CBI: Scandal-hit organisation secures emergency funding

The CBI has secured emergency funding from a number of banks to stave off a potential collapse after a series of scandals.

The business group reportedly sought to raise £3m and was recently forced to cancel its in-person annual general meeting due to cash issues.

On Sunday, it said it had "secured the financing necessary to overcome the short-term cash flow challenge."

After misconduct allegations emerged, firms and organisations left the group.

The Guardian newspaper's investigation revealed allegations of sexual harassment and two alleged incidences of rape at the lobby group.

In response, the CBI set out a number of reforms and members overwhelmingly backed it in a key confidence vote about its future.

But it is largely reliant on membership fees to fund its operations.

Well-known companies such as BT suspended their memberships in the wake of the investigation, raising questions over the group's future.

After failing to persuade its remaining members to provide the funds it needs for the next year, it has secured a type of funding which essentially works like an overdraft, from a group of banks, the Sunday Times first wrote.

Those providing the funding reportedly include HSBC, NatWest, Lloyds Banking Group and Barclays.

On Sunday, a spokesperson for the CBI said they are "satisfied" that the "organisation remains in a strong medium to long-term position."

Earlier this month, the group - once described as "the voice of business" - had to cancel the in-person portion of its annual general meeting over cash flow problems.

It went ahead with some online events, including "an audience" with its president Brian McBride and Rain Newton-Smith, its former chief economist who returned to take the helm as director-general as it fought for survival.

The CBI recently said it would have to make job cuts in order to slash its wage bill by a third. In its most recent public accounts, for 2021, the CBI reported income of £25m, of which £22m came from membership fees.

That is expected to fall for the current financial year after a number of companies quit the lobbying group or let their memberships lapse.

It previously claimed to represent as many as 190,000 firms, although the number listed on its website now stands at 170,000.

Not all of these are direct members - the number of which is thought to be substantially smaller.

The lobby group works with trade associations which represent thousands of firms as well.

Ms Newton-Smith told the BBC in June following the crucial membership vote: "We know we're going to come out of this a smaller organisation but... I want to work on all those members who maybe have left.

"We're going to come out and focus on the really important issues of the day."

This week it will set out the hopes of the firms it represents ahead of the chancellor's Autumn Statement in November.

The government initially paused any activity with the CBI after the allegations came to light but Ms Newton-Smith will meet Jeremy Hunt after the Conservative party conference takes place.

She will appear on several panels at the conference, and have a round table meeting with City minister Andrew Griffith.