National Trust prepares for cuts

The National Trust plans to cut its workforce and increase fees for its 3.4 million members in a bid to stabilise its precarious finances.

Announcing a new three-year strategic plan for 2007 last week, the trust said it would have to reduce costs because its needs were outstripping available funds.

The charity's director of policy and strategy Tony Burton conceded that its operating surplus for 2003/4 of £3.9m out of a total turnover of £300m was "simply not enough".

Reserves stand at only £5m, considerably less than the trustee board's target of three months' operating expenditure.

"We are sailing a little close to the wind, especially if we have another Boscastle or foot and mouth crisis - events which really impact very heavily on us," he said. He said the trust would have to trim its wage bill though planned efficiency measures such as establishing a new membership services department and centralised HR section, as well as streamlining contracts with suppliers.

But Burton said it was "keeping its options open as to whether to go further than that".

He said: "No decision has been made on whether we need compulsory redundancies to hit financial targets."

The strategic plan has a target of raising the operating contribution or surplus from £3.9m to £20m - still less than one month's expenditure - by 2007.

The trust will also raise the cost of membership subscriptions by more than the rate of inflation as it seeks to bolster its "operating cushion".

But it will attempt to secure more funding from government agencies such as the Learning and Skills Council, the Regional Development Agencies and individual government departments.

The trust will also approach the corporate sector for sponsorship arrangements.

"This is especially important when the Government is showing increasing signs that it is failing to recognise the value of a high-quality environment and a vibrant heritage sector," said Burton.

The charity's financial plight has been worsened by poor stock market performance recently. Investment income dropped by £700,000 during 2003/4, compounding a £3.7m slump in 2002/3.

Capital grants also fell sharply, from £30m in 2002/3 to £9m in 2003/4.

But income from the trust's commercial arm - National Trust Enterprises - has helped to mitigate these losses. Commercial income increased in 2003/4 from £69m to £75m.

"The three years ahead will be a challenge, but one we relish," said the trust's director-general Fiona Reynolds.

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