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RIBA faces up to financial crisis

The RIBA has responded to a major financial crisis by proposing cuts to the services it offers members.

The institute has undertaken a review of all its activities - which includes developing plans to pare back the regional network - because of a £5.5 million hole in one of its employee pension funds.A 3 per cent drop in membership during the past year has also aggravated the situation.

At last week's council meeting, vice-president for membership Aaron Evans likened his position to 'being in charge of the deckchairs on the Titanic as it sank'.

In response, chief executive Richard Hastilow has drafted a secret discussion paper - seen by the AJ - proposing the 'rationalisation of the regional network'.The report suggests the merger of Wessex with the South West, the North with Yorkshire, and the West Midlands with East Midlands.

The institute's problems centre on a final-salary pension fund run for staff until 1996, when former director general Alex Reid realised it was in difficulty and ordered that new staff should use a different scheme.However, problems maintaining the fund at a healthy level reappeared last year following a drop in the stock market.

At a recent meeting of the regional chairs, Hastilow admitted that the institute needs to find £750,000 a year from 2006, with contributions increasing until the £5.5 million void has been filled.

He confessed that the institute is facing hard choices on how to cut back the cost of services offered by its new cultural arm the Foundation, its commercial arm RIBA Enterprises, and also the Professional Services department.

And president George Ferguson - speaking at last week's council meeting - agreed there were real problems.'When we say 'cuts'we mean 'cuts''he said.'But we must try and use this as a way for us to think creatively and work out ways of solving our problems.'

Councillor David Thorp was more pessimistic, likening the institute to a 'dead fish in the water'.'This has been coming for some time and it should have been predicted, ' he said.

'The fact is what we need to do is charge more for membership. It is the only way we can keep services at the present level.'

However, in an official response, Hastilow insisted the 'situation is neither catastrophic nor cataclysmic'.

'We do have this one big problem with the pension fund and we do have to look at ways of saving money, 'he said.

'We have had this big dip, and we do have to work out how to solve this problem unless the stock market suddenly gets better, 'he added.

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