The National Trust 'Richer than ever' (ctd.)
September 7 2022
Picture: NT
The latest National Trust annual accounts have been released. Last year, I wrote that the Trust was 'richer than ever', and, after a bumper year, it's now richer than ever, again. This is undoubtedly a Good Thing. It's a reflection of the impressive effort everybody working at the Trust has put into re-opening their sites after the pandemic, as well as the public's determination to revisit country houses and outdoor spaces. But it also shows, in my view, that the Trust's senior management over-reacted to the pandemic, in sacking over 1,700 people, and restructuring what it calls its 'mansion offer'. I wrote about the restructuring plans (the ten year 'vision' document, illustrated above) at the time, here.
First, a look at the latest numbers (you can see the accounts in full here). My richer than ever description comes from what the Trust's 'total funds', which includes reserves. This year, total funds are £1.68 billion, up from £1.47 billion last year, which was already a record (you can see last year's accounts in full here). Total income was £651m, up from £507m last year, but still a little down on pre-pandemic figure of £680m from 2019. However, the Trust's preferred lead indicator of its financial health is what it calls its Operating Margin (in other words, a profit), and this year it was a record £177.5m, or 30.6%. To put that into context, in the last five years, the Operating Margin has been as follows:
2018 £111m 20.7%
2019 £112m 19.7%
2020 £131m 21.4%
2021 £94.2m 19.9%
2022 £177.5m 30.6%
This year's healthy Margin is in part due to surging visitor numbers, up 7 million on last year to a total of just over 20 million. The Trust has enjoyed stable membership numbers, and, as with last year, has some sharp fund managers working for it, seeing its reserves rise again. But having a significant effect on the Margin are staff costs, which were £257m pre-Pandemic, and last year (after those redundancies) were lower, at £218m, a saving of £39m.
The question is, however, did the Trust need to sack those 1700 people in the middle of a pandemic, and in quite a brutal fashion? The redundancies cost £22m in cash, and an unquantifiable figure in goodwill; I remember at the time hearing some really heartbreaking stories of staff not only losing their jobs, but their homes too. Trust management at the time told me they believed the pandemic would seriously impact their finances for up to three years, and they had to plan accordingly. But looking at the latest financial figures, there's no doubt the Trust could have afforded to retain its staff (by putting them on furlough), and still, once visitors flocked back post-lockdowns, have made an above average Margin.
You might say, of course, that at the time nobody knew how long the pandemic would last, which is true. And yet there's a difference between planning for an unknown, and panicking. Even as late as mid 2020, when the Trust was implementing its redundancy plan, it was clear the government's furlough scheme would be effective. I remember a conversation with a senior Trust leader where they refused to believe the furlough scheme would be extended, and even said - I was so surprised made a note of it - that they didn't want to be reliant on state funding. By late 2020 it was also clear vaccines would arrive by Spring 2021, and that planning for a return to full activities by about mid 2021 was likely. And so it proved.
In addition to job cuts, the legacy of the Trust's rushed savings plan can be seen today in numerous properties which have reduced opening times, just as the Trust's 'flexing' plan set out, all the way back in early 2020. Properties like Peckover House, which used to be open regularly throughout the year for self-guided tours, is now only open at very limited times for guided tours. Recently, on a visit to Hardwick Hall, I found one floor closed, due to a lack of volunteers. Those of us who, back in 2020, were somewhat suspicious at the speed with which the Trust unveiled its flexing plan will wonder why, after two bumper years of financial growth, these properties are not now fully accessible again. Perhaps that's what it was about all along.
I write all this as a member of the Trust, a lifelong fan, and an admirer of all those who work and volunteer there. I have no time for the misguided culture warriors at Restore Trust, who unjustly criticise the National Trust's scholars and curators. (In fact, they have helped make the situation at the National Trust worse, by taking attention away from what really matters.) I just hope the Trust learns from its mistake - and a good way to start would be by apologising to those it sacked.
