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The CBI has secured its short-term future with fresh funding to help plug a financial shortfall after dozens of members quit the UK’s largest business lobby group in April following allegations of rape and sexual harassment.
The employers’ organisation cited “short-term cash flow challenges” behind its decision to postpone last week’s annual meeting less than 24 hours before it had been due to take place.
The self-styled “voice of business” had been racing to raise £3mn of funding through bank loans and member contributions to see it through to the start of 2024, according to people familiar with the matter.
Some of the UK’s biggest corporate names, including Aviva, BP, KPMG, Tesco and NatWest, left the CBI after allegations of rape and a toxic work environment, leading to a sharp drop in subscription income.
“We are satisfied that we have secured the financing necessary to overcome the short-term cash flow challenge and that the organisation remains in a strong medium to long-term position,” the CBI said on Sunday.
It did not provide details of the amount or sources of the new funds. Finalisation of the funding was first reported by the Sunday Times newspaper.
Its longer-term financial position will be determined largely by the number of members that renew their subscriptions when they become due. It has already been forced to cut its wage bill by about a third, achieving some of the savings through redundancies.
The crisis had pushed the CBI to enter talks with Make UK, the trade association for manufacturers, over a possible merger. Those talks have been put on hold now that the CBI has stabilised its financial position but could be revisited in the coming months.
The CBI said the two organisations had “very positive discussions and a viable option exists for closer collaboration in the future”.
“Both parties remain in close and regular contact and will review the situation when appropriate to do so,” it added.
Make UK declined to comment. It said earlier this month that it was in “early-stage discussions” with the CBI “to explore how the two parties might work closer together”.
In a webinar to update members this week, CBI leaders projected a “back to business” approach, according to people who attended.
Rain Newton-Smith, the CBI’s new director-general, plans to attend the upcoming political party conferences and the group said she would have “a busy schedule meeting key political stakeholders” and would meet “C-suite level members” and take part in panel discussions.
The CBI is set to be represented at next week’s Conservative party conference in Manchester in panel discussions and roundtables with City minister Andrew Griffith, science minister George Freeman and energy efficiency minister Lord Martin Callanan, according to a person familiar with the schedule.
Newton-Smith is also scheduled to meet the chancellor ahead of his autumn statement, similar to leaders of other large business lobby groups, said people briefed on the matter. She is also expecting to meet shadow chancellor Rachel Reeves, according to people briefed on the matter.