Financial considerations in the skydiving sector during the coronavirus shutdown
Statement by Tash Higman, Treasurer of British Skydiving
When British Skydiving stopped being eligible for support from UK Sport, the Council decided to increase the financial reserves so we could keep going in difficult times. Without any public funding we needed to make sure that we could be self-sufficient and weather storms by ourselves. The last published financial statements from June 2019 show that the past prudence resulted in us having long term investments of £2.6m and short-term available investments and cash of £832,000 – what has been referred to as British Skydiving ‘sitting on £3m’. Much of it is held in long term fixed term investments. They bring higher interest rates but also mean the money can’t be accessed until they mature. At March 2020 £2.2m of British Skydiving’s investments are in such long-term investments, the earliest of which do not mature until 2021. Our cash balance in March also tends to be at its lowest, as the bulk of our income comes in the end of March, early April as full members renew for the new membership year from 1 April.
The spread of the coronavirus and risks of spreading COVID-19 we have now encountered the storm we had been saving for. I am very grateful to past Councils for saving for the future. Last week we already saw a drop off in renewals. We think members are uncertain about when they will be able to skydive again in the UK – rightly. This also means that our bank account isn’t being replenished at the usual rate at this time of year. To make sure we have enough in the bank to pay our staff in April, we are already in the process of selling some of our short-term investments. Unfortunately, they are not worth as much as they were even at their last official valuation at 31 December, however, we will be able to cover the cost of running the Association for the time being.
The financial support package announced by the government for business is also helping, being able to defer payment of VAT or PAYE tax bills means we don’t have to sell as many of our investments at this low value time. We have decided as a Council that we will support our staff who are either unwell or self-isolating in accordance with government guidelines. We will take advantage of the government’s changes to Statutory Sick Pay but top that up so that the affected members of our staff team don’t earn less as a result of being safe or ill.
Unlike our affiliated PTOs, we do not ourselves operate leisure facilities. As such, we do not expect to have to cease trading as a result of COVID-19. We do, however, need to ensure that we are fully prepared for when Skydiving operations recommence and are investigating if we are eligible for loan schemes operated through the banking system or the Job Retention Scheme which covers 80% of employees’ salaries during a business shut down.
We are encouraging all our PTOs to pursue these avenues to enable them to remain in business and keep those of their staff who are part- or full-time employees. An information and advice-sharing forum is being set up accessible to all PTOs to share government guidance and local experiences between the members of the DZO Specialist Interest Group. We will continue to add to this as information is released by the government and other authoritative sources to provide a single source of information which is easy to use and access.
There is currently a lot of government and banking support on offer. While this is available Council does not believe it is appropriate for British Skydiving, to provide financial support to any Affiliated PTOs. Like many others in the leisure industry, our sport is seasonal and we are concerned that if government support stops as the country gets back to ‘normal’ before we have been able to build up our summer fat to keep us going through the winter, situations become more difficult. We therefore will start considering at that time whether and what kind of support we as the National Governing Body of our Sport funded by the subscriptions of individual skydivers, and responsible for sporting, safety and training matters, may be in a position to provide.