Former major NCS provider charity to be dissolved owing more than £3m to creditors

The youth charity The Challenge is set to be dissolved owing more than £3m to its creditors, documents show.

Hundreds of other voluntary organisations will lose out on money owed to them, two and a half years after The Challenge went into administration.

The latest financial details, filed today by the company in charge of liquidating The Challenge’s assets, show that creditors were repaid £4.7m between May 2020 and May 2022, well short of the total £7.9 owed to unsecured creditors when the charity collapsed in 2019. 

The liquidator, RSM UK Restructuring, said in its latest update: “We have now distributed all the available funds and there will be no further dividends paid.”

The list of unsecured creditors published in 2020 ran to 49 pages and included hospice charities, local Age UK charities, libraries and community centres.

The documents showed that unsecured creditors received payments in two instalments, which in total repaid 63p for every pound owed.

The Challenge had been the biggest provider of activities for the National Citizen Service, but went into administration in November 2019, blaming the NCS’ decision to withdraw from a £60m contract. 

It sued the NCS Trust, which manages the NCS, for £26m over breach of contract in October 2019 . Bill Roland, then chair of trustees at The Challenge, described the saga at the time as “nothing short of national scandal”.

In April 2020 it was announced that the NCS Trust had paid £2.8m to The Challenge to resolve the dispute without any admission of liability. 

The latest documents show that this money was then used in part towards repaying the charity’s creditors.

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