Chief executive David Butler defended the CIH's business plan, saying that, although the losses were regrettable, the present strategy remained "valid".
The institute, which has almost 18,000 members worldwide, has come in for stiff criticism for not sticking to its three-year plan (HT 6 June, page 8 and 30 May, page 9).
In a letter to Housing Today, Butler said 2002's operating loss of £941,388 was "higher than planned but we are on course to significantly reduce our deficit this year".
The target under the three-year business plan – instigated by the CIH council in 2002 – was to make an operating loss of £700,000.
The target for 2003 is to lose £300,000.
The CIH plans to reduce this to zero by 2005 by cutting costs at its five offices – although its 100 staff are not under threat.
It will also try to increase its membership fee, to generate an extra £40,000 a year, and raise the income from conferences, training and courses. This latter part of the business made a £250,000 profit in 2002.
The institute will also implement the results of a root-and-branch review of the business, which will conclude in September.
Butler said: "The fall in stock market values has meant that we have drawn from reserves to continue to fund our operations. Balancing the almost continuous demands for CIH to expand its activities within the constraints on our resources is not easy," he said.
However, Butler pledged to maintain services – including the team headed by Sarah Webb – unless the institute's financial position worsened and it was what members wanted. He said: "If people want us to operate in a risk-free environment, we will have to cut about 75% of our services."
The institute made a loss of £1,271,525 in 2002, but this was an improvement from the previous year when it took a hit of £1,888,964. The principal cause of this was the sudden decline in stock market returns – almost £500,000 in 2002 – which therefore failed to offset the institute's expenditure.
Source
Housing Today
No comments yet