Following the recent restructure there have been a number of questions raised by our members, we sat down with Paul Davies, CEO, this afternoon and asked him these questions on your behalf.

FINANCE

Q. The BMC AGM took place on 17th June with no reports of financial problems yet only 20 days later, all the access, marketing and communications staff were issued with ‘at risk of redundancy’ notices. Why weren’t the financial problems disclosed at the AGM?

We have been through a long process, that started in May, to ensure that our revenue and expenditure remains aligned now and for the future.

We had built course corrections into the budget planning for this year, knowing that we had set ambitious targets and we needed the ability to course correct easily if we weren’t hitting those targets.

As we continued to monitor membership and other revenue it became clear that we would need to take more significant action to make sure that our outgoings were not outstripping what we were bringing in. We spent a long time reviewing our forecast and looking back through the previous few years and it was clear that we would need to reduce our base costs to make sure that we didn’t find ourselves in this position again in the future.

The AGM was predominantly to discuss 2022, and at that time we were still optimistic that we could manage the projected shortfall through the course corrections that we had identified - the operational spend planned in the year. We did not confirm the need to take more radical action until the end of June, when it became clear that current base costs were not sustainable, and we moved quickly to implement the process that we have just been through.

Q. On what assumptions were the projections of income made?

Our forecasts for 2023 were based on increasing income from Membership, BMC Travel Cover sales, and income from Commercial Partners. We had already secured additional funding from the Sports Councils to support our work in indoor climbing and in competition, both at the grassroots and participation level and for the talent pathway and elite.

Our membership target of 100,000 has been a long-standing public ambition. We were ambitious with our growth target and put a number of work streams in place to support this growth, including across our website and digital services and membership structure. Unfortunately, it has become clear that more significant foundation work was going to be required in our aging systems and processes. And our research into our product/service offer – what we offer our members and wider community – highlighted that we had further to go than we first thought in terms of whether the members of our community of climbers, hill walkers and mountaineers actually knew who we were. This has resulted in more background work being needed than we had anticipated, but we will see some positive changes over the next 12 months.

Q. Did you not think that this might happen?

As with many other organisations and businesses, we were hoping for a bounce back from Covid and also that the projections, from people like the Bank of England and the Office for Budget Responsibility (OBR), for a short-lived inflation peak and rapid return to normal would come to fruition. Unfortunately, we are not there.

We are continuing to see the cost of living impacting our members and the challenging commercial environment that it creates impact upon our partners, many of whom have had to dramatically reduce their budgets.

All of this, unfortunately, adds up to a lower-than-expected income.

MEMBERSHIP GROWTH

Q. Were the membership growth targets realistic?

In late 2021 we set ourselves the target of growing the BMC to 100,000 engaged members, by the end of 2024. I mentioned during my CEO’s Presentation at the 2021 AGM, that interest and participation in Climbing, Hill Walking and Mountaineering were all growing, and if we were to continue to claim our position as the representative body for this community, we should challenge ourselves to ensuring that our membership should grow in proportion to participation.

We had originally set ourselves the target of 91k members by the end of 2023 and we had based this figure on modelling the increases that would be needed across our different membership categories if we were to achieve this. It is an ambitious target but based on the modelling I believe an achievable one; perhaps the timeframe that we set ourselves – December 2024 – was too ambitious, but I believe that we can get there, even if it takes a little longer than hoped. If the Ramblers and RYA (sailing) can achieve this, then so can we.

Q. Have the projections altered in light of recent and semi-recent trends etc

We have reduced our forecast for membership and commercial income (travel cover sales, shop and commercial partnerships), reducing our base-cost and the course corrections brings us back in to line with our expected end of year position.

We will obviously continue monitor our financial performance, something that we do as a matter of course each month, and respond accordingly.

Q. Why did BMC spend £90k on hosting the world cup at Ratho (in Sept 2022)?

The original budget for this event was £52k, there was an overspend against this original budget, but this was agreed with the board as we progressed through the project. Unfortunately, we did not secure the support from UK Sport that we had hoped for, the capacity of Ratho limited the number of tickets we could sell and therefore income from tickets was not what we had hoped for, and the support from the IFSC that we had expected did not appear. However, the board made it clear that if we were to deliver this event that we should do it well and that we should use it as a statement of intent and to demonstrate what the BMC is able to deliver - we certainly did that and we are very proud of our achievements.

I should mention that we only overspent against the original world cup budget knowing that we would still be able to deliver it within the overall budget for 2022.

The event was a great success, for the athletes, the spectators and the staff and volunteers that made it happen. We have seen numerous benefits, too many to mention, but for me there are a few that should be highlighted:

International and domestic relations: We hosted key stakeholders from Sport and Recreation Alliance, Mountaineering Scotland, ABC, NICAS, PYB as well as the UK Sport events team.

Sponsor relations: The event generated significant commercial partner investment from existing partners and also allowed development of relationships. Many of our partners are big supporters of competition climbing, the team and the sport.

GB Team performance development: Hosting the event on home soil allowed full GBC squad participation, giving experience of elite competition to junior members of the squad and ‘home’ advantage for senior athletes (Toby Roberts, bronze, lead).

While the above are all significant benefits, and there may not be appetite for the same level of BMC investment in the future, it is worth noting that UK Sport were not able to contribute funding on this occasion – due to the short notice and criteria – but they could be a key partner if we were to bid to host another World Cup or, say a World Championships. Being able to demonstrate to them, and to the IFSC, that we are capable of delivering a World Class event will stand us in good stead for the future.

Q. Is money being taken out of Access (ACES) to fund GB Climbing?

Quite simply, no.

There seems to be a lot of confusion around what GB Climbing is and how much it costs. I’d like to go into more detail in another interview soon.

If I could give a brief overview? Most of the activities of the GB Climbing squads are funded through Sport England and UK Sport grants. In order to receive these grants, the BMC must co-contribute: UK Sport stipulate a minimum 15% contribution and whilst Sport England don’t give a specific amount they are clear that they won’t invest in anything that we won’t invest in.

In 2022 we received £780k from UKS, SE, competition fees and sponsorship and spent £961k.  So, the cost was £180.61k: the equivalent of about £2.15 per member. Because of the success of our athletes and the work put in by the team to secure grant funding, essentially, we turned that £2.15 member donation into about £11.50. I think that is a pretty healthy return.

Q. What about the mention that GB Climbing is actually costing £500k per year?

I really don’t know how this figure has been worked out.

There does seem to be some confusion on how we allocate costs within the BMC, I won’t go into too much detail, but in the BMC we have never cross-charged departments for overheads like staff time from other departments, accommodation costs, electricity and IT costs/depreciation, but if we were to do so for GBC it would be circa £81K, giving a total of £261.44k for 2022.

It’s probably worth mentioning that in the total 2023 budget for all the activity with GB Teams and Squads, England Talent Pathway, and all BMC run domestic competitions (YCS, Four Nations Series and British Boulder and Para Lead & Speed), as well as a small amount of support for SkiMo and Ice Climbing will be £1.2m. All of that delivered through a member contribution of £196k, or about £2.30 per member.

RESTRUCTURE / REDUNDANCIES

Q. How many people have been made redundant?

As we said in our update yesterday, we will be reducing our overall Full-Time-Equivalent (FTE) permanent staff by 3.3, from 53 staff to 50 staff. There have been no compulsory redundancies and one voluntary redundancy. The remaining FTE reductions coming from non-replacement of vacant roles and reduction in total hours in some roles. Unfortunately, we also had to bring forward the conclusion of a fixed term contract, this was 0.8FTE (with half on project management for Mend-our-Mountains and half on fundraising). We have brought the project management element into the team and BMC will make a donation in lieu of funding the fundraising element.

With reductions across teams broken down as follows:

• GB Climbing & Marketing & Communications – 1.0
• Access, Conservation and Environmental Sustainability (ACES) – 0.3 (and reduced 0.4 fixed term contract as mentioned above)
• Finance – 1.0
• HR & Governance – 1.0

Q. Why have savings been made in Access? This is the most important part of the BMC.

The Access and Conservation and Policy and Campaigns work is at the heart of the BMC, we have built a strong reputation in this area and have gained the respect of the whole community through the work of volunteers and staff in this area over many years.

Because of this we wanted to continue to grow our Access, Conservation & Environmental Sustainability (ACES) work, hindsight shows us that we were too ambitious and that if we had been more cautious we might have avoided the need to reduce this back down.

Since I started in 2020, we have done more in access and conservation than ever before, I intend to keep that approach. The new structure, whilst reduced down, is still more than our staffing in 2019 and the past 15 years and the ACES team are extremely motivated to deliver our critical campaigns and access work going forwards. We have a good mix of knowledge and passion to move things forward in this team, there is a lot of exciting and impactful work to do.

Access remains an absolute priority for our members, and therefore it does for us. With income for the remainder of the year set to be below forecast, we have had to make reductions across all areas of the BMC not just in ACES.

VOLUNTEERS

Q. Is the BMC making as much use of its volunteers as it could?

We absolutely are not. I’ve had the pleasure in working in and around different organisations, all of which rely significantly on the work of volunteers, within the infrastructure across clubs and competitions and in development and support areas such as coaching, education, training and support services.

The outdoor community is full of passionate people that care deeply about their activities and the spaces they do them in. We have an existing network of Areas and some great work is done on local access, crag maintenance and led walks. We also have some super volunteers who coordinate and work closely across our environment and conservation activities, not to mention those that give their time to committees, international representation, the council, board and more.

But we still have a long way to go to match the huge potential volunteer supply to the demand for volunteers and to use this in places where we currently under-deliver or are missing opportunities. I have an ambition that we have a much more structured and managed volunteer programme, where we can build upon the opportunities that we have already created for the community to contribute their time across conservation and preservation work, support our events, raise awareness of the BMC and engage with the community, and learn and develop from each other. We are starting this work with some dedicated staff resource, pilot projects in the Lakes and with the YHA and I hope to see and be able to share important changes over the next year.

OTHER

Q. Has the CFO resigned?

Our current Chief Financial Officer is leaving on 4th August, to take up a new role at GB Snowsport. She leaves having made a hugely positive impact with delivery of new systems and processes over the past year. Having been working away from home for an extended period, the decision is based on a desire to rebalance work and family life. We’re sorry to see her go.

Our Financial Controller will take over as the lead finance role in the immediate term and will inherit a much-improved finance system that will allow rapid reporting and improved financial control versus what we had previously.

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