB Magazine, which is available to view free to members by simply logging in to the website and viewing your profile area.