Considerations when setting our budget and the ARF

14 October, 2021 by Terry Babbs

When Council meets next week (21 October) we will make important decisions about the GDC’s budget, reserves policy and Annual Retention Fee (ARF) levels for 2022. The GDC’s Council will act collectively to be assured that the decisions we take are based on robust forecasting of priorities, risk and uncertainty.

As Chair of the GDC’s Finance and Performance Committee, my role includes challenging and monitoring the Executive Management Team on financial and other performance. I therefore have a particular interest in the setting of the GDC’s budget and ARF, as well as the development of the Costed Corporate Plan (CCP) for 2022-2024, which is, in effect, our workplan for the next three years. 

I wanted to explain some of the factors will that help inform our decision-making.

Our core purpose is public safety and confidence

However, our decisions also consider the uncertainty and risk to our income and costs, especially as nearly all our income comes from the ARF, which is directly linked to the number of dental professionals on our registers.

We know that the impact of the pandemic on dentistry has been severe, and recovery of dental services will take time. This may have an impact on the number of dental professionals who renew their registration in future years. While these numbers remained stable last year, we need to consider the risk that people may decide to leave the profession, if the recovery of dental services is slow. 

We also need to consider the wider economic changes as the UK economy recovers, and the risk of increased inflation.   

Planning our priorities for the next three years

The process is that we agree what the GDC needs to do to achieve our statutory duties, which is our strategy; work out how we can do that as effectively and efficiently as possible, and then determine what resources that will need and what that will cost, which gives us our CCP and budget. This, in turn, leads to the income necessary to deliver the plan and the ARF that is needed to collect that amount of income.

Over the last 18 months, we have identified and made savings where we can, and we will continue to look for new ways to increase our efficiency going forward. However, as we, society, and dentistry recover from the pandemic, I anticipate that we will have a bigger work programme than in previous years, and a higher budget in 2022 than in 2021. 

Explaining our levels of reserves

We will review our reserves policy which describes the different types of reserves and how we are able to access them. When Council meet next week, we will consider whether our levels of free reserves are within the levels set out in our reserves policy. We need to maintain these at a certain level to ensure we are able to meet our statutory obligations of ensuring patient safety and public confidence in the professions we regulate.
Finally, when Council have made their decisions, we will communicate them shortly after the Council meeting on 21 October. This will include an update from Gurvinder Soomal, Chief Operating Officer at the GDC, who will explain in more detail what Council have decided.  

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