Pulse put the following questions to the RCGP, and have printed their response.
What are the main factors contributing to the financial problems at the college?
We took a decision in 2006 following extensive staff consultations to cease contribution into the final salary pension scheme. A repayment plan was agreed with the pension trustees and we have been paying a lump sum into the closed fund for several years to bridge the gap. Like all such schemes it is reassessed every three years.
The college, like all organisations who operate final salary schemes, is required to report its pensions arrangements annually in accordance with Accounting Standards FRS17.
The college acted prudently to close its final salary pension scheme and is in a much better situation than many other organisations. Our money purchase pension scheme has been taken up by around 90% of our staff.
30 Euston Square
The college will begin its repayments on the loan for 30 Euston Square in 2014 as planned and in line with the approval of RCGP Council, who have been kept fully informed prior to and throughout the move. The college has made it clear from the outset of the project that the building costs would not be met from an increase in membership subscriptions. The interest payments have been funded from previous rental charges for properties previously occupied in London, and a number of other college initiatives are on track to ensure that capital repayments can be met without any increase in membership subscriptions. These include increasing the commercial activity of the college, particularly that offered through the potential of 30 Euston Square.
Are there are plans to rent out a floor the college building commercially in order to raise funds?
There are plans to rent out a floor in the college building, which is surplus to our requirements, to a health-related professional body. Discussions are at an advanced stage but not yet concluded so we cannot comment further. A formal announcement will be made when contracts are signed.
Are there are plans to raise membership fees in order to raise funds?
The college is acutely aware of the current financial pressures on its members – many of whom are facing salary decreases in real terms – and works hard to keep increases to a minimum. The subscription notice for this financial year was sent to members in March as usual and there are no plans to raise membership fees beyond the inflationary rises that have been agreed by the trustee board and implemented from 1 April 2013. Next year’s subscription level will be set as normal as part of the annual budget process.