As the biggest non-governmental landowner in Britain, streamlining the finances of the National Trust has been a huge job for Andrew Copestake. But it hasn't been an easy ride - not with a £200m repair bill, the threat of reduced lottery funding and TV demand to satisfy
The word ‘heritage’ invariably evokes images of Tudor tea rooms and an
obsession with preserving the past. So it seems ironic that on 4 July this year
the National Trust, the UK’s largest conservation charity, moved its
headquarters from a grandiose establishment in London’s exclusive St James’s
district to the somewhat less romantic environs of Swindon.
Located on the site of Brunel’s Great Western Railway works, the Heelis
building brings together 430 of the National Trust’s staff under one roof for
the first time and has already bagged several accolades for environmental
Designed by Feilden Clegg Bradley Architects, the two-storey building is
designed to benefit from natural and sustainable energy resources and to
maximise the use of daylight and natural ventilation.
For Andrew Copestake, the trust’s 47-year-old finance director, the move into
the building not only consolidated five office locations into one, it also
marked a watershed in an intense period of cost cutting at the charity. ‘We’re
trying to lose £6m of staff costs or 250 posts. The last few months have been
quite hard,’ he says.
Realistically, though, natural staff attrition resulting from the move will
barely make a dent in some of the hefty numbers Copestake has earmarked for
reduction. Compulsory redundancies are inevitable.
‘It’s part of a drive to get our net contribution from £4m in the 2003/04
financial year, to £20m each year, growing in line with inflation. Last year it
was £10m – it’s a stretch,’ he laments. ‘We have a turnover of £300m and the
challenge is trying to move some of that to the bottom line.’
Good financial management aside, the main thrust behind Copestake’s
cost-cutting mantra is a staggering £200m backlog of repairs and conservation
projects, which the National Trust wants to halve over the next 10 years.
We’re not just talking a slap of paint and some dry-stone walling: the
diverse nature of the work in question – and of the National Trust’s remit
generally – would probably shatter a few illusions about an institution that has
come to epitomise all things middle class.
The trust is the largest non-governmental landowner in Britain, boasting
around 250,000 hectares of land and over 606 miles or 18% of the coastline in
Britain. It cares (among other things) for 164 historic houses, 19 castles, 47
industrial monuments and mills, 26 sets of samurai armour, the national
collection of lawnmowers, 19 paintings by Turner and George Bernard Shaw’s
The list may come as a surprise to the hordes of unsuspecting children, who
over the years have been forced to endure school trips and family outings to
some of the trust’s dusty stately homes. Or perhaps not, as the lid was lifted
on some of these activities in a 10-part BBC series broadcast earlier this year.
Filmed over two of the most stressful years in the charity’s 100-odd year
life, the series began with a bourgeois revolt at Studland Bay in Dorset. Amid
the sandy beaches, a Georgian mansion and 8,000 hectares of prime land, the
first episode followed the trials and tribulations of the National Trust
property manager struggling to cope with gripes from dog owners, horse riders,
café owners and nudists all vying for control.
The series also featured the saga of John Lennon’s boyhood home, a
pebble-dash semi in Liverpool, acquired by Yoko Ono after lying derelict for 16
years, and donated to the trust to renovate it to its 1950s glory – if only the
pink bed-spread for John’s bedroom would be deemed suitably ‘rock ‘n roll’ and
given Yoko’s final seal of approval.
Copestake smiles when reminded of the TV series. ‘I felt very sorry for the
Studland property manager trying to satisfy so many different groups of people.
But it raised the profile of the Trust and it showed it in a quirky light, which
isn’t such a bad thing,’ he says.
The diversity is probably what attracted Copestake to the job in the first
place. Having stepped into the financial hot seat in 1997, it is quite simply
his dream job. ‘You come into work and you don’t know what you’re going to be
doing – whether it’s converting a country house into a hotel or acquiring a
It’s not just a random thought. Copestake did indeed recently buy a mountain
from the Ministry of Defence – the twin peaks of the Divis and Black Mountain in
Belfast, to be precise – for an undisclosed sum, thanks to a large Heritage
Lottery fund grant.
But whether it’s a mountain or a building, the decision to acquire involves a
complicated calculation to work out what level of financial support any purchase
For properties, the calculation involves working out the cost of repairs and
maintenance over a 100-year period. The trust sets up an endowment fund lasting
between 50 and 70 years, ‘and when the money runs out, we look for funding’,
Bearing in mind that four out of five of the trust’s historic houses open to
the public run at a loss, and the deficit is made up from central funds,
performing those sorts of calculations is core to ensuring some form of
financial predictability. Copestake admits that it took him a couple of years to
get to grips with the ins and outs of the job, and the peculiarities of its
Those calculations still take place, but in other respects, the National
Trust is a different animal to the organisation Copestake joined eight years
ago. With a remit that also includes responsibility for IT, one of Copestake’s
first jobs on joining was to consolidate transaction processing across the trust
from 15 regional systems into one central Aptos accounting application. At the
same time, the size of the finance function has been slashed by one third, today
employing 120 across the charity.
Fortunately his previous job as finance director of St Mary’s NHS Trust stood
him in good stead. ‘There was a big IT component to that job, but choosing a
financial system is a bit difficult when you don’t understand the financial
regime. The implementation at the National Trust was horrible,’ he says.
As if widespread cost-cutting, and the ongoing headache that is trying to get
the trust’s 300 properties to standardise on a single IT system wasn’t enough,
an £85m pension deficit in the accounts is another issue keeping him awake at
‘We’re now paying twice the level of contributions as two or three years ago.
The pension scheme is now closed to new members.’ An evaluation was due to take
place over the summer but as Copestake says: ‘All the assumptions are working
against us. People are living longer.’
The trust employs 5,000 staff and relies on the goodwill of 40,000
volunteers. ‘If you walked around the properties, you certainly wouldn’t
describe us as a flabby organisation,’ he says. But the need to slash costs is
forcing a change in focus. ‘In the past, every initiative was done at every
property. Going forward, we will focus on initiatives that will deliver the most
value, and we won’t be quite so ambitious about new systems and processes.’
Already plans for a single purchase order processing system have been
temporarily shelved. Instead, Copestake is looking to ‘strategic relationships’
with some of the trust’s 25,000 suppliers to achieve economies of scale and
reduce procurement costs.
But at least Copestake’s efforts are starting to pay off. ‘Last year our
costs flattened out, and it’s allowing profit growth to trickle though to the
bottom line.’ He also recognises that cost cutting alone isn’t enough to change
the charity’s fortunes.
On a positive note, membership – currently a staggering 3.4 million – has
been growing steadily over the past few years, at a rate of 500,000 new members
each year. Legacies, too, hit record levels in 2004 at £50m. But as competition
with ‘rivals’ hots up alongside pressure on funding, Copestake admits there’s no
scope for complacency.
‘We have concerns about pressure on lottery funding, which is why we need to
boost our bottom line. In the past, the Heritage Lottery Fund was a big
supporter of the National Trust, but we’re concerned that its focus may shift,
particularly now that the Olympics has come off – that’s why we’re building up
‘We have people in place to benchmark what we do to instill some
professionalism in areas such as heritage attraction and compare our results to
other charities. There’s a lot of crossover in our membership base with
charities like the RSPB, National Heritage and the RHS.’
Copestake is confident that investments in adventure play parks at properties
will help encourage more families to join and help change the profile of
members. Similarly, getting the message out about the relevancy and
accessibility of heritage can only help in that respect.
‘Our director of conservation would say that conservation is all about
managing change. It’s not just about setting something in stone – it’s about
reacting and adapting to it.’
Personally, he’s not a massive fan of the big, austere mansions owned by the
trust. ‘I prefer a smaller, compact manor house – something that you could
aspire to live in if you won the lottery. My favourite is Anglesea Abbey.’
Unlike a previous finance job at Thorn EMI’s Radio Rentals subsidiary,
‘renting very expensive TV sets to little old ladies’, at least doing this job
does give him a lot of job satisfaction. ‘You think, crikey, what a worthwhile
And if it all gets too much, Copestake always knows he can go home to his
trusty Fender Stratocaster guitar to belt a few tunes – from Led Zeppelin to
Scissor Sisters – and maybe imagine himself living the high life in a stately
home – albeit a small and cosy one – of his own.
Taken on trust
The charity sector may be immune from some of the cut-throat antics of the
commercial sector, but if you thought it escaped the wrath of the Accounting
Standards Board, think again.
At the National Trust, the huge value of investment funds – £650m last year
– means the charity is allowed to classify some capital gains as income.
‘We tend to invest quite heavily in equity, but the yield can be quite low,’
explains finance director Andrew Copestake. ‘But in the accounts, you can only
show actual income.’
Apart from hard cash legacies – representing a record £50m last year alone –
some donors also leave property or land to the trust. On the face of it, it’s a
hugely generous gesture, but sometimes, Copestake admits, it can be a poisoned
‘Sometimes we dispose of it or develop property on it to sell on and reinvest
in conservation projects. But we have about £5bn of property, most of which we
From the perspective of FRS15, the standard for tangible fixed assets, the
properties are heritage assets. FRS15 describes the circumstances in which
subsequent expenditure on an asset either should be recognised in the profit and
loss account as it is incurred or capitalised and then depreciated.
‘If you know the cost, you should put it on the balance sheet, but having a
fictitious value doesn’t mean anything. The auditors are sympathetic but they
have to say we don’t comply with FRS15.’
Another major accounting challengefacing the National Trust is the amount of
irrecoverable VAT in its accounts. Last year it faced a £2.9m VAT load, mainly
because the charity can’t recover VAT on open spaces.
‘Forging a constructive relationship with HM Revenue & Customs is
worthwhile. We have worked with them to try to simplify the regime, for example
using average recovery rates to simplify the regime. Until recently we had 40
VAT codes – now it’s half that.’