President Rupert Middleton said that the results "were particularly disappointing considering we had got the finances back on an even keel before".

The federation reduced spending by £1.5m over the year, according to finance director Michael Gardner, but this didn’t match the £1.7m fall in revenues.

In spite of the loss, Middleton said it was commendable that, before the £299,000 exceptionals for headcount and the final salary pension costs, the BPIF produced an operating profit of £44,000 (down from £463,000 in 2008).

"The issue of financial stability has dominated the agenda for the past year," he added. "Few people anticipated the depth of the downturn."

All three sources of income – membership, commercial and training – showed a decline, with commercial income falling the most at 29%.

Headcount reduction was centred on back office roles to ensure a "focus on frontline services".

For 2010, revenues are projected to rise to £6.5m, as Dotgain and Eco London activities come on stream, but with the expectation that membership and other commercial revenues will flatline.

A bright spot in the results was the reduction in the pension deficit and a reduction in the Pension Protection Fund Levy for the next year.

Middleton added that, due to its strong cash position thanks to the sale of investments and properties before the recession, "we’re leaner and fitter than most trade bodies, so better placed to face the future".

The BPIF also revealed that Andrew Pindar has been appointed as the next vice-president.