Action for Children spent £1.3m on more than 100 redundancies last year

Most of the cuts relate to staff who were made redundant as a result of lost contracts with local authorities

Action for Children annual report
Action for Children annual report

Action for Children spent almost £1.3m making more than 100 staff redundant last year.

The charity’s accounts for the year to 31 March 2017, published on the Companies House website this week, show the amount spent on redundancy payments during the year doubled from £638,000 in 2015/16.

A spokeswoman for the charity said a total of 103 staff had been made redundant over the course of the year.

The charity spent £1.1m on costs relating to 92 staff who were made redundant as a result of losing contracts with local authorities across the UK.

Carol Iddon, managing director for children’s services at Action for Children, said: "In the current financial climate, local authorities are making very difficult decisions about what type and size of services it can afford.

"Charities and other organisations such as ourselves are taking a closer look at their infrastructures to ensure resources are deployed as much as possible to frontline delivery. In our case to making children across the UK feel safer and happier."

She said that £168,000 of the £1.3m redundancy payments were due to a restructure of the charity, which had resulted in a further 11 staff being made redundant.

The restructure resulted in five regional teams being created – one each in Scotland, Wales and Northern Ireland and two in England – and was introduced in April 2017.

The majority of staff affected by the restructure of the charity had been redeployed elsewhere, the spokeswoman confirmed.

Iddon said: "By delegating authority and streamlining cross-functional teams into five regions we’ve reduced costs in ways that support team working, decision-making, partnership and management and, crucially, the different needs of children across the country.

"We face serious challenges ahead, therefore it’s critical our business model adapts to ensure we effectively reach and engage with the children, young people and families across the UK who need our services."

The changes resulted in the amount spent on wages and salaries at Action for Children falling from £86m to £85.1m. The charity employed an average of 5,013 people over the course of the year, the accounts show.

Total income at the charity was £152.8m, down from £160.8m the previous year, while expenditure also fell from £157.1m to almost £150.2m in the latest accounts.

The accounts say that the fall in income is partly because of the "economic climate" in the UK.

"The success of consistently meeting our operational budget for three years gives us the resilience to achieve more for the disadvantaged children we support," the accounts say. 

"However, although the operating budget has been a small surplus or deficit, the trend is of reducing income. We cannot change the economic climate and large cuts in local authority spending, so we need to find different ways of funding our work."

The charity’s accounts have also provided an update on the services it has taken on from the charity 4Children, which collapsed in September

In the accounts, the charity said it had taken on 50 nurseries which were being run through Action for Children Developments Limited.

The company made a profit of £372,000, which will be paid to Action for Children under Gift Aid, the accounts say.

The accounts also show a £10m loss on the charity’s pension liability, compared with a £29m gain the previous year.

This means there is a pension deficit of £14.8m in the latest accounts, compared with £12.6m the previous year.

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