Part of Catz Club loan written off

Futurebuilders has written off part of the £1.8m loan it made to the after-school childcare charity Catz Club.

Catz Club: Confidentiality agreement
Catz Club: Confidentiality agreement

The 2007/08 accounts of the company, which invests public money in voluntary groups hoping to deliver public services, show £1.2m as "provision against underperforming investments".

A Futurebuilders spokeswoman said the figure related to unrepaid loans from five organisations, including Catz Club, which trades as Schoolfriendetc.

"It is already public knowledge that we have terminated our investment in Catz Club, so we feel we are able to confirm this without compromising our duty of care," she said.

"In March this year, we signed a confidential deed of settlement with Catz Club regarding the termination of their investment, and have since made the decision to no longer pursue them for further repayment.

"As such, the outstanding amount from this investment will appear in next year's accounts as a write-off."

The Catz Club loss is also included in a separate figure released last week by Futurebuilders, which shows that £1.8m has been written off since it opened in 2004. A year ago, the figure was £763,000.

Because of the confidentiality deed, Futurebuilders declined to say how much of the 2005 loan to Catz Club was being written off. The charity has also declined to comment.

The deed was signed by the previous management of Futurebuilders, which lost the contract to the Adventure Capital Fund in April.

Jonathan Lewis, chief executive of Futurebuilders, said his board would discuss confidentiality agreements, but his view was that they should not be made unless there was a "compelling commercial reason".

Greg Clark, until recently the shadow charities minister, has said: "I'm not happy with the situation. We need to know much more about what happens to public money."

A spokesman for the Office of the Third Sector said it was not consulted about the agreement.

"We support current Futurebuilders policy - to be open and opt for confidentiality only when there is a strong commercial reason," he said.

Catz Club was recently told by the Charity Commission to take back an unlawful £7,500 donation to the Labour Party (Third Sector Online, 5 September)

Its accounts ending September 2007 are overdue by three months. Its previous accounts showed income of £850,000 and expenditure of £4.25m.

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