Christopher Hornsby to CHAIR OF COUNCIL
Your Suggestion / Comment
To Finance Committee/ Chair of Council
I have just read the 2023 budget with proposed increase in subs of 12.4% .
Have we carried out any affordability or sensitivity analysis on potential loss of membership as a result of the proposed increases? Average wage increases are only 6% pa whilst average mortgage costs have increased from 2.25% to 6% this year adding around £470 onto the monthly cost for a £150,000 mortgage. This could mean a number of members decide that, for now, they will cancel their membership.
Shouldn’t we consider capping the increase to say 8 or 9% maximum and making savings by delaying more capital expenditure and reducing staffing levels in the office, bar or course ? Given the significant recession forecast for 2024 perhaps the club should be taking a more cautious approach?
We could instead increase the amount on the bar card to say £100 to encourage more use of the bar and catering ?
I am also trying to obtain comparable figures from Caldy which I will provide non publicly if available .
Many thanks for your email which raises some important points.
I have fully consulted both the Treasurer and Chair of Finance in drafting this reply, so please accept it as our joint response.
Yes, we have fully considered all the points you raise about affordability, sensitivity, and the potential loss of members as a result of the proposed overall 12.4% increase in subscriptions for 2023.
Unfortunately, this is the amount of increase we believe is required this year in order to cover our everyday running costs and to begin once again to slowly build up the Club’s Development Fund, which is now significantly reduced following agreed historical commitments to invest in major capital projects including, most recently, replacing ageing essential course maintenance equipment.
As you will appreciate, everything the Club buys now costs more than it did in 2021. Although inflation is currently around 10%, much of what we buy has increased by a lot more – for example, bunker sand by 15%, top dressing by 20%, and fertiliser has doubled in price. Our 2023 energy costs still remain an unknown but are likely to at least double. An increase of anything less than 12.4% will see a shortfall in income and, therefore, will require significant savings to be found. As the Strategic Plan indicates, we are already looking at a number of cost-saving measures. In the event of a shortfall in income, this would need to include staff reductions. However, they come with significant consequences, and reductions in greens staff would mean reduced course maintenance and fewer course improvements (including potentially bunker renovation and drainage), and reductions in house staff is likely to mean reduced service standards and potentially clubhouse closures or significantly reduced bar and catering hours (meaning less income). A reduction in office staff is just not feasible.
There is no evidence that increasing the bar levy would increase sales.
There is no significant capital expenditure in the 2023 budget to defer, and any proposed major capital expenditure projects will not go ahead until we have fully costed proposals to put out to members for further consultation, together with options for funding. This will not be done until we believe the financial circumstances are right and that we can afford to do so. It is probably worth emphasising that these major projects are totally separate and unrelated to subscription increases which, as I say, are purely to fund on-going recurrent expenditure.
Thanks for your offer of obtaining comparable Caldy figures, but we do regularly liaise with our colleagues in neighbouring clubs and already have this information.
Finally, can I reassure you that we WILL be proceeding cautiously over the coming months – not only closely monitoring our membership renewal numbers, inflation and interest rates, energy costs, and government assistance for small businesses, but also when seeking opportunities to make the improvements to our club that members quite rightly expect.
Thanks again for writing in – your contributions are much appreciated.