2016 BUDGET GUIDE
Foreword 3 Mission & Objectives 4 Financial Overview 8 Money In 10 Money Out 11 Delivering Services 12 Services Explained 13 Cost to Participants 14
FOREWORD NICK RUST CHIEF EXECUTIVE S FOREWORD It is one of my key aims as Chief Executive to ensure that the BHA is more open, transparent and in touch with the needs of the sport it serves, which is why I have decided to publish this booklet. I have made it an objective to speak to as many of the sport s participants as possible in my first year in the job, across the full spectrum of the industry, including our diverse range of owners, trainers, jockeys and racecourses. One message that keeps coming back to me from these conversations is that financially it s tough going out there on the ground. Owing to the issues we face regarding our funding mechanism not currently delivering a fair return to the sport from the betting industry, times are tight financially. We have an ambitious agenda for the sport in terms of how we want to grow participation and revenues, but if this growth is to be sustainable it needs to be built on solid foundations. We will strive at all times to ensure that we are providing an effective, efficient service which represents value for money for our participants. We are aware that one of the financial pressures placed on our participants are the fees that we charge to operate the BHA. It is for this reason that I wanted to make sure our participants are aware of what they get in return for their fees and the value that the BHA is seeking to deliver. Nick Rust Chief Executive 3
MISSION & OBJECTIVES THE BHA S MISSION AND STRATEGIC OBJECTIVES The BHA is the governing and regulatory body for British Horseracing in Great Britain, with wide-ranging responsibilities. We regulate, organise and represent British Horseracing. We lead and co-ordinate activities which will ensure the overall health, development and growth of the industry. We prioritise the welfare of our horses and our people. In 2015, along with all the key stakeholders in British Racing, we launched the Strategy for Growth, which aims to build a more prosperous and sustainable future for the sport, and those deriving their livelihoods from it. The following ambitious growth targets were set: Number of horses in training 1,000 additional horses by 2020 Betting participation levels up 5% by 2018 Racecourse attendance levels reaching 7 million by 2020 New income for the sport 120m extra per annum by 2018 4
The goals of the industry s Strategy for Growth are intrinsically linked to the BHA s wider Strategic Objectives: To deliver improved and sustainable funding from betting on the sport To provide equine welfare leadership To develop properly funded and integrated welfare and training programmes To work with others in the sport to grow participation levels and deliver the Strategy for Growth, and associated targets To lead an holistic and collaborative approach to race planning To continue to evolve a regulatory and integrity framework that ensures improved confidence amongst participants and the racing and betting public To continue to develop a framework that sees Britain further its position as the home of the best quality racing in the world To develop and maintain a cohesive and friendly workplace in which commitment, contribution, enthusiasm and professionalism is expected and recognised To promote and develop the sport s community engagement work under the banner of Racing Together 2015 also saw an historic moment for British Racing with the signing of the Members Agreement between the BHA, the Racecourse Association, the Racehorse Owners Association, the Thoroughbred Breeders Association and Licensed Personnel, comprised of the National Trainers Federation, Professional Jockeys Association and National Association of Stable Staff. The Members Agreement heralds a new way in which the sport will be run, with strategic decisions taken in a unified manner, for the long-term benefit of the sport as a whole. 5
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BHA BUDGET 2016 7
FINANCIAL OVERVIEW FINANCIAL OVERVIEW In 2014 the BHA recorded a cash deficit of over 2m as a result of increasing its activities whilst freezing participant fee increases in 2013 and 2014. In order to redress the balance, a 5.85% fee increase was implemented in 2015 which has contributed to reducing the deficit to a forecast of 461k in 2015. The BHA s deficits have been funded by its cash reserves, which are forecast to stand at 3m at the end of 2015. 2015 forecast 2016 budget Change Income 30,336 31,152 816 Expenditure 30,797 31,925 1,128 Cash deficit (461) (773) (312) 8
The BHA is now delivering more in terms of services than it ever has before. In particular this includes launching the Strategy for Growth which inevitably will cost money to deliver but in the long term has the objective of growing the sport and in particular income streams for the industry. trying to ensure that they are minimised, but considering ability to pay. Racecourse fixture fees will increase by 3% whilst the majority of the various fees charged to owners and trainers will not increase in 2016. We believe the 1.128m increase in expenditure in our 2016 budget is necessary to deliver our key strategic goals which will include a compelling package of participant welfare and training activity, completing our work around holistic race planning and streamlining our regulatory activity on racedays. In addition, we continue to reorganise and develop our workforce which accounts for circa 50% of our overall cost and have made a few increases in people in key areas to ensure our strategic goals are delivered. We also continue to invest in systems including but not solely with Weatherbys to ensure the underlying infrastructure which is needed to operate our sport on a daily basis is fit for purpose. In order to fund these activities and deliver excellence for our sport, we have considered what increases in charges we might need to make. We now have a dedicated senior leader within the BHA who is focusing on delivering new efficiencies and raising income from sources other than our participants. It is expected that good progress will be made on this in 2016. In the meantime, we have considered the charges made to the sport s participants, Fee increases for owners relate to: Name reservations Colours registrations for owners that don t have horses in training Foreign race entries Use of Weatherbys call centre for making entries and declarations Fee increases for trainers relate to: Stable staff validity passes/trainers identity cards Non-online return on horses in training Jockeys fees will increase by 3%. Racing publications will increase by 3%. Over the coming two years, the BHA aims to deliver a surplus in order to replenish cash reserves to the 4m level recommended by our audit committee. We continue to explore cost saving opportunities and funding opportunities, whilst delivering a first class service across the industry. Over the following pages we break down the income that the BHA receives and the areas in which it spends this income in delivering the many services to British Racing s participants. 9
MONEY IN WHERE THE MONEY COMES FROM 2015 2016 Change % Racecourses 19,904 20,640 4 Owners 7,807 8,052 3 Trainers 631 658 4 Jockeys 261 264 1 Grants and other income 1,733 1,538-11 30,336 31,152 3 BHA cash reserves 461 773 68 Total 30,797 31,925 4 66.23% Racecourses 25.85% Owners 4.93% Grants and other income 2.11% Trainers 0.85% Jockeys 10
MONEY OUT WHAT THE MONEY IS SPENT ON 2015 2016 Change % Employees 14,929 15,697 5 Supplies and services 15,058 15,159 1 Capital expenditure 810 1,069 32 30,797 31,925 4 The BHA employs more than 220 people. The majority of staff work in the areas of integrity, race planning, raceday regulation and welfare. Supplies and services include software costs, property costs and professional services. The most significant area of capital expenditure is in the development of new software and in particular the replacement of our Racing Administration system in partnership with Weatherbys. 49.17% Employees 47.48% Supplies and Services 3.35% Capital Expenditure 11
OUR SERVICES DELIVERING OUR SERVICES 2015 2016 Change Costs % Racing administration 15,252 15,345 1 Raceday activities 5,609 5,855 4 Equine safety and welfare 4,016 4,506 12 Integrity 1,447 1,540 6 Training, development & welfare 987 1,073 9 Race and fixture planning 958 1,026 7 Handicapping 892 887-1 Central disciplinary and regulation 565 626 11 Participant licensing 441 462 5 Other 630 605-4 30,797 31,925 4 48.06% Racing administration 18.33% Raceday activities 14.11% Equine safety and welfare 4.82% Integrity 3.36% Training, development & welfare 3.21% Race & fixture planning 2.77% Handicapping 1.96% Disciplinary and regulation 1.89% Other 1.44% Participant licensing 12
OUR SERVICES OUR SERVICES EXPLAINED Racing administration: Includes the cost of the Weatherbys Racing administration software and racing services and the cost of the BHA s head office at 75 High Holborn. Raceday activities: Includes staffing (Stipendiary Stewards, Judges, Clerks of the Scales, Equine Welfare and Integrity Officers, Starters around 66 staff in total) and post-race sampling. Equine safety and welfare: This figure includes only activities which are directly attributable to this function, but equine safety and welfare underpins all of the output of the BHA across all of these categories. Integrity: Primarily staffing costs of central BHA resource and field-based investigating officers. Participant training, development and welfare: A significant focus for the sport to address the staffing shortage issue by means of recruitment and retention. Race and Fixture planning: Annual Fixture List process takes at least four months from start to finish to programme circa 1,450 fixtures, plus programming the circa 10,000 races run annually. Handicapping: 12 handicappers allocating ratings to the circa 90,000 individual runs each year. Handicap races form 2/3 of the race programme. Central disciplinary and regulation: Staffing and the holding of disciplinary hearings. Participant licensing: Includes trainers, jockeys, owners, stable staff and racecourses and the cost of stable visits. Other: Miscellaneous costs. 13
ESTIMATED BHA COSTS ESTIMATED COST OF SERVICES TO PARTICIPANTS IN 2016 Racecourses BHA budgeted income from racecourses 20.64m Number of programmed fixtures in 2016 1,482 Average contribution per programmed fixture 14k Owners BHA budgeted income from owners 8.05m Number of horses in training (av. Nov14-Oct15) 13,688 Average contribution per horse in training 588 Trainers BHA budgeted income from trainers 658k Licensed trainers at 31 October 2015 558 Average contribution per trainer 1,179 Jockeys BHA budgeted income from professional jockeys 79.3k Licensed professional jockeys at 31 October 2015 407 Average contribution per professional jockey 195 Images: Dan Abraham, racingfotos.com. Data: BHA s Racing Administration database and Management accounts. 14
CONTACT US An electronic version of this booklet is available in PDF format on our website: www.britishhorseracing.com/press_releases/ You may write to us at the following address: British Horseracing Authority 75 High Holborn, London, WC1V 6LS The switchboard can be contacted on: 020 7152 0000 Media enquiries should be directed to: 020 7152 0166 If you require any general information about racing, then please visit our website: www.britishhorseracing.com www.designbytangerine.co.uk