The National Society for Epilepsy has closed two of its care homes and instigated an urgent strategic review of its services in order to plug a projected £1m shortfall this financial year.
The crisis has come about following the rejection by the Office of the Deputy Prime Minister of a planning application appeal. The charity had hoped to raise £30m by selling 22 acres of its 330-acre green belt estate in Buckinghamshire, and then use the money to redevelop the site to provide 152 modernised bed spaces.
But after the ODPM rejected the planning bid in late November, the charity was forced to close two residential homes on the site, affecting 24 residents, and now predicts huge losses in its care and assessment services.
Harold Porter, chairman of the National Society for Epilepsy, said: "Many charities providing residential services in the UK are facing huge problems juggling ageing properties, pension fund problems and recruitment issues. NSE is no exception and has very real problems, which it is seeking to address dynamically and creatively."
David Joseph, who sits on the strategic review panel that will report in March, said the biggest difficulty was squeezing money out of local authorities. About 80 per cent of NSE's £18m income comes from 75 local authorities, but negotiations over fee increases have become increasingly tough in the past two decades.
"Social care is a sector that is bumbling along in crisis," said Joseph.
"Huge numbers of facilities need updating, and local authorities do not have the funds to pay for them."
The review will explore how the charity can work to provide innovative services that can become "a benchmark for epilepsy care in the UK". It will also examine whether local government can continue to fund its specialist care.
The charity hopes to relocate the 14 homes in Buckinghamshire to smaller sites across the country, but members are doubtful this will address all of its financial difficulties.
"The NSE is going to have to change considerably in the next couple of years if it is to survive and then thrive," said Porter.
"All of us connected with the charity are determined to build a truly national organisation and use the planning rejection as a catalyst for change."