Friday 25th June 2010

Levy Board Takes Further Steps to Reduce 2010 Expenditure

At its meeting yesterday, the Board assessed its financial situation and reviewed its planned expenditure in 2010 as well as outline options for 2011.

On the basis of current assumptions, it was estimated that in 2010 HBLB was still budgeting to spend £25m more than it would receive even when taking into account reductions of £4.6m approved by the Board in April 2010. This was agreed as unsustainable.

The Board agreed to aim at an additional total saving of £3.75m in the remainder of 2010. It approved the following specific expenditure reductions of £3.125m, with effect from 1st August:

Expenditure heading Reduced by
Prize money £2,100,000
Fixtures Incentive Scheme £450,000
Regulation and Integrity £300,000
Breeders’ Prizes £125,000
Veterinary / research £75,000
Training £60,000
Administrative costs £15,000

The potential for making further savings of up to £625,000 in areas other than prize money and fixture incentives is being examined.

The cuts of £3.125m will have the effect of reducing HBLB’s 2010 expenditure to £94.5m against forecast income of £72.6m, with the deficit met by HBLB’s reserves.

With regard to 2011, the Board reiterated that budgeted expenditure should be no greater than forecast income. It will consider further at its July 2010 meeting the appropriate income assumption to utilise for 2011.

HBLB Chairman Paul Lee said:

“The Levy Board very much regrets having to make further expenditure reductions in 2010 and we all understand that these will have a considerable and very unwelcome effect.

“Indications from bookmakers of the estimated yield of the 48th Levy Scheme ending on 31st March proved very inaccurate earlier in the year. As a result, the Bookmakers’ Committee has agreed to provide information to assist the Levy Board in its efforts to improve forecasting.

“The Board agreed that it will consider at its July meeting the appropriate sum to assume for budgeting purposes in 2011. It is recognised that this decision has a knock-on effect as far as the 2011 fixture planning process is concerned. Racing’s appointees on the Board expressed the view that, although they would wish to make progress with the compilation of the Fixture List as quickly as possible, it would be preferable to wait until the July meeting in the light of further discussion and information before the Board committed to a budget figure for 2011.”