Age UK spent nearly £3.5m on redundancies last year

The charity's latest accounts, for 2015/16, say this was an increase on the £789,178 of 2014/15

Age UK headquarters
Age UK headquarters

Age UK, the charity for older people, spent almost £3.5m on redundancies in the 2015/16 financial year, including more than £500,000 in payments to some of its highest-paid employees, its latest accounts show.

The accounts, which were filed with Companies House this week, show the Age UK Group spent £3.5m on redundancies in the year to 31 March 2016, compared with £789,178 in the previous year.

The accounts say the increase is due to the closure of Age UK Training and the creation of Age UK Trading CIC, which was formed after Age UK Trading converted to a community interest company on 16 July 2015.

A spokeswoman for the charity said that these changes resulted in a "significant reduction in headcount", which would be reflected in the accounts for the 2016/17 financial year.

But she was unable to give a figure for how many jobs had been lost. 

The accounts show that redundancy or loss-of-office payments worth £580,731 were paid to staff earning more than £60,000 a year, with payments to two former executive directors included in the figure.

The spokeswoman said the £580,731 was paid to a number of senior staff working on Age UK’s trading activities, and the redundancies of the two directors and several other senior members of staff were as a result of the restructure of its trading subsidiaries.

The accounts say the charity had income of £86.4m, down from £87m in the previous year, and expenditure of £80.8m, which was £4m less than in 2014/15.

The accounts highlight Age UK’s progress in addressing some of the recommendations made in April by a Charity Commission inquiry report on the charity’s energy tariff deal with the energy company E.ON.

The charity suspended its energy tariff with E.ON in February 2016 after The Sun newspaper claimed Age UK was selling a two-year, fixed-rate promotional tariff with E.ON that would result in pensioners typically paying £245 more than the firm’s cheapest rate for 2015.

In its report, the commission recommended that the charity should review its engagement with the energy market, carry out an immediate governance process review and have a "robust rolling review" of all products using the Age UK brand.

According to the accounts, the charity is improving the governance and transparency of the relationship between the charity and its Age UK Trading community interest company.

This includes: reviewing governance arrangements relating to Age UK’s oversight and control of its trading companies and activities; making the charity’s trading activity and how Age UK benefits from that activity clearer to customers; ensuring that Age UK Trading CIC’s trading partners follow best practice in dealing with vulnerable people; and fully embedding and communicating the Age UK customer charter.

The accounts say that progress so far includes the introduction of interim guidelines that are being applied to new marketing materials and the Age UK website, the establishment of a product review committee that will carry out rolling reviews of trading products as well as appraising new ones, and engaging with "expert support" to help with the governance review.

The spokeswoman confirmed that Cass Business School had been commissioned to conduct the independent review of the charity’s governance arrangements.

The accounts show that Age UK expects to complete the majority of the work needed to address the commission’s concerns by the end of the 2016/17 financial year.

In her introduction to the accounts, Dianne Jeffrey, chair of Age UK, says the charity decided to exit from the energy market because "a proposed price increase meant that we were no longer able to offer a suitable tariff".

The accounts also reveal that the charity has agreed to a proposal by the directors of Age UK Trading CIC to sell Aid-Call Limited, a wholly-owned subsidiary providing Age UK’s personal alarms service, to AXA PPP Healthcare. The charity has also entered into a new partnership with AXA PPP Healthcare to promote Age UK personal alarms.

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