Update on the UK HQ financial situation
Last August, we shared with you some of the challenges around the UK HQ finances. A year later, we wanted to update you on where we are today.
This news story has been updated on 3 September 2021 to clarify the messaging around the UKHQ membership fee.
The pandemic meant, like many other organisations, we were left in a difficult financial position. This has been clear in many updates and online meetings shared last year, and was the deciding factor to sell Baden-Powell House (BP House) and Scout Adventures Downe campsite. Considering some of the challenges we were set to face, we can update that we finished this financial year in a better position than we had originally predicted.
A big contribution to this was due to the £2.147 million grant UK headquarters received from the Government as part of the Youth COVID-19 Support Fund. This is largely thanks to the lobbying in November 2020 from some Counties, Areas and Regions to release some funding support for the youth sector. It is also due to the difficult financial decisions we took over the past year including making redundancies.
Full details on our finances will be available when we publish our Annual Report in September.
Sadly, last year we informed you of our decision to sell BP House. Whilst we know many members have great memories from visiting BP House, we took the decision as the building's use in recent years was only 2% by Scouts.
This led to £34 million being added to our reserves, after an external valuation in last year’s market. Following a competitive process the final sale price has added an extra £10 million which will be reflected in the 2020/21 accounts.
Whilst our finances are in a better position than predicted, it was still important that we sold BP House now, as we anticipate further deficits in the coming years. We experienced a significant decline in our 2021 membership figures and we’re not expecting any more support from Government to help balance costs, i.e. the furlough scheme. In addition, the sale of BP House also allow us to place our reserves in a more diversified, flexible range of investments.
We’re aiming to use the money to protect us against any future events which could affect the movement by holding 12 months operating costs in reserve, which amounts to £20 million. We’re then going to use at least £10 million to advance our ‘Skills for Life’ strategy work and support our volunteers at this critical time in our recovery. We aim to make sure our volunteers are well placed to support the resurgence, especially in the communities hardest hit by the pandemic. That then gives us the remainder to recapitalise Scout Stores and repay our borrowings.
Our priority has always been to retain frontline support for volunteers. We have therefore been maintaining and enhancing services and will continue to do so, as the movement bounces back.
At the time we announced we would sell BP House, we also announced our intention to sell Downe Activity Centre, due to the investment needed for the site. We’re in discussions with a group called Friends of Downe who are fundraising to buy the site so it can remain accessible to Scouts – they will be working over the next six months to raise the funds to purchase the site.
Finally, we’re also pleased to say we’ll be reducing next years’ UK HQ membership fee from £36.50 to £35.00 per youth member (or £34.50 for prompt payment by 23 April 2022). This fee covers the essential ongoing costs to support the movement, such as helping to cover increasing operating costs to manage safety and safeguarding.
This cost is just the UK HQ part of the membership fee. Every Nation HQ, County/Area/Region, District and Group will be reviewing their own financial situation to set their own additions to this membership fee to cover the cost of running Scouts at each local level. We’re sure you’ll hear about the membership you have to pay for your area soon.
Last year was difficult for everyone and we had to make difficult and bold decisions. Because of those decisions, we can look to the future with confidence and optimism to ensure even more young people learn skills for life.