Resignation Rumours

[John Upham]

If we were discussing setting up the ECF today, would we start by suggesting an office staffed by four full time employees?

Sean,
Let us assume you had a clean ECF sheet, how would you start?

For this forum to be positive, there is an opportunity here. If useful suggestions are ignored then we cannot be accused of being negative. At least, this was one of Board justifications for de-branding the forum.

[Sean Hewitt]

If we were discussing setting up the ECF today, would we start by suggesting an office staffed by four full time employees?

Sean,
Let us assume you had a clean ECF sheet, how would you start?

I always like to think that I am constructive, so here goes.

Firstly, you would need to review all tasks currently undertaken by the office and divide them into four categories;

MUST HAVE: Put simply, things that the Federation cannot function without

SHOULD HAVE: Things that we would have in an ideal world but which are not crucial

COULD HAVE: Tasks and projects which, given sufficient resources we would undertake

NO NEED FOR: Tasks which are considered unnecessary or obsolete

Having done this, one can work out the resource necessary to carry them out. The must haves are a pre-requisite, the rest come down to a value judgment. I suspect that we would need less human resource than we currently employ. However, whatever the level of resource necessary, I would close the office. This is nothing against the people who work there but the very existence of the office means that the Federation is committed to certain fixed costs (rent, rates etc). This pushes up the cost of the services which the office provides and, in tough economic times such as these the businesses that survive are those with the lowest fixed cost base. It is invariably the case that such overheads find work to justify their own existence which, when soberly viewed, adds no value whatsoever. Variable costs are fine, they effectively pay for themselves, but we should keep fixed costs to a minimum. I would then staff the tasks that behave identified that we wish to carry out by people working from home. This may well be the existing staff, or it may be chess players taking on part time work (like the grading team at the moment). Of course, some of the work may even be done on a voluntary basis.

I believe this would deliver significant annual cost savings whilst maintaining essential services. Whether these savings should be passed back to players, or re-invested into chess playing or a combination of both is purely a matter of taste and should be decided by the democratic process.

Having dealt with the issue of cost, I turn to revenues. Apart from the DCMS grant there are two main sources of income not tied to specific expenditure; game fee and membership fee. We have a real divide in opinion as to which is best (largely split on a geographic basis) and whilst I for the life of me cannot understand why anyone would think that the chess prevention tax is a good way to encourage more people to play chess, and to play chess more often, I do accept that many people do indeed believe that (the poor misfortunates as my mother would say!!). The current direct membership hardly offers value for money and as such is unsatisfactory as is the current MO scheme. Although this scheme masquerades as a membership alternative to game fee, the reality is that it is not. Why? Because anyone who plays in an event who is not a member pays game fee. Equally, congress events which pay game fee don't have to do so for members. Both schemes are therefore overly complex. Although I would prefer to scrap game fee and solely run a membership scheme (only publishing grades for members) I accept that this would be as unacceptable to the south as scrapping Membership would be to the north. So, my solution is;

Each event which wants to be part of the ECF and be graded elects to be either a game fee event or a membership event. If they select game fee then every game is graded and attracts a game fee charge. There are no discounts for ECF members. If an event chooses to be a membership event then there is no game fee payable whatsoever. Every game is sent in for grading, but games will only be graded for ECF members (in exactly the same way as Regional Membership Events are graded currently). As now, Leagues and Counties would be able to run an MO scheme - thus spreading the work load around the country and away from the office.

This solution has the benefits of eliminating hybrid game fee / membership schemes and with them complexity and costly administration. It delivers, for each event, the ability to choose how to contribute to the ECF. No one in the south should object to northerners choosing the membership route as it does not affect the south. Equally northerners should be happy to allow southerners to continue to pay game fee - happy in the knowledge that they don’t have to. Value added membership services could be added - but only if properly costed and worthwhile. Hard copies of Right Move for example should be scrapped although the electronic version should continue.

Funding from the John Robinson Trust (JRT) and the Permanent Invested Fund (PIF) should be used to fund Junior and International chess respectively.

That’s how I'd do it.

[Sean Hewitt]

It was not made clear to those attending the meeting what policy issues separate the resignees from other ECF directors and managers.

That is because one can not make clear differences that do not exist. The discussion was about membership and OMOV and as far as I am aware there were no major differences, on these narrow points, between the board members - indeed, I was probably the most doveish on the issue.

The problem lay with what was going on off-stage, so to speak.

In order for the type of changes that are necessary to revive Englsh Chess you not only need a plan - which we had - you need the means to carry out the plan.

One director, already frustrated by the workings of the Robinson Trust and Council, did indeed resign in disgust at Council's unwillingness to discuss the idea of universal membership without resorting to foolishness - I think the grading manager's comments that the "graders would not stand for it" was the final straw for that director. We had not wanted to know who would or would not stand for anything - merely to discuss what chess players imagined should be the shape of a Federation fit for purpose.

That director resigning meant that I lost an automatic majority on the board - and another was thinking of going.

As, despite a majority, I had been engaged in an 18 month fight to change the structure of the ECF and as success now looked unlikely and as I had always made clear that unless I could make a real difference, I would go. I went.

I am rather proud of that decision.Too many want to hold ECF office because of some imagined personal status.

The power of your board can be ascertained from the fact that it took me 12 months to find out exactly what was in CCL and even more time to discover that Game Fee is simply a tax, the only purpose of which is to pay for its collection.

Sean is right that by far the biggest expenditure of the ECF is on admin. Yet the last board, despite fierce opposition from some members, was the very first to ask what was the purpose of such expenditure. This is not to say that the office does not work extremely hard, but goes back to the basic point.

We are in the position where we charge Game Fee and indeed membership solely in order to pay for its collection. It is amateurish madness.

I wrote my reply to John Upham offline and posted it without having first read Martin's post. Martin has clearly undertaken the review of tasks of which I spoke and determined those which are unnecessary - specifically collecting a fee to pay for the cost of collecting the fee - a practice which is complete and utter nonsense. This is why I wish to see simplification of calculation, payment and collection of such dues.

He and I may differ in fundamental approach (I come from a low cost business background, he's in publishing!) but we are both used to running a business. And, ultimately, we both know that you dont do something if the revenues are less than the costs.

[raycollett]

there was no doubt that the board had a plan.

The problem was that those attending the Finance Council meeting were not told about the plan. Why was the meeting not asked to vote on a specific proposal, for example disbanding the office at Battle East Sussex and the effects of that decision fully costed in terms of the lease agreement for the property, disposal or relocation of equipment, and redundancy pay for the employees? How much money would have been saved from the 2008-9 budget if the office were closed? What essential ECF functions was it proposed to maintain and what expenditure would be required to maintain them?

Ray Collett

[Sean Hewitt]

there was no doubt that the board had a plan.

The problem was that those attending the Finance Council meeting were not told about the plan. Why was the meeting not asked to vote on a specific proposal, for example disbanding the office at Battle East Sussex and the effects of that decision fully costed in terms of the lease agreement for the property, disposal or relocation of equipment, and redundancy pay for the employees? How much money would have been saved from the 2008-9 budget if the office were closed? What essential ECF functions was it proposed to maintain and what expenditure would be required to maintain them?

Ray Collett

The reason that such a proposal was not made by the board to the meeting was that closing the office was not the boards plan. Indeed, at the Finance Council meeting Martin Regan was very clear on that specific point because someone asked him. The board seemed to want to find ways to raise additional revenues as their way of having additional resources to invest in chess. Closing the office is my idea as to how to take the Federation forward, and I've only posted it in response to John's question as to my idea for an alternative structure.

The board wanted a discussion on the basic concept of moving to a membership fee funded organisation rather than a game fee funded one. It was an ideological discussion. They didnt want to disuss what the fee would be for example as that's too much detail for that kind of meeting. Had there been broad support for the general concept, the board would then (I assume) have investigated it fully, properly costed it and presented a plan to council - with perhaps two or three levels of membership fee together with what could (and couldn't) be achieved with that level of income. My guess is that, knowing what council is like, they didnt want to waste their time doing all that if council was against the whole idea on principal.

What saddened me was that most of the delegates couldn't see the big picture. They were only concerned with "how does this affect us" without wishing to consider how it might affect others. That's the reasoning behind my game fee / membership option. I dont believe a delegate should prevent one option from being an option just because they dont want to go for it. Each event should go for the option that best suits them, leaving others to choose the alternative if they prefer.

One thing is for sure - and I hope that all can see this. There is not going to be consensus on the membership / game fee debate. So lets stop having it, and move towards a compromise that suits all tastes.

[Sean Hewitt]

Sean,

We are in danger of agreeing.

I was just saying exactly the same thing! :

[Peter Sowray]

Sean,

I agree with much of your analysis.

Closing down the Office in Battle would be a step forward, but you have to be careful that you have correctly identified the MUST HAVEs. These mainly revolve around the ECF's relationships with Government authorities and FIDE. A half-time Secretary and a half-time Treasurer (for want of better titles), working virtually, should do it. Say £40,000 a year all-in.

You'd need to take a decision on grading. If you were determined to drive down costs, you should investigate dumping ECF grading and moving to the FIDE system. The charges levied by FIDE are surprisingly small.

Don't fall into the trap of coming up with a hotch potch revenue-raising scheme, just because you don't think some people (in this case, "the south") won't like the alternative. These compromises generate messiness and unintended consequences. If you believe that Universal Membership is the right thing to do, then go for it.

I don't agree when you take 15,000 as the upper-bound for the chess-playing population. There are roughly 70,000 kids a year playing in Mike Basman's tournament ... if the ECF could convert 10% of them each year into active chessplayers, the game in this country would be transformed.

So, are you going to stand for office in October? I might even vote for you. If I had a vote ...

Peter

[Sean Hewitt]

Closing down the Office in Battle would be a step forward, but you have to be careful that you have correctly identified the MUST HAVEs. These mainly revolve around the ECF's relationships with Government authorities and FIDE. A half-time Secretary and a half-time Treasurer (for want of better titles), working virtually, should do it. Say £40,000 a year all-in.

Absolutely. Identifying the correct MUST HAVES is critical. I havent tried to identify them here as I won't pretend to know enough about the workings of the office. A full review of its function would be required to understand its true value.

You'd need to take a decision on grading. If you were determined to drive down costs, you should investigate dumping ECF grading and moving to the FIDE system. The charges levied by FIDE are surprisingly small..

Indeed, FIDE charges are very reasonable. But there are many graded English events that could not be FIDE rated due to playing conditions (adjudication ; time limits etc). BUT, it may well be possible to get FIDE to run the ECF grading system itself instead.

Don't fall into the trap of coming up with a hotch potch revenue-raising scheme, just because you don't think some people (in this case, "the south") won't like the alternative. These compromises generate messiness and unintended consequences. If you believe that Universal Membership is the right thing to do, then go for it.

I'm not much of a politician as I too often say what I think. But it's clear to me that there is a pretty equal split between membership and game fee. Whilst my personal view is that membership must be the way to go, I realise that membership won't go anywhere unless the game fee supporters allow it. My dual option scheme is far from ideal but should allow both parties to get what they want and be happy.

I don't agree when you take 15,000 as the upper-bound for the chess-playing population. There are roughly 70,000 kids a year playing in Mike Basman's tournament ... if the ECF could convert 10% of them each year into active chessplayers, the game in this country would be transformed.

I was talking about people who play graded games. I had had a thought about the UK chess challenge. It was invite Mike Basman to run an MO. That way he can sell ECF membership to the kids at £6 per year and take a 10% commission (by a simple tick box on his entry form). If he gets 10% of his competitors to join up thats £4,000 per year for Mike under the current MO terms, and £32,000 per year for the ECF (after VAT). Also means he can grade the UK chess challenge for those kids who join the ECF. But I dont know Mike and so dont know his position

So, are you going to stand for office in October? I might even vote for you. If I had a vote ...
Peter

Wasn't planning to. I've run a £25m turnover business where I would spend many times the ECF's annual turnover in one go - my decision. Do I really want to put the work into sorting the ECF out, only to be thwarted by council and others who cant (or wont) see the big picture, resisting change at all costs? Unless there was some fundamental changes to the way things operate I'm not going to do all the work burning the midnight oil only to have to ask if I can buy a new lightbulb!!

But it's nice to know I might get one vote - if you had one..

[raycollett]

"The problem lay with what was going on off-stage, so to speak."

It would be helpful for members of Council to know what these were.

Ray Collett

[raycollett]

[quote="Sean Hewitt]One thing is for sure - and I hope that all can see this. There is not going to be consensus on the membership / game fee debate. So lets stop having it, and move towards a compromise that suits all tastes.[/quote]

If there is a compromise solution with some players paying by game fee and others by membership, how would we implement a one-member-one-vote system without disenfranchising those who pay by game fee? Would an electoral college system satisfy both main groups?

Ray Collett

[raycollett]

It was also clear to the majority of the board that Game Fee was a very inefficient way of raising funds.

I do not understand this point. According to the papers presented to the Finance Council meeting (C7.16), in 2006/7 the figures
(a) for Game Fee were: £52,120 gross income, £0 gross expenditure, and £52,120 net.
(b) for Direct members were: £45,451 gross income, £12,223 gross expenditure and £33,248 net

These figures suggest collecting income from organisations is more efficient than from individual subscriptions. This outcome matches my experience elsewhere, but I find it difficult to believe collecting Game Fee costs nothing.

Ray Collett

[Sean Hewitt]

If there is a compromise solution with some players paying by game fee and others by membership, how would we implement a one-member-one-vote system without disenfranchising those who pay by game fee? Would an electoral college system satisfy both main groups?
Ray Collett

You're mixing your drinks here Ray. Firstly because I haven't suggested that OMOV is a pre-requisite. It might be a good idea, but the operation of such a scheme would need to be properly investigated. It would be a fundamental move from a federation to a memership organisation. If such a move were deemed desirable then clearly, in my opinion, you would not get a vote if you were not a member!! Simple.

But, and more importantly, we already have an electoral college system. Organisations (leagues, unions, congresses etc) get a number of votes allocated to them dependant upon their level of participation (measured by graded results). Operationally this is far far simpler than OMOV but the real problem is proxies. Certain people seem to acquire a huge number of proxy votes in order to flex their muscles and wishes at council. The odd delegate splits his votes (clearly representing differing views of the organisations that he represents) but most vote en bloc. My solution to this problem would be to limit the number of proxy votes that any delegate can hold in addition to his own. Personally I believe the limit should be 1. However, I would actively encourage directed proxies (which is effectively the same as postal voting). So a delegate who cant attend doesnt give an open ended proxy to some other delegate but instead directs the chairman that his votes must go for or against a particular motion.

In fact, I may well put a motion to council to this effect in October.

[Sean Hewitt]

It was also clear to the majority of the board that Game Fee was a very inefficient way of raising funds.

I do not understand this point. According to the papers presented to the Finance Council meeting (C7.16), in 2006/7 the figures
(a) for Game Fee were: £52,120 gross income, £0 gross expenditure, and £52,120 net.
(b) for Direct members were: £45,451 gross income, £12,223 gross expenditure and £33,248 net

These figures suggest collecting income from organisations is more efficient than from individual subscriptions. This outcome matches my experience elsewhere, but I find it difficult to believe collecting Game Fee costs nothing.

Ray Collett

I would imagine that Martin is referring to the amount of office staff time that is spent dealing with game fee calculation and collection. The true fiscal cost of this would be contained in "Management Services". Martin clearly believes that that cost is approximately the same as the amount of money actually collected - hence his d3scription of it as "amateurish madness."

[raycollett]

it took me 12 months to find out exactly what was in CCL

When I was previously (late 1990s) an attending member of the then BCF, finance papers gave information about Chess Centre Limited (CCL) and the Permanent Invested Fund (PIP). I think it would be useful for such infomation to be provided to Council members about PIP, CCL, and the Robinson Trust and attention of readers drawn to the rules limiting how these funds can be used.

[raycollett]

If the ECF DOUBLED game fee tomorrow (and assume for the moment that everyone in the country agreed to pay the increase which of course wouldnt happen) it would only raise about £55,000. A reasonable amount, but not enough to change the chess playing world in this country in any significant way. Yet, if this were to happen, league fees would increase by 60-70% and therefore so would club subs to ordinary players. .

You exaggerate and I'm not advocating doubling game fee. The major proportion of most club and league expenditure is on the venues. League fees are a minor part of expenditure of clubs that participate in league chess. In my own club for example league fees, which include game fee, accounts for less than 10% of club expenditure (it would have been about 35% if the venue were free) and about 25% of League expenditure.