A Special Meeting of the Institution of Mechanical Engineers was held on 21 May 2018.
Eligible members have been sent their voting packs which contained details of the Special Meeting and gave more information about the Institution’s finances in order to allow members to make an informed decision about which way to vote.
It is important that the real facts are known and that the future work and direction of the Institution is discussed with as many members as possible. To support this process two webinars were held with Trustees and the Chief Executive, on Thursday 10 May at 16:30 BST and on Friday 11 May at 10:00 BST.
We also want to take this opportunity to answer some of the common queries members have about the meeting and to correct some of the inaccurate and misleading information being circulated about the Institution during this process.
You can find these in our Questions & Answers section which we will continue to update in the run-up to the Special Meeting to answer the queries we are receiving most often.
For more information and any other questions please email us at email@example.com.
Facts at a glance
Your Trustee Board is committed to communicating openly with Members and is concerned that the allegations contained in Motions 2 to 6 of the Special Meeting are incorrect and are damaging to the Institution.
- In 2017, the net worth of the Institution grew by £1.4m
- Over the last ten years the Institution’s reserves have grown from £20m to just over £30m
- Over the last ten years our membership has risen from 79,000 to 120,000
- Over the same period our membership subscription income (our main source of income) has risen from £6.8m to £11.3m
- We have recorded the most registrants with the Engineering Council of any Professional Engineering Institution in each of the last six years
- Over the last five years our registered membership has grown by 13%, (ICE managed 6% growth and IET dropped by 5% in the same period)
- Our commercial businesses (our second largest income source) had a bad year in 2016 with a substantial loss but returned to break even in 2017 and are returning to good surplus in 2018.
The financial stability of our Institution
Our Institution remains in good financial health. On behalf of our members, we are focused on growing our reserves and income in the long-term to sustain our vision of improving the world through engineering.
Growth in our reserves
Over the last ten years Institution reserves have grown from £20m to just over £30m. In 2017, our net worth grew by £1.4m. Reserves have remained stable but on a broadly upward trajectory since 2010 and the sale of the publishing business, reflecting the Trustees focus on financial prudence and long-term stability.
Growth in membership and subscriptions
Membership subscriptions are our main source of income. Over the last ten years we have grown to become the leading Institution for Professional Membership with almost 30% of all new registrants across the 36 Engineering Institutions now joining the IMechE. Over the same period our total membership has risen from 79,000 to 120,000. This has resulted in a rise in our subscription income from £6.8m to £11.3m.
Our commercial income
Our second biggest source of income to support the work of the Institution comes from our trading activities. Prior to 2010, this income came almost exclusively from publishing. In 2010, we sold our publishing business due to changing market conditions and falling revenues. We have since invested the proceeds of this sale to diversify our trading activities in learning and development activities for engineers and in other areas as shown in the diagram below:
The purpose of our commercial businesses has always been to generate a profit to subsidise the activities of the Learned Society. However, in 2016 we made a substantial loss. This was due to exposure to the downturn in the oil and gas industry, delays to the UK nuclear programme and our decision to liquidate Amber Train.
Despite these recent challenges, the overall picture for our commercial businesses is an increasingly positive one. In 2017 we returned to breakeven in our trading with turnover of £7.3m, marginally up from £7.2m in 2016 and we are confident of a return to good surplus to support the Institution in 2018. Even taking into account the losses incurred in 2016, the average annual return on investment in our current trading companies is 9%.
Growth in investments
We continue to invest in early stage innovation companies through our Stephenson Fund, to meet our charitable aim to promote invention and innovation in engineering. We have now invested £1.4m in nine fledgling companies, currently showing a 32% gain (16% p.a.). The bulk of our other investments in our reserves showed an annual rate of return last year of between 8.2% and 13.2%.
The Trustees are aware there has been some speculation about the liquidation of this business so we would like to set out the facts surrounding this.
A fraud, which had been ongoing prior to our acquisition of this business, was detected by new management brought in by the IMechE. There was no alternative but to place Amber Train into liquidation, however the liability has been capped through the liquidation and any ongoing expenses will be in respect of seeking compensation from the original owners of the business
The Institution follows a robust process of due diligence for all of its acquisitions. However, in light of this experience we are examining our procedures to ensure we do all we can to minimise such risk in the future.
For individuals impacted by training with Amber Train, please be assured that their situation is a real concern and the Institution will do its best to assist any genuine cases of hardship.
IMechE remains the fastest growing of the major Professional Engineering Institutions and our registered membership across all grades has grown in the last five years by 13% compared to 6% in the ICE and a drop of 5% in the IET. We are proud of this achievement and that more engineers continue to value what we do.
The number of new elections the Institution recorded at the Engineering Council rose by 1.7% to 2,818. CEng applications were strong surpassing 2,000 for the first time, and EngTech applications rising by 5%; our registered membership across all grades has continued to grow more in the last five years compared with other PEIs. Total membership exceeded 120,000, of which 55% were paying members.
Our international presence also grew strongly. For the first time, the numbers of international members exceeded 25% to reach 31,245. In 2017, we elected 8,131 members of which 1,380 were new paying members, 4% more than in 2016 with particularly strong growth seen in India (9% increase).
Engaging with our Members
The activity of our volunteer members remains the lifeblood of the Institution and our membership was incredibly active in the UK and around the world in 2017.
Member-organised events are the epicentre of this activity. In 2017, the Trustee Board endorsed a small reduction in the number of events held in the UK, but a greater focus on the relevance of our events to members saw the number of delegates attending increase by 10% to 43,000.
The subsidies of each Division and Group have also been more fairly distributed to reflect the size of their respective programmes and the engagement they deliver.
The breakdown of our spend (chart below) reflects the Institution’s focus on investing our subscription income cost effectively and on those areas that our members tell us they value most:
To help future-proof the organisation, the Institution undertook a significant restructuring in 2017 to prepare for enhanced digital working and streamline the organisation. Creating a new membership operations directorate to deliver all member-facing operations and combining our events, training and library services to integrate the professional development proposition is allowing us to deliver a more responsive, focused and integrated service for our members.
This restructure is underpinned by a three-year, £3m investment in transforming the Institution’s digital capability.
These changes will ensure the Institution can provide the Learned Society functions for our global membership, but more flexibly and cost-effectively.
We are committed to modernising our profession. Engineering is facing challenges and technology advances on an unprecedented global scale. We can only meet these challenges through substantial investment in our future and by working much more closely with other institutions.
Working with our members, we have done much to transform the Institution over the last few years from an introspective body with a declining membership, to a thriving Institution with a growing international presence.
We seek your views and your support for Motion 1 in order to continue this important work.