Written evidence submitted by Ocean Youth Trust South

 

Ocean Youth Trust South and COVID-19

Submission to DCMS Committee

 

Introduction

 

Ocean Youth Trust South is asking the committee to consider the impact of COVID-19 on small charities where the nature of our charitable work – bringing young people together for residential activities - means that all operations have had to cease for the duration of the crisis.

 

Summary

 

Ocean Youth Trust South is a successful, award-winning charity facing huge financial losses as a result of COVID-19. To survive, the charity faces having to use designated reserves which were built up specifically over years of hard work in order to meet expected essential future expenditure. These funds may be irreplaceable so that survival this year comes at the expense of longer-term security.

 

The charity has a track record of highly effective work with young people, many of whom are exceptionally disadvantaged and vulnerable – and will be in even greater need once the immediate COVID-19 crisis is over.

 

Currently available financial support either does not go far enough or is focussed on areas for which Ocean Youth Trust South is not eligible.

 

Four key things that would make a difference:

 

 

Background

 

Ocean Youth Trust South is an award-winning charity founded in 2000 but growing out of the Ocean Youth Club which began in 1960. We use residential sailing voyages on board our 105-foot sail training vessel Prolific to offer personal development through adventure under sail to young people aged 11-25. The great majority of voyages involve young people who are disadvantaged or vulnerable, referred by clients such as local authorities, schools, youth groups and other charities. Voyages are designed to develop confidence, teamworking, resilience, communication and more, and are used by our clients as an intervention within longer programmes of work designed to make a lasting difference in the life of each young person.

An award-winning, successful charity

 

 

For an example of how sailing with Ocean Youth Trust South can change a young person’s life for good, see Appendix: JP’s story.

 

Impact of COVID-19 on clients

 

Rules on travel and social distancing make it impossible for us to offer voyages at present.

 

Ocean Youth Trust South’s voyages are designed to be a life-changing intervention for young people. Many are run in partnership with other organisations representing disadvantaged and vulnerable young people. Voyages already lost in 2020 include:

Impact of COVID-19 on the charity

 

The charity faces the loss of all our trading income for an extended period, and the likelihood of reduced bookings even if we are able to operate for part of the 2020 season. Predicted losses are approximately £200,000 this year.

 

We are normally close to fully-booked through a sailing season which runs from late March to the end of October. We are limited to a maximum of 15 young people on board and we cannot extend the season far into the winter when the weather is bad, so we have no opportunity to make up for losses with extra voyages or extra places at a later date.

 

The savings available from not running voyages are modest – simply things like food, fuel and harbour fees.

 

The two biggest expenditure items for the charity are salaries, and maintenance and equipment for our vessel.

 

i)                     Vessel maintenance and equipment

 

A vessel refit costing just under £45,000 was completed in mid-March 2020. It is essential to keep the vessel and equipment maintained to a good standard, not merely to protect the value of our major asset but also because we have to pass an annual coding inspection before we are legally allowed to operate as a commercial vessel.

 

We have also paid £19,025 for insurance.

 

Maintaining and equipping the vessel is normally costed into the prices charged to our clients: we currently have no income to cover these costs.

 

Many costs are annual: the fact that we have just paid for servicing everything from engine to fire extinguishers does not reduce our obligation to pay for it all again next winter.

 

ii)                   Staff salaries

 

OYT South has six full-time and two part-time staff. Three full-time staff normally work on board Prolific and the others are shore-based.

 

The charity has furloughed two of the three seagoing staff but has kept on our Engineer who lives on board and can keep the vessel maintained. This is essential as sailing vessels deteriorate fast if not looked after.

 

We have furloughed two part-time shorebased staff and are looking at furloughing one of the full-time staff as well in the longer term. However, the remaining team members are busier than ever: liaising with clients, volunteers, donors and suppliers; paying bills; fundraising and more. And as we lose 2020 voyages it becomes more important than ever to work hard on 2021 bookings in order to avoid a second challenging season in a row. We have no trading income to cover those salaries.

 

The Employee Retention Scheme is only a partial help to us, as with many small businesses which need to keep some people working: under the scheme, staff are either furloughed and not working at all, or not furloughed so there is no help for that salary. Any small business which may be less busy than usual, but where staff roles don’t overlap, doesn’t have the option of cutting everyone’s hours and getting financial help for the hours they are not working. If a business has one maintenance person and one finance person, and still needs some maintenance and some finance work, the business can only choose between furloughing one, both or neitherit isn’t possible to put them both down to half time even though you need both their skills and some (not all) of their time.

 

iii)                 Financial impact

 

a)              Income losses

Even after cutting costs as much as we can, OYT South faces losses of around £200,000 this year. This is certainly true if we run no voyages but it is also likely if we operate for part of the season at well below our usual 99% sales: the increased costs of running the boat and bringing staff back from furlough roughly balance the income from operating at 50% capacity. This may be a reasonable estimate given that some clients are being forced to cancel and we have seen a collapse in new enquiries.

 

b)              OYT South’s reserves and the Prolific project

 

OYT South has reserves which were predominantly raised specifically to replace equipment on our vessel Prolific. Whilst Prolific is a new vessel to us, she is still 15 years old and over the next few years requires some very expensive replacements (e.g. main mast, engine, keel bolts). Knowing this, money was specifically raised as part of the Prolific campaign; we do not believe we would be able to raise these sums again, because the prospect of a new vessel caught the imagination and inspired our supporters in a way that ongoing maintenance never can. If this money was used to fund core costs during the COVID-19 emergency than this would threaten the continued existence of the charity in the longer term.

 

iv)                 Challenges looking ahead

 

a)      Grants available to support businesses and charities through coronavirus

We are using the government’s Employee Retention Scheme and we are looking at the Small Business Grant Scheme which may allow us to apply for £10,000. We have done an application for emergency funding from the Association of Sail Training Organisations.

 

However, all these things together do not amount to anything like the loss we face this year, and so far it seems we may not be eligible for a lot of other programmes currently being announced. The Chancellor’s announcement of £750 million for charities is explicitly aimed at ensuring “they can continue their vital work during the coronavirus crisis” and appears to exclude charities who have had to cease operations temporarily. The National Emergencies Trust and many other programmes that have been announced seem to have a similar focus. Charities currently unable to operate - even if they might have a key role to play post-crisis - are at risk of being overlooked.

 

b)      Re-starting operations

If restrictions are lifted on a sector-by-sector basis, we hope that the government will look at how the Employee Retention Scheme might continue to apply to businesses which still cannot operate even after other sectors have returned to normal. If sail training might not be among the earlier industries to resume operations, having to pay full salaries again before our trading income returns could have a catastrophic impact. We cannot easily lay off staff and recruit replacements later: it takes years of training and experience to become a sail training skipper, and there is only a handful of people in the UK with the ability to command a 105-foot sailing vessel while managing volunteers and delivering high-quality youthwork; and our client relationships are built on years of working together. We must keep our skilled and experienced staff.

 

c)       Future bookings

We are looking at a future in which many individuals and organisations have less money to spend, and funding for youth services – already badly hit by austerity – may be further reduced by economic pressures once the crisis is over. It may become harder to fill term-time voyages (two-thirds of our season) as schools could be reluctant to release pupils who have already missed weeks of education. Group leaders and teacher may err on the side of caution in promoting outdoor activities once it is safe to do so.

 

d)      Promotion of outdoor activities

On the other hand, the need for young people to engage in this sort of activity will be greater than ever. A generation which was already suffering higher levels of anxiety and mental health problems will have been cooped up for weeks, separated from friends, worried about school and exams, and will be heading for the start of adult life amidst extraordinary economic uncertainty and insecurity. Outdoor activities promoting confidence, teamwork, resilience and more will have a huge part to play in helping people recover from the social and psychological effects of COVID-19, to the lasting benefit of families, employers and communities as well as individuals.

 

Funding for outdoor activities could make a huge difference, but public backing from government and other agencies, promoting the benefits of these sorts of activities for young people, could be immensely valuable.

 

e)      Future donations

Many of Ocean Youth Trust South’s regular donors make grants using invested funds. A weakened stock market presents a real threat to future fundraising income.

 

 

 

 

Appendix

 

JP’s Story

 

JP first sailed with Ocean Youth Trust South in 2003.

 

In 2016, aged 27, he came on an adult day sail and told us his story.

 

JP was 13 when he left mainstream school, which he says had “written him off” because he couldn’t read and write. He suffered from depression and could see little hope for his future, and says “My mum was very concerned for me”. He started at a school that catered for his severe dyslexia – and which also sent him sailing with OYT South. He says he learned a vital lesson on that voyage: “You can do it on your own – just because you aren’t good at one thing, you can always find something else you CAN do.” He excelled at practical tasks and teamwork, and returned for three further voyages before leaving school.

 

As an adult, JP stills struggles with literacy – writing a cheque, he was stopped in his tracks by the word “fifty” and couldn’t even get close enough to the spelling to be able to look it up successfully. But he has an HGV licence and worked as a fuel tanker driver – a highly responsible job – before setting up his own fuel distribution company and employing his first member of staff.

 

He has managed to buy his own home, and he is a confident, happy and outgoing young man.

 

JP is convinced that his time with OYT South was the turning point in his life. He points to many things that made a difference:

 

 

 

 

 

 

JP tells his story in his own words here: https://youtu.be/p3MBkTZ61BU.

 

He now donates engine oil and antifreeze to Prolific every year.