CEO Update August 2024
Dear Members,
This week marks an important milestone on a personal level as it is now six months since I took on the CEO role at the BMC. More importantly, it signals an historic moment for us, as four British Climbers are competing at the Paris Olympic Games.
My main focus for the first six months has been on bringing stability to the BMC and as we look ahead to what the next six months holds, I am pleased to share with you my second update including a summary of our six months (H1) accounts, continuing our commitment to transparent communication.
The first half of this year has presented us with significant financial challenges. Navigating these obstacles has been crucial to establishing a clear financial position. I am now confident we have achieved this clarity. We have had to make difficult decisions amidst rising costs and external pressures to ensure our long-term sustainability and ability to rebuild our reserves. This has also sadly meant the loss of several valuable and loyal members of the BMC staff team.
To support this, we have been implementing more robust financial processes and structures, providing a solid foundation for our future. The introduction of these changes is aimed at improving and simplifying financial systems and increasing transparency.
January - June 2024 Financial Summary
The first half of the year has been marked by intense scrutiny and refinement of our financial practices. We have managed to achieve a position of improved financial stability with a small surplus of £20.5k for the first six months. This is a positive step forward which we now need to build on. The external environment is changing, and we recognise the need to evolve and refocus on our core purpose: to support our members and community.
Surplus: £20,551.
Total income: £2.55 million (73% from BMC activities and the remaining 27% from grants).
Membership income: £1.38 million.
£771k is deferred income from prior year and £606k current year.
Individual membership is £1.1m and club is £272k.
Insurance income: £250,674.
Grant income: £700,502.
SE Systemic & Governing income: £182k. Talent: £99k – total funding £282k.
UK Sport income is £416k.
Partnership income: £34,000.
Cash position: remained strong at £1.7 million, ensuring liquidity and financial stability.
- Additionally, deferred income of £1.28 million provides a solid foundation for future financial planning.
Expenditure for the first half of the year was £2.53 million.
UK Sport GBC £343K includes expenditure in advance of Podium funding.
Sport England Systemic funding includes staffing and £67k paid to MTE, NICAS and MTUKI.
Total payroll cost is £929k.
£30k Staff Changes.
Sage Intact finance system cost over £7k YTD.
Back Office expenditure £990k, under budget by £65k.
Fixed assets amount to £230,080, while current assets totalled £2.64 million, including cash at bank, stock, and prepayments.
The BMC Headquarters building is re-valued between £800,000 and £1.3 million (up from £165k), not reflected in our reserves.
Our reserves total £237,509.
Actions and Impact
To keep you informed about our recent efforts, here’s an overview of the measures we've taken over the past few months.
Reduction Measures
Action | Impact |
Staffing Changes | Saving £345,000 (1/6/23 - 1/6/24) Ensuring we still deliver strategically identified goals and services. |
Closing ‘loss-making parts’ of the BMC online shop | Saving of £17,000 per year. Retaining lines fulfilled directly including Clothing and Maps/Books, and member services i.e. reciprocal rights cards. |
Reduction of outgoings and overheads | £150,000 savings Across the majority of BMC funded costs. We have protected the Access Conservation and Environment Budget despite these significant reductions to all other areas throughout the organisation’ |
Improved Grant management | Tighter controls and reporting including UK Sport Grant supporting a proportion of overheads associated with delivering the competition climbing programme |
Transitioning membership-related costs to digital platforms including | Reduction of £65k in Q3 By moving to digital Summit Magazine instead of a printed issue. |
Measures planned for the rest of the year
Action | Rationale and impact |
Transition to a new accounting system | Simplified and more fit-for-purpose. Better tracking of expenses, income, and budgeting, and regular reporting for informed decision-making. Additional savings of £10k+ pa. |
Separation of reporting of grant funding areas from other BMC funded areas | Providing clarity of position on grant funding and simplifying management of grants. |
Change to BMC’s financial year end Apr-Mar | Aligned with strategic partners which enables better cash flow management, adherence to funding conditions and simpler budget planning and reporting |
Introducing new purchase order system | Enhances the ability to monitor and manage expenditure. |
Insurance income is based on realistic sales at current margins for the full period | There was a disruption during the summer of 2023 due to a change of underwriters, which was resolved in Autumn 2023. This prudent projection reduced risk. |
Membership income projections conservatively profiled | Avoid repeating overly ambitious budgeted income assumptions. |
Review of our finance, audit and risk management | With valued support from expertise across the community we look to improve our oversight and governance across these key areas. |
Governance Action Plan | Working with partners at Sport England and UK Sport to deliver improvements in our governance and financial reporting in line with the Sports Governance Code. |
Looking ahead to the remainder of this financial year (to the end of March 2025) we are projecting to maintain a small surplus.
Priorities for the next six months
As we look ahead, we will be prioritising several key areas of work:
Membership updates: We are moving forward with proposed updates to our membership offer in 2025, ensuring we provide the right opportunities for involvement and support that reflect the diverse community that participates in our activities.
Access and Conservation: Our commitment to continuation of our core work and building our influence on issues that matter to you remains steadfast.
Olympic engagement: With the Olympics, we are excited about the increased profile of climbing on both national and global stages and the role we can play in welcoming new climbers into the community.
Sport and Community development: We will continue to build relationships across our diverse community and welcome interest from anyone who wishes to get involved. We will develop our engagement activity with clubs and working to build and support the development of new clubs.
Liability insurance premiums: In response to significant increases in our liability insurance premiums, we will be consulting with our members on the best way to navigate this challenge and set fees for 2025 by the end of September (in-line with our Articles).
Membership Combined Liability Insurance Premium increase
Liability insurance has been a central part of the BMC membership package for over 35 years providing assurance to clubs and individuals that Third Party Liability cover up to £15m is in place in the event of major accidents or claims against members and clubs. This is one of a number of insurance services we offer but is included with all our membership products and I cannot overstate the important role it plays in sustaining access and protecting participation in our activities.
Many clubs see this insurance cover as essential for them to continue operating as a club. The fact that all BMC members have liability insurance gives peace of mind to landowners, and this has underpinned many access agreements across England and Wales over the years; access to some sites is specifically dependent on this insurance.
Outside of our control and due to a significant claim in 2023, the costs of providing combined liability insurance has nearly doubled from £588k in 2023 to over £1.035m annually in 2025, representing an increase of over 75%, from £7.08 to £12.48 per member, in 2025.
Third Party Liability Premium | 2023 | 2024 | 2025 | |
£588,323 | £817,814 | £1,035,638 | ||
Per member cost (average) | £7.08 | £9.85 | £12.48 | |
Even with the organisation now in a more financially stable position, these additional insurance costs incurred in 2024 and 2025 can not be absorbed in the RPI (Retail Price Index) annual membership increase. While every effort is being made to explore mitigations to the cost of the premium, we will require one or more of these courses of action moving into 2025.
Reduce insurance cover.
Pass on the cost in an above RPI membership fee increase.
Significantly reduce the other activities of the BMC to reduce the cost base to compensate.
Reflections and looking forward
Reflecting on recent successes, we have much to celebrate, which includes, our work on Access and Conservation where Chris Boardman from Sport England recently shone a light on our Climate Project funded through the BMC Access and Conservation Trust, our involvement in the Paris Olympic Games and confirmation of the inclusion of Paraclimbing in LA2028.
We have welcomed the positive response from our community, and we wanted to take this opportunity to say thank you for your continued support. In the coming months, we look forward to seeing you at area meetings and the online forum on 11 September whilst keeping you updated on our progress through our online channels.
Dominic Oughton (BMC President) and I will, between us, be attending all of the forthcoming Area Meetings and will be happy to hear comments and answer questions on the content of this update.
Lastly, I hope you can all enjoy the rest of the summer whether it be climbing, hill walking or mountaineering and on behalf of the BMC I’d like to wish our Olympic Team all the very best for a great competition at the Olympic Games.
Warm regards,
Paul Ratcliffe - CEO