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Equestrian Industry Viability: Are CICs the Answer?

"The equestrian industry has to act to ensure it is viable – as 58% of employers fear they will not be able to pay staff the national minimum wage (NMW) in future," a recent Horse and Hound Magazine article stated.


A British Grooms Association (BGA) and Equestrian Employers Association (EEA) study found that 90% of employers are concerned about the increase, and the lowering of the age threshold, and that 21% may have to close their businesses as a result. The EEA (www.equestrianemployers.org.uk) itself was launched to support equestrian employers after it emerged that 57% of grooms were not paid the national minimum wage (NMW) or national living wage. It also emerged that 89% of employees were aware of the NMW, although the majority were not receiving this level of income. Non-compliance with payroll obligations was also prevalent and many grooms said they were working over their contracted hours.

“There has to be change, to be viable, as well as legal,” Lucy Katan, executive director of the BGA and EEA, said. “We must see modernisation in the equestrian working day, or the industry will not be viable. In our survey, 46% of employers say they will have to reduce staff hours. With the average groom’s week 50-65 hours, this is a progressive resolution. If a business is not viable it has two choices; either alter the operation or cease to trade... Doing it ‘for the love of it’ doesn’t wash any more; I can’t pay my energy bills with ‘the love of it’. I can see why so many yards have gone bang as it’s not sustainable.”


A BEF spokesman told H&H that industry viability is something the BEF has been working on with the British Horse Society, Association of British Riding Schools, Pony Club and Riding for the Disabled, as well as the EEA and BGA for some time – and that Sport England has found that the current economic situation is having a negative impact across sport and physical activity.


“Via our ‘health of riding schools’ work and the insight it’s provided over two years, we’ve been working with member bodies in trying to support with wider education. As an example, we funded a session looking at income diversification through setting up CIC arms alongside the more traditional sole trader model so they can generate more income through grants."


Are more community interest companies really the key to creating a more viable horse industry? CICs exist primarily to provide a vehicle for social entrepreneurs to establish a company that is demonstrably and legally “not for profit” and for the benefit of the community it serves. While it could be argued that riding schools contribute to improved mental and physical health for riders, many offer limited social benefit to their wider community. A recent BEF study showed that 57% of respondents weren’t even aware of where their local equestrian centre is.


The truth is that many CICs derive all or a part of their funds from trading (selling products or services to generate income) and any profit must be reinvested to grow and develop the business benefitting an identified community or given directly to that community. Grants for CICs are few and far between as many funders prefer registered charities and the number of community interest companies is constantly increasing. Since the legislation enabling the formation of Community Interest Companies (CICs) came into force in 2005/6, the CIC Regulator reports that there have been around 50,000 CICs registered and around 30,000 remain on the register of companies. The rate of registrations has grown from a few hundred a year in the early years, to 5000-7000 a year, with a dramatic increase in the rate of registrations since 2019/20.


CICs will usually fare better if they generate their income from commercial trading, without the need for significant charitable grant funding and/or donations. And they do best when set up by an entrepreneur or a board with a passion for improving communities, not just making money. Charities are usually a better option if significant funding is needed from traditionally charitable sources such as grants and donations, providing, of course, that the organisation is established for wholly charitable purposes for public benefit and can comply with all the requirements of charity law and regulation.


Creating more CICs is not the answer to the equestrian industry's financial crisis. All it serves to do is create even more competition for a limited number of grants, potentially pushing out organisations that are already doing good work. For horse businesses to become more viable with costs rising, there are so many other, better options to investigate but they mean we have to take a good, hard look at how our industry began and what it has become.


What about improving and updating our practice so that equestrian centres appeal to a more diverse range of customers? What if riding schools applied as much effort to ensuring that they have social licence to operate as procuring a riding establishment licence from their local council? How many business owners in our industry take advantage of the EDI and trauma informed practice training for their employees, so that they can create more welcoming and inclusive spaces for everyone? What about investigating less costly methods of keeping horses such as increased turnout or group housing (which often have the knock-on effect of improving welfare and social perceptions of our industry)? What about diversifying services in the same way that many farmers successfully have? Almost two thirds of farmers have already diversified according to Defra. 90% say that their diversification has been financially successful 63% see their diversification to be either ‘vital’ or ‘significant’ to the financial viability of the farm. How about we really look at the poor safety record that our industry has rather than bemoaning rising insurance premiums? Or, and this might be a galling thought for many, what about taking a moment to reflect on how we got to this state in the first place? For far too long equestrian employers have gotten away with underpaying their employees. The cold hard truth is that ours is an industry based on exploitation where the have-nots (often young people from low-income families who will do anything just to spend time around horses) work hard and remain unprotected by law so that the haves can enjoy their hobby?

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