Educational Trustees Meeting Nov 2017

13 The existing income from Quorn Grange Hotel and the nursery is not sufficient to meet our long term needs and sustainability. 14 Therefore over the last few years we have been carefully considering other ways of generating income. 15 We have settled on an expansion of the Quorn site with 25 new hotel bedrooms, a new nursery and new houses for rent. The business models for these and the target income streams on which these are based are £200k, £70k and £85k respectively. If these figures were achieved by way of surplus each year the Trust, and therefore the GFTU would be in a stronger position. 16 Planning permission for this development has been granted and relevant professional appointed. Project management meetings are held monthly for the new build project with all relevant professionals and a cost plan, cash flow etc have been prepared. 18 Inevitably in a project of this size issues have arisen and the Trustees will need to tackle some of these at this meeting and be aware of their impact. 19 Trustees will see that the nursery now separated as a new legal identity with its own accounts is not as profitable as we thought. Furthermore the budget plan, also attached for 2018 showed a potential deficit and the Directors have asked for it to be re designed. Further still I asked for a group to meet to consider the future nursery revenue post new build to again test the model of £70k profit per annum. No convincing analysis of this has yet returned and I have asked the Senior Finance Officer to now undertake a new study. Finally there has been a considerable problem of aged debtors at the nursery and special measures are now being taken by the Head of Finance and Finance Officer to address this. 20 The legal issue explored by our lawyers in terms of the status of the nursery as an entity can be put on hold until questions of financial viability going forward. 21 Whether the planned nursery building can be re-designated for alternative use is being explored. 22 Our next issue concerns the adequacy of the building designs in the hotel. As reported previously I moved us away from our original new build architect. One of the problems was there was insufficient detail in relation to the Goodacre Suite and meeting rooms. In effect the cost of expanding these as we had intended was not built into the cost plan. This has incurred further time in undertaking the budget planning and further costs to undertake a feasibility into expanding this area. At this stage a round estimate of extra costs is £150k and this will be assessed against future use. 23 Our neighbouring farmer Tom Duffin is an excellent neighbour and he and the hotel have worked together in a spirit of co-operation. Tom owns the track to the east of our land. He has kindly by verbal agreement granted access for plant to the new build site along his track. However we have a consideration that more than this could be needed long term and would ideally want a legally binding agreement, an easement, for some access. Informal discussions with Tom will have started prior to the Trustees’ meeting. 17 The funding for the new build, some £5.5m will be further gift aid from the GFTU to the Trust.

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