Since coming into this role last summer, I’ve made it a goal to be as open as I can be about both the progress we are making, as well as the challenges facing the Federation as we learn the lessons of the past and organise ourselves around the future.
I’m often asked by members about the finances of the national Federation and how subs are spent. It’s right that we discuss the state of our finances and keep you informed about where your money goes.
It's especially true at this time, when the Employment Tribunal judgment (together with the risks associated with other ongoing litigation) is calling into question the financial sustainability of the PFEW. While we are doing all we can to make sure the Federation weathers the storm, there’s no avoiding the fact that this is going to be a difficult time. I’ve previously disclosed that while conversations with the Claimants’ lawyers continue in the Employment Tribunal claim, the potential cost of the claims against us (including damages and legal costs) far exceeds the value of the liquid assets that the PFEW is able to realise in order to meet this potential liability.
It’s important to understand that almost 98 per cent of the centre’s income comes from subscriptions. Under our structure, local branches have the freedom to hold their own funds and own their own assets, which most of them do. These are separate to the national assets and are held and controlled at a local level. As many of you may be aware the branches use these funds for local projects such as welfare vans and financial support for individual officers and their families. Sometimes this support comes at the toughest of times, such as branches contributing to funeral costs of fallen officers. While some branches may be willing to support the central body financially, the centre does not have any power to compel branches to use their own funds for central purposes. Details of the assets which the national Federation and local branches hold are detailed below.
So, let’s be straightforward where do we spend our £39.5m subscription revenue?
As the graphic below shows, we spend it in three board areas:
HQ funding
HQ funding is the largest proportion of spend and covers two main parts: funding legal claims for our members and wider HQ Operations. On the claims side, 2023 we recovered over £28m in compensation for our members. Of significance is that the PFEW do not take any share and the members keep 100 per cent of the compensation awarded to them.
The HQ operation covers the support staff who enable delivery of training for our reps, provide IT services for reps, engage leading think-tanks to undertake independent research to provide evidential basis to influence chiefs and government in securing best possible terms and conditions for our members. In 2023, our negotiation efforts contributed to a 7 per cent officer pay award which took effect from September last year.
There is a small (circa per cent) balance which is set aside as rainy-day funds in the national reserves and which is available in circumstances where, for example, a branch needs additional funding to meet an urgent need.
As far as the settlement of the Employment Tribunal claims is concerned, we are continuing to engage with Leigh Day and hope to bring the case to an appropriate conclusion. Rest assured that this issue is top of the National Board agenda and the National Council is equally engaged. As CEO, I am working daily to try to find a solution that is a fair result for the claimants while safeguarding the financial future of the PFEW.
While these are challenging times, we are committed to maintaining the high level of practical support that members rightly expect and deserve. As well as handling the settlement, my overriding focus is on transforming the Federation into a modern, streamlined, effective organisation which continues to deliver on your behalf. While times are tough, we will build an organisation that gives voice to our members, and I am confident that we will come through this together as a Federation fit for the future.
