Catch22 income declines by nearly £13m

The social care charity, whose income fell from £59.6m to £46.8m in the year to August 2016, puts this down to getting less grant funding and other voluntary income

The income of Catch22 fell by almost £13m last year because of a fall in grant funding from national and local government, its latest accounts show.

The accounts, published on the Companies House website last week, show that Catch22 had an income of £46.8m in the year to 31 August 2016, compared with £59.6m the previous year.

The accounts say that this was due to a fall in grant funding and other voluntary income as a percentage of Catch22’s total income, which the charity says reflects its strategic plan to become a social business delivering public services.

But the accounts also say that because grant funding and voluntary income "tend to be paid in advance" the changes have "resulted in pressure on working capital which has seen cash balances decline to an overdraft position".

For example, the amount that Catch22 receives to help run parts of the National Citizen Service fell by £6.2m in the year covered by the accounts, with the charity now receiving £4.2m for delivering the programme.

Catch22 provides services including mentoring, offender management, support for people with substance misuse issues and apprenticeships.

The accounts say that the charity’s cash flow has also been hit by payments from national and local government moving from a monthly to a quarterly basis.

Catch22 spent £49.5m in the year covered by the accounts, £1.9m of which related to the use of restricted reserves.

But the charity’s investment portfolio grew by 11.7 per cent and was valued at £10.5m on 31 August 2016, according to the accounts.

Chris Wright, chief executive of Catch22, said that its overall performance was strong despite the fall in income.

He said: "Our accounts show a stable, well-funded organisation with a strong balance sheet. Some years – like last year – we’ll receive very large one-off sums, particularly when we convert academies or are awarded innovation grants to test out new ways of delivering public services.

"Look beyond that and you’ll see us pursuing our social business strategy, reducing our reliance on voluntary income by moving to more sustainable income sources.

"The team’s done a great job: in 2013 voluntary income made up 26 per cent of Catch22’s income, but in these accounts it is a far more sustainable 10 per cent. It also means we can have confidence in our forecasts, with a 2016/17 forecast of £52m."

He added: "Today, contracts fund our delivery and we use strategic grants and partnerships to fund our reform programmes. It’s a model that means our service users are protected and we can focus on our end game of reform."

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