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CIH reports loss of almost £1m as membership falls
The Chartered Institute of Housing (CIH) has posted a loss of just under £1m for 2016, as membership of the organisation continues to decline.
The loss, reported today in its accounts for the year ending December 2016, marks a 20% increase on the £823,000 deficit booked in 2015.
The membership organisation said it was “disappointed” by the figures, but added that a “significant proportion” of the lost income could be attributed to one-off costs.
The net loss, which excludes these one-off items, was £446,000. This marks an improvement on the £697,000 from 2015.
CIH said this “was in line with what we anticipated”.
Membership of the institute also decreased in 2016, falling 3% from 17,368 to 16,840.
CIH has recorded losses and similar declines in membership every year for several years, and has now lost nearly 6,000 members since 2010.
In its accounts CIH said the drop “reflects the tough financial environment housing organisations continue to operate in” with members informing them the decision not to renew was down to “financial constraints”.
However, it is understood membership income is roughly consistent year-on-year, and is not a major contributor to the increased loss.
The number of paying members of the CIH, excluding its Asia and Pacific Branch, was 10,074, a rise on the 9,968 in 2014. Its retention rate for paying members is 88%.
Overall, CIH turned over £9.3m in 2016, with expenditure reaching £10.5m.
It said £150,000 of the loss was due to ending the lease on its London office to move to cheaper premises in the capital.
A further £227,000 was written off due to the decision to initiate insolvency proceedings for CIH Consultancy, a commercial subsidiary which offered consultancy services to members. The subsidiary made a £60,000 loss in the year.
While the decision to wrap up the consultancy occurred this year, accountancy rules allow the cost to be booked in the 2016 accounts.
Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: “The organisation remains on a strong financial footing. However, we do recognise that we are not where we need to be and we haven’t been for some time. We know that we are on a journey of change and that doesn’t happen overnight, it takes time, that said we are disappointed not to have seen quicker progress in our financial performance given the changes we have already made. A significant proportion of our loss this year is attributable to one-off costs which are the result of decisions to make us sustainable in the long-term.”
The organisation also booked a £2.6m pension liability to give a total negative movement in funds of £3.5m for the year.
Recognising the pension deficit on the balance sheet is necessary under accounting rules and does not reflect an actual loss.
The accounts say CIH holds unrestricted financial reserves of £4.01m. It adds that it plans to establish a “designated reserve” to meet its pension liabilities over the long term.
It said: “The ability to set aside such funds is dependent upon CIH generating surpluses which then become available.”
During 2017, CIH aims to increase paid members by 3% and lift income raised from members to just over £2m.
Update: at 12.00pm, 06.09.17 This story was updated to include more details about the CIH’s membership
