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tags: general
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# Financial contingency plan

*09-04/2020*

This is an initial proposed plan to get us through April and May.

## Why?

Our financial position has actually been deteriorating since October. Hiring fees peaked in September and have since been falling. Other net income, such as from our Beamery contract, has also been on a downward trend. Because our income (both hiring and other) is lumpy, it has not been immediately obvious how serious our position has been (e.g. "Net other income" went from -£19,156 in December to +£12,210 in January). However, our "current" balance sheet, which peaked at around £70,000 in early October has been declining with remarkable consistency since then at the rate of around £10,000/month and then fell by over £20,000 in March (although April will be better, with a number of invoices either raised or soon to be raised).

Hiring income, which makes up by far the largest part of our net income. has tended to peak in the month or two after graduation. Summer 2019 was particularly strong, peaking in September (our best ever hiring month), and we had our second best month in December, but the expectation that we might have another surge after FAC19 has turned out to be too optimistic. Far from reversing the downward slide of the last few months, it has been confirmed.

With a strong hiring round like last year in the Spring and Summer, the shift to the apprenticeship model might have been perfectly timed, but with the COVID-19 hiring freeze, it is going to arrive too late to allow us to maintain our current operating costs.

## How?

We might want to take advice, but HM Govt's furloughing scheme is probably not an option for us. We are all working full-tilt and while we are preparing the transition to apprenticeships and doing Tech for Better work, it doesn't seem conceivable that any of us could take time off, although we may have to review this view.

Here is what we can do now:

| Measure | Saving | Timing | notes |
| -------- | -------- | -------- | ------- |
| Defer paying our next VAT bill | £12,000+ | May | Govt scheme |
| Delay paying our next PAYE bill | £13,730 | April | Not part of Govt scheme |
| Defer Dan's salary | £4,000 per month | from now | |

This will relieve the immediate pressure.

For more financial data, see the [COVID-19 contingency planning](https://docs.google.com/spreadsheets/d/17I4oWNVAw29Hy1BaBCeHTAqgyLWcKS34hRpvLCkJnY0/edit#gid=0) sheet.

## Review

In two weeks.

## Meetings notes

### Clarifying questions

- Why is furloughing not an option? (Oli)
Legally we can't keep working whilst furloughed. Our current workload is too high for any of us to stop working.
We may have to reconsider this in the near future (probably by June). (Dan)
- When is the soonest we could be earning apprenticeship income? (Oli)
Not sure. We're not even certified right now. Aiming for FAC20 but it's unlikely we can start apprenticeships before July.
- Where we we take advice on furloughing? (Gregor)
Any legal advisors would have to tell us not to work whilst furloughed. Dan doesn't know anyone who is doing this.
- Are we likely to get hiring fees from FAC19? (Gregor)
It's likely we will get some from our existing network as the hiring freezes can't carry on forever. We're unlikely to make new partnerships. (Dan)
- What does delaying the PAYE bill mean? (Yvonne)
There's no official scheme for this, but if we don't pay it straight away the government is likely to just charge us interest. (Dan)
If we don't delay the PAYE bill we don't have the cash flow to cover it at the end of this month (April. (Yvonne)
We need to revisit this in another 2 weeks to see if our cash situation has changed. We can also look into loans. (Dan)

### Critical concerns

- FAc is volunteer-led so it's hard to distinguish between paid work and volunteer work. (Yvonne)
Oli was doing curriculum work before he was hired and will keep doing it for free after (or even if furloughed). (Oli)
- Not sure we should hire a fresh CF for FAC20 given the current situation. (Yvonne)

## Actions

Three proposals above are passed.

Additional discussion:

- Furloughing Oli from Week 8 once the main curriculum is delivered
Mostly positive.
- Salary deferral down to £2500 for the team. Practically this means Oli & Yvonne drop to £2500, Gregor stays the same and Dan is deferring salary entirely. Effectively asking people to load money to FAC that will be paid back later.

Both additional proposals are passed.