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MAY 2008

CLUB LAW AND MANAGEMENT

by Philip Smith, Secretary of the A.C.C.

Secretary's Report - Club Update

Recently I have been asked by Club Officers, who have telephoned the office for advice, or who I have met whilst visiting Clubs, 'How are other Clubs doing?' I think there is a general concern among Clubs that business is not as good as it was even twelve months ago.

In my role as Secretary of the ACC, I have the opportunity to speak to Clubs from every part of the UK and am therefore in a good position to formulate a general view as to how Clubs are faring. There are, of course, a number of Clubs which are seeing increases in Membership and surpluses, whilst some others are struggling. The purpose of this article is to provide a general view of what most Clubs are experiencing. In other words: an average rather than a specific.

Leisure Industry

There can be no doubt that Clubs are part of the Leisure Industry, and as such, must compete with the general public's disposable income. They are also subject to the increased red-tape and bureaucracy which affects all small business.

The smoking ban, introduced in the summer of last year, has affected different Clubs in different ways. We have some Clubs which have reported an increase in Membership and increased trade, particularly in respect of the sale of food. Many such Clubs have put this upward trend down to the smoking ban. The vast majority of Clubs, however, have reported a reduction in bar income and the income from gaming machines and rightfully have suggested this is a direct result of the smoking ban.

There is no doubt that smokers tend to be heavier drinkers and also tend to have a stronger predilection to gambling. You may think this is a sweeping generalisation, but there is statistical analysis to support this.

Economic Climate

However, I have reached a conclusion that the most significant reason for the general trade being experienced by most Clubs is the current economic climate. Increased food, fuel, and transport costs have, quite simply, reduced disposable income to an extent that a visit to the Club, or an extra round of drinks, is now, for many people, a choice which requires deliberation.

It is estimated that the average family now has to spend £20 extra each week on food shopping. I am not aware of any average family which magically has an additional £1,000 net of tax each year to spend without such expenditure affecting other outgoings. If one also takes in to account increases in fuel, transport and above inflation increases in Council Tax, is it any wonder that many people are staying at home?

Some Clubs have reported that many of their older Members do not wish to visit the Club in the evenings particularly if a Club does not have its own car park. The fear of crime, whether real or imaginary, can be a significant deterrent for many people's social activities.

Budget

Both Clubs and Pubs share the same competition with supermarket prices, which cannot ever be matched. In last month's magazine, I wrote an article on the effects of the Budget and the relentless year-on-year above inflation increases in Beer Duty.

Reports recently published in the Morning Advertiser, show that last year some 1,400 Pubs closed. The current figures available for this year indicate that the total number of Pubs closing in 2008 will be higher.

Gaming

I have mentioned the fact that Clubs are reporting a decline in Gaming Machine income, which has been accelerated by the smoking ban. The maximum jackpot prize for normal category Gaming Machines in Clubs remains at £250. This figure has not been increased for almost fifteen years, and yet Amusement Machine Licence Duty (AMLD) increases uncompromisingly in line with which ever inflation table the Government chooses to look at. The current AMLD is £1,840 per annum per machine.

The introduction of the new Category B3A Lottery/Gaming Machines provided Clubs with an opportunity to continue to offer Members a facility which was similar to the Automated Lottery Machines being played prior to the introduction of the Gambling Act. Originally, the only difference was that the maximum prize would be limited to £500 as opposed to £1,000.

However, Clubs operating these new Category Machines have found, to their cost, that HMRC were quick to apply AMLD and VAT on the net takings. The current AMLD for a Category B3A Machine is £2,030 per annum per machine.

A Club in Suffolk wrote to tell me that, as a direct result of this legislation, the income previously received from this machine has reduced so dramatically that a
reduction of £9,600 has been projected. A sufficient amount for most Clubs to record either a surplus or loss.

The advantage which Clubs have over other leisure outlets is the ability to bring together, in a safe social environment, people who broadly speaking have the same outlook on life and who share the same values. This unique selling point is one which I hope to encourage Clubs to recognise and promote.

Membership
Recruitment

As previously mentioned many Clubs are actively recruiting new Members and are looking at the facilities which are being offered. Members do not want the same entertainment and activities that were being offered twenty years ago. Food is increasingly playing a larger role for many Clubs, and the ability for some Clubs to offer functions and rooms for private parties provides vital income, in addition to a steady supply of potential new Members.

I would ask Club Committees to re-read the articles which were published in the October and November 2007 editions of the magazine, covering the subjects of Membership recruitment and Club advertising.

May I also recommend that Club Secretaries contact the ACC approved company 'Energy Helpline' to see whether any improvements can be made in respect of fuel costs. We have received excellent feedback regarding this company with many Clubs reporting significant savings. Energy Helpline may be contacted on 0800 970 2626.

In addition, the ACC have negotiated a new approved scheme with Streamline, providers of credit and debit card machine. Few Clubs offer this service due to the high costs involved. By using our group strength, Clubs will be able to offer Members this payment option at a fraction of the normal retail cost.

All Clubs can benefit by taking advantage of a number of endorsed products and services, from Brewery Deals to Gaming Machines, which are advertised regularly in our Magazine. New approved schemes are due to be announced later in the year.

The ACC

The ACC has been able to provide advice and assistance to a number of Clubs which are currently in the process of relocating to newly built, specifically designed properties. Even with the current credit crisis, land and property remains a valuable asset. Many Clubs are ideally located for profitable property development schemes to be explored. If your Club would like to look into the possibility of a property redevelopment scheme, then please let me know.

In addition to property redevelopment, an increasing number of Clubs wish to refurbish and renovate sometimes tired and well used rooms and accommodation. The fact is that Members and Guests do not wish to spend their free time in an environment which is not, at the very least, as comfortable as their own homes.

Harris Brothers, the ACC's recommended refurbishment company, has provided consistently excellent service to Clubs throughout the UK for a number of years.

I remain confident that our ACC Clubs are better placed to cope during difficult times than other Social Clubs. I base this view on having worked for the ACC for over twenty years, and knowing that the Officers, Committees and Members of our Clubs are dedicated, professional and hard-working.

Our Clubs also exist, and were founded, to support the specific object of promoting Conservatism. In other words, our Clubs have a reason and purpose for continuing, in addition to providing social and recreation facilities for our Members.

We continue to attach the greatest importance to offering Member Clubs the best professional service and support available. By working together, the ACC becomes a stronger body, representing and benefiting all our Member Clubs.