Adjectives like 'unprecedented', 'challenging' and 'catastrophic' are routinely and appropriately being used to describe these times. As the world continues to teeter from COVID recovery to new spikes, the lives of so many across the world will have been so adversely affected, that many changes will not be reversed.
As we try to make operational and strategic decisions, it is important for us to ascertain the financial impact and potential longevity of the current pandemic. The UK economy is unlikely to reach pre- COVID level until early 2023. As a result, not every business or charity will survive the financial impact of the coronavirus. Across the British Union Conference (BUC), all the institutional treasury departments have been working tirelessly, to ensure data is efficiently and accurately processed to help leaders make "informed" decisions.
BUC Tithe − For the seven months to July 2020 we have seen a tithe return of £11.7m, which is a £2.03m (14.8%) fall in tithe across the BUC fields. We are expecting the overall tithe return for 2020 to further weaken as we reach year-end. At the end of July, we were £217,799 below budget. The Welsh and Scottish Missions reflect positive increases during difficult financial times. Whether we see a positive or negative figure, we continue to affirm our covenant with God.
Working Capital and Liquidity − Because of our restricted operations and furloughing of staff, our costs have been contained for now, maintaining working capital 113%. However, as expected liquidity has fallen to 81%, due to the erosion of cash held. Without the Government's Job Retention Scheme (JRS), grants and the pension fund support, our liquidity would have been far worse. The Conferences have similarly been able to access the JRS and are able to use the Gift Aid income to sustain their operations at this time.
Expenditure − Our current expenditure is prioritised to 'just essentials', virtual programmes and evangelism (where this can still safely be undertaken). Employment costs are within budget with the greatest saving of all, travel down £50,873 as expected. Departmental expenditure is underutilised by £162,969. Office support expenditure is down by £17,013 due to the office closure, but insurance and maintenance costs are as budgeted, ensuring our properties are continually maintained. Overall, we are showing a deficit for the seven months to 31 July 2020 of £235,601. Once the JRS ends, we expect the December accounts to see a net cash decrease of about £33,000.
Coronavirus Financial Impact
Most of our sister organisations continue to experience financial challenges during this period.
- ADRA – Due to the combining of the Foreign Office with DFID (UK AID), grant applications face greater challenge, with the added factor of Brexit on the horizon.
- The Pension Fund − The latest valuation from the actuaries indicated a decreasing deficit of £17 million which is now scheduled to be paid by 2028, with the Covid-19 pandemic adding two years to the conclusion of the pension fund deficit resolution from our previous valuation.
- The Stanborough Press – The Press continues to operate in financially challenging times with the loss of its main revenue streams. It has taken the difficult decision to make redundancies, place other staff on reduced hours (and salary) and cut costs where possible.
- Stanborough Primary School −The new school year commenced with 17 less pupils than the previous year, resulting in an income loss of £139,000 when compared with the previous year. The effects of the coronavirus, and the ability of school life to function continue to cause apprehension. To ensure the school's future survival, a process has begun to make substantial staffing reductions to counter the huge fall in income.
- Stanborough Secondary School −Covid-19 has had a critical impact on the school's finances. The loss of the lucrative overseas student market, coupled with a reduction in local boarders to four students, has highlighted the costs of the School of English and the boarding school staff to the overall school. As with the primary school, a process has begun to reduce staff in all areas of the school, with the aim of rebalancing the budget to viability and sustainability.
Conclusion − Lessons from a crisis: Economic recovery from Covid-19 could take years, but business is already showing that innovation, determination and kindness are key. In all of this, we have had to do many things differently, finding new, innovative and creative ways to reach out to our members and support the work that God has entrusted to all of us. Friends, let us stay focused on our mission and task that God has commissioned us to do.