During the early days of the pandemic, the National Trust announced swinging cuts to environmental and conservation projects. Now they have released details of substantial redundancies of 1200 in the organisation. In addition, there will also be back-office savings on things like IT and travel.
It’s clear the National Trust like all major wildlife charities that operate visitor attractions have been hit hard by the lock-down. The difference with the National Trust is it’s massive, and I mean truly massive reserves.
Let’s ignore the £1.6 billion invested in the stock market, it’s an essential investment that bringing in income for the charity. Instead, let’s just consider it’s free reserves – cash in hand at the bank to cover unforeseen emergencies.
Over £300 million available in the free reserves fund
According to it’s latest annual report, it has a target of free unrestricted reserves of £181 million But its reserves have far exceeded that level and now stands at £308.6 million. Now you could argue that the National Trust has lots of old property to look after, but they have their own special property reserves fund to meet those emergency payments.
The unrestricted reserves fund is there to cover (quoting from the annual report):
- The need to provide short-term protection against downward fluctuations in annual revenues or capital receipts, such as legacies
- The need to provide long-term strategic financial support to properties, fund development work or central infrastructure
- The need to finance unplanned projects and acquisitions where the need arises
- The need to provide a financial cushion in the event of extreme circumstances affecting the charity’s ability to operate
- The need to protect the Trust from the investment market and pensions risk
- The ability to respond to opportunities for strategic investments
It’s quite clear that the impact of the COVID-19 crisis on the National Trust fulls well within the aims of the unrestricted fund account. And that funds account is substantially overfunded. There is room to call on that reserve and fully fund the impact of the virus on project and staff.
Covid-19 Cost to National Trust Estimated at £200 million
The National Trust has estimated that the cost will amount to £200 million in lost income. Even if this entire amount was funded from the unrestricted reserves account then it would still have over £100 million in reserve for contingencies while it rebuilt to the recommended level of £181 million.
Contingency funds are not savings accounts, they are there to be used in emergencies. The Covid-19 pandemic is a short-term emergency that will have an end date. Looking at the vast numbers of people now heading to the countryside, beaches etc and with a jump in staycation the end of the emergency is very much here.
With such vast reserves at its beck and call you have to ask why such swinging cuts to staff and conservation projects are being undertaken by the National Trust.
Is Cost Of Pandemic Being Passed To Staff And Wildlife To Protect Emergency Reserve Fund
Is the National Trust passing the cost of the virus onto the environment and it’s lowest-paid staff in order to protect it’s emergency contingency funds?
We shall soon see. The future annual report will make interesting reading. Will that contingency fund continue to grow during the pandemic emergency because it is being protected. It’s not used for what it is there for. And will senior officers at the National Trust be paid a bonus for steering the National Trust through the pandemic without financial cost by passing the cost onto staff and wildlife?