The Directors present their report and financial statements for the year ended 31 March 2024. This report also serves as the Trustees' report.
The accounts have been prepared in accordance with the accounting policies set out in note 1 to the accounts and comply with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and “Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)"
Mission Statement
Mid Argyll Community Pool (MACPool) is a social enterprise enabling the community to swim and take part in sports, leisure and social activities in support of health and well-being. We deliver this through quality in our facilities, service and partnerships.
Our key objective is to provide and promote swimming and water-based activities for the whole community of Mid Argyll. We do this through the provision of facilities and programmes for people of all ages and abilities.
The Manager and staff are responsible for the day-to-day business of running the MACPool Activity Hub, based on the overall strategy agreed with the Board of Directors. In the past year MACPool has faced 3 major challenges around staffing, the condition and reliability of our infrastructure and sufficient finances to be able to say we are a going concern. We have the following aims to ensure we can address these issues
To ensure we have well trained and motivated staff
In the past year we have also seen a higher turnover in our more experienced supervisors and management staff. We have investigated some of the reasons behind this with pay, working environment and working hours being the areas of concern. We have recruited and trained 11 lifeguards, 4 swim teachers, 2 supervisors and 2 managers in the last year. We have looked closely at pay rates and the environment in which people work to ensure MACPool staff are paid appropriately, and our new manager has been working hard to ensure we have a friendly supportive environment, that makes people feel valued and want to work here.
We are grateful to Alida Achermann for taking on the role as MACPool Activity Hub Manager in November who has helped us develop our future ambition to:
Develop our staff and create an environment where they can continue to grow, learn and improve.
We want to improve our swim teacher training which enables staff to progress to higher levels of skill and develop other qualifications in teaching such as open water swimming, and pool plant management.
We are starting to work with other pools on the West Coast as a group to provide staff training for the region which can reduce costs and develop a cohort of talented people to enable us to become more of a self-sustaining industry.
Improving our swim teacher training and extending this into other activities, not only supports our future business plans, but also evidences to our staff that they have a career at MACPool, not just a stepping stone to somewhere else. This will also provide new pathways for our customers, by ensuring that we can meet local demand for swimming lessons and adding lifesaving skills training to our services as a clear progression route for young people in Mid Argyll.
2. To manage efficient, well-maintained plant and buildings
In 2021/22 MACPool undertook a major redevelopment programme to improve the changing facilities and utilise the space provided by adjacent buildings. We now have a reception and changing village that supports the numbers of people using the facilities. We have a thriving café, and soft play area for younger children as well as leased rooms to a fitness and a beauty treatment business who increase the services we can offer.
However, with a near 30 year old pool we have to constantly service and maintain our plant, update our IT systems and monitor and maintain the fabric of the existing buildings. Over the next 3 years we will be focusing on 3 areas:
The fabric of the main pool building
We are currently undertaking a survey of our pool roof as there are signs of wear, and we need to ensure this 30 year old roof is fit for purpose. We should know more about its condition once we have the results of the survey at the end of the summer to be able to plan funding for its repair or replacement over the next 18 months.
Reviewing and upgrading our pool plant
Some of our plant is relatively new but there are 3 areas where we are experiencing problems and will be looking at ways of improving or replacing them to prevent future short term pool closures.
The biomass boiler system is temperamental, especially in the winter months when the fuel gets damp. We need to look at a backup or alternative energy source.
The CO2 dosing system used to balance the pH in the pool to prevent it becoming too alkaline has an unreliable supply of CO2. Along with other pools in the area, we are looking at replacing this with an alternative dosing method which is substantially cheaper with readily available chemicals.
Improving our IT Systems
Our website, learn to swim programme, booking and payment systems are old and do not talk to each other. This means it is difficult to update, maintain accurate data and often people can book out classes without paying and not show up for the activity reducing our income denying opportunities for others to use the pool.
We need to invest in our IT systems and develop this infrastructure so that it is fit for purpose, reduces administration time and improves our income.
Any investment in infrastructure is going to require funding and we will need to seek support for this separately once we have developed a plan and identified costs.
3. To have sufficient finances to run our operations
Our costs have been higher than our income over the past 2 years, with the living wage up by 25%, energy costs up by 60% and maintenance costs increasing.
Income is growing but not in line with costs, our sales income is up by 18%, our buildings are freehold and support from A&B Council, A’Chruach, Foundation Scotland and other local Doners provide 1/3 of MACPool income.
In 2022 MACPool had £140k in unrestricted reserves, however with continued losses our unrestricted reserves have eroded and in March we had just under £22k of free reserves, which is less than 2 months running costs. To ensure our charity remains a going concern we must ensure our income from our activities plus grants cover the cost of running the pool. We must also ensure we have sufficient reserves to cover 3 months costs to cope with business shocks such as the boiler failure early this year. In February this year we set out a plan to deliver an extra £50k pa for the next 3 years to maintain long term viability in Mid Argyll. We planned to achieve this by:
Growing our own business by improving the quality of teaching and activities we offer.
Controlling costs, especially looking at our energy and water contracts.
Developing a way for our community to support the pool.
Gaining additional long term support from local wind farms, community councils and community trusts.
In 2023/24 our grants and donations have increased to help with rising costs. A&B Council contributes 25% of our costs, and for in 2023-2025 have provided and extra £30k to support energy costs but this will no longer be available from March 2025. We have also received valuable support from Foundation Scotland and A’Chruach of £10,000 p.a. from 2023 to 2026 which has again supported our costs.
The good news for 2024-25 onwards is we have been awarded £71k over the next 3 years by A’Chruach and Foundation Scotland which will allow us to purchase a new disabled hoist, complete swim teacher training to enable us to rebuild our own income and provide funds to support day to day operations and rebuild our reserves. We have a number of initiatives which will help us control costs including renegotiating our utility contracts which should save an additional £10k from mid-2024.
Outlook
The year to March 2024 has been a difficult year rebuilding the MACPool team, juggling our finances and coping with aging plant and buildings. Looking forward we have a plan to complete staff training, grow our business and develop the finances to ensure MACPool continues to provide swimming opportunities to the people of Mid Argyll.
By the Autumn of 2024 we should have a report on the condition of the roof and a plan to address improving our plant and IT infrastructure. Once we know the costs and timescales involved, we can then develop a plan to finance and prioritise this work.
The operating result (before transfers) for the year was a deficit of £100,586, with a deficit in relation to the unrestricted fund being £29,523 for the year and the balance made up of depreciation on assets. We lost £10k as a result of a boiler failure in January/February, have seen staffing costs rise due to the living wage increases and electricity costs increased by over £27k. We had budgeted a break even budget after receiving a £30,000 additional fund from Argyll and Bute council for this year only and a 3 year grant from A'Chruach. In March we had reserves of £22,000 on the unrestricted fund which represents less than 2 months costs.
Owing to the redevelopment to the Pool now having reached its completion, the Trustees have taken the decision to reclassify the asset (being the Pool building and capitalised redevelopment expenditure) as unrestricted in accordance with accounting policies outlined by OSCR. The result is a significant reduction to the amount of restricted funds at the balance sheet date reducing from £2,363,189 to £151,184 for which the residual balance represents funding secured for restricted purposes. Further details can be found within the notes to the accounts at Notes 21 and 23 outlining the various grant support received by the Charity for the redevelopment.
The Trustees further emphasise that whilst on paper the Pool has significant reserves, the majority of funds are held in non-liquid, non-moving assets for which cannot be readily converted to cash or cash equivalents.
We do not have reserves to complete any further major work but will be looking to secure funding to resurface the carpark and refurbish the road drainage during 2023-24.
Mid Argyll Community Enterprises Ltd (MACEL) is a company limited by guarantee having no share capital, with charitable status in Scotland. The charity's objects are to advance education through the provision of skills in swimming and life saving.
The Directors, who are also the directors for the purpose of company law, and who served during the year were:
The Board of Directors held regular meetings throughout the year to develop and set strategy as well as to consider reports submitted by key staff and consultants, as deemed necessary. Board Meetings were recorded by Alison Whitefield in 2023 and we welcomed our new minute secretary, Jane Smee in January. The Board would like to thank Alison and Jane for all their hard work over the year.
The Directors have assessed the major risks to which the charity is exposed and have satisfied themselves that the necessary systems are in place to mitigate exposure to major risks.
The Directors' report was approved by the Board of Directors.
I report on the financial statements of the charity for the year ended 31 March 2024, which are set out on pages 7 to 25.
The charity’s directors, who also act as trustees for the charitable activities of Mid Argyll Community Enterprises Limited, are responsible for the preparation of the financial statements in accordance with the terms of the Charities and Trustee Investments (Scotland) Act 2005 and the Charities Accounts (Scotland) Regulations 2006. The Directors consider that the audit requirement of Regulation 10(1)(a) to (c) of the 2006 Accounts Regulations does not apply. It is my responsibility to examine the financial statements as required under section 44(1)(c) of the Act and to state whether particular matters have come to my attention.
In connection with my examination, no matter has come to my attention:
which gives me reasonable cause to believe that in any material respect the requirements:
to keep accounting records in accordance with section 44(1)(a) of the Charities and Trustees Investment (Scotland) 2005 Act and Regulation 4 of the Charities Accounts (Scotland) Regulations 2006 (as amended); and
to prepare accounts which accord with the accounting records and comply with Regulation 8 of the 2006 Accounts Regulations (as amended)
to which, in my opinion, attention should be drawn in order to enable a proper understanding of the accounts to be reached.
Iain D C Webster CA
The statement of financial activities includes all gains and losses recognised in the year. All income and expenditure derive from continuing activities.
Mid Argyll Community Enterprises Limited is a private company limited by guarantee incorporated in Scotland. The registered office is Mid Argyll Community Enterprises Limited, Oban Road, Lochgilphead, Argyll, PA31 8NG.
The financial statements have been prepared in accordance with the charity's Memorandum and Articles of Association, the Charities and Trustee Investment (Scotland) Act 2005, the Charities Accounts (Scotland) Regulations 2006 (as amended) and "Accounting and Reporting by Charities: Statement of Recommended Practice applicable to charities preparing their accounts in accordance with the Financial Reporting Standard applicable in the UK and Republic of Ireland (FRS 102) (effective 1 January 2019)". The charity is a Public Benefit Entity as defined by FRS 102.
The financial statements are prepared in sterling, which is the functional currency of the charity. Monetary amounts in these financial statements are rounded to the nearest £.
The accounts have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.
The Directors believe that Argyll and Bute Council will continue to provide revenue grant support (by way of an ongoing contract of services) to the company and, on this basis, consider it appropriate to prepare the accounts on the going concern basis.
Unrestricted funds are available for use at the discretion of the Directors in furtherance of the charitable objectives unless the funds have been designated for other purposes.
Restricted funds are subject to specific conditions by donors or grantors as to how they may be used. The purposes and uses of the restricted funds are set out in the notes to the financial statements.
Cash donations are recognised on receipt. Other donations are recognised once the charity has been notified of the donation, unless performance conditions require deferral of the amount.
Liabilities are recognised as expenditure as soon as there is a legal or constructive obligation committing the charity to that expenditure. it is probable that settlement will be required and the amount of the obligation can be measured reliably.
All expenditure is accounted for on an accruals basis. All expenses including support costs and governance costs are allocated or apportioned to the applicable expenditure headings.
Irrecoverable VAT is charged as a cost against the activity for which the expenditure is incurred.
Property, plant and equipment are initially measured at cost and subsequently measured at cost, net of depreciation and any impairment losses.
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the statement of financial activities.
At each reporting end date, the charity reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.
The charity has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.
Financial instruments are recognised in the charity's balance sheet when the charity becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.
Basic financial assets, which include trade and other receivables and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest. Financial assets classified as receivable within one year are not amortised.
Basic financial liabilities, including trade and other payables and bank loans are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Financial liabilities classified as payable within one year are not amortised.
Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.
Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of operations from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade payables are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.
Financial liabilities are derecognised when the charity’s contractual obligations expire or are discharged or cancelled.
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the charity is demonstrably committed to terminate the employment of an employee or to provide termination benefits.
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
In the application of the charity’s accounting policies, the Directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.
Pool admissions, memberships and associated income
(UF) = unrestricted, (RF) = Restricted funds.
Cost of merchandise, Cafe and other pool supplies for resale
Heat & Light (UF)
Repairs & maintenance (UF)
Cleaning (UF)
Telephone (UF)
Bank charges (UF)
Loan interest (UF)
General (UF)
Health and Safety
Uniforms
Rates & insurance (UF)
Stationery & postage (UF/RF)
Marketing (RF/UF)
Travel (UF)
Training (UF and RF)
Irrecoverable VAT (UF)
Instructors
Bookkeeping
Professional fees (RF / UF)
Independent Examination
Governance costs includes payments to the Independent Examiners of £1,050 for Independent Examination fees (2023 - £1,000) and £1,691 for other services (2023 - £3,458).
The average monthly number of employees during the year was:
The charity is exempt from taxation on its activities because all its income is applied for charitable purposes.
The charity operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the charity in an independently administered fund.
Deferred income comprise of amounts received for which the services to be delivered fall into the following financial year.
The restricted funds of the charity represent the net book value of the assets held for the charity's use and the unexpended portions of funds received for specific purposes.
Restricted Funds
The restricted funds of the charity represent unexpended portions of funds received for specific purposes as detailed below.
Redevelopment Project
The funds received for the Redevelopment project, as shown at Note 23, have been transferred to unrestricted reserves as outlined in the transfer note below.
The funds held as a VAT provision represents capital costs where VAT was claimed which is subject to the Capital Goods Scheme on which future VAT liabilities are to be met from these grants.
Redevelopment funds totalling £23,603 represent unexpended funds held for the redevelopment of the Pool.
Other restricted funding includes:
Foundation Scotland – Funding for ‘Float Fit’ equipment, training and delivery of classes.
Health and Social Care Fund – Funding received from the Argyll & Bute Health and Social Care Partnership to run an All Ability Cycling Project. In partnership with Ardrishaig Bothy and Cycling UK to purchase equipment and deliver training and bike classes.
Paths for All – Funding for training and to deliver health walks in the local community.
WG Edwards Charitable Foundation – Funding received to Subsidise Movement for Life class for Leisure Link Members.
Tai Chi – A donation received to subsidise swimming lessons for children.
Dolphins Swimathon – Donations for the redevelopment.
Living Well (NHS) – Funding received from NHS Highland to subsidies Movement and Mobility classes.
Mid Argyll Youth Development Service (MAYDS) - To ongoing support with lifeguard training and general entry into the pool.
Scottish Land Fund - To support ongoing costs with the pool.
Highland and Islands Enterprise - To the purchase of various IT equipment.
Argyll & Bute Council - To provide concessionary rates for entry to the pool for individuals who are on benefits
Transfers
The transfer from restricted funds of £2,140,942 consist of the following:
Input VAT of £11,521 repayable to HMRC under the Capital Goods Scheme which is covered by grants received for the redevelopment,
£5,505 to support entry into the pool,
Reclassification of funding (restricted) used for the redevelopment of the pool along with the original pool building itself totalling £2,123,916.
The Trustees, when reviewing paragraph 2.26 of the Statement of Reporting Principals as issued by OSCR and the Charities Commission (England and Wales) have decided to transfer such funds to the unrestricted reserve. This is due to the primary purpose of the pool buildings being to generate unrestricted funds for the charity which are used to meet ongoing and future running costs.
The Trustees wish to acknowledge the support of various funding bodies which are set out separately at Note 23.
The unrestricted funds of the charity comprise the unexpended balances of donations and grants which are not subject to specific conditions by donors and grantors as to how they may be used. These include designated funds which have been set aside out of unrestricted funds by the trustees for specific purposes.
Redevelopment Project
The Trustees wish to acknowledge the support of the bodies below who offered grant and other support for the redevelopment of the pool in 2023:
Scottish Land Fund,
National Lottery,
Foundation Scotland,
Big Lottery,
Highlands and Island Enterprise,
A'Chruach Fund,
Viridor,
Hugh Fraser Foundation,
Tarbert & Skipness Community Trust,
EB Scotland,
RCGF,
The Robertson Trust and Sports Scotland.
Some of the above funding was a combination of revenue and capital elements.
Other auxillery funding includes:
FCC Scottish Communities – Funding received to part fund the purchase of a new calorex air handling unit.
Co-op Local Community Fund– Funding received to purchase Soft Play Equipment.
CRF Hydro – Donation from CRF Hydro power towards the redevelopment project.
Various restricted donations – Funding received by way of donations towards the redevelopment project.
Adapt & Thrive (Redevelopment - revenue) – To support the redevelopment and cover costs of staff salaries whilst the charity is closed.
There were no disclosable related party transactions during the year or for the previous year.
The charity had no material debt during the year.