The income of the local infrastructure body Navca dropped by more than half to £1.2m last year because several grant-funded projects came to an end.
The charity’s accounts for the year ending 31 March 2014 say that it ended the period "in good financial shape but with considerable challenges ahead" after what was "a financially challenging year".
Navca’s income fell from £2.6m in 2012/13 to £1.2m in 2013/14, resulting in a deficit of £227,000. This compares with income of £1.8m in 2011/12 and more than £3m in each of the two years before that.
The fall in income occurred mainly because of a reduction in grant and project income from £2m in 2012/13 to £549,000 last year. The largest project to end in 2012/13 was the Department of Health’s Building Health Partnerships programme, for which Navca was given a one-off grant of £1m. Grants from the Big Lottery Fund, the Home Office and the Esmée Fairbairn Foundation also ended.
Navca’s strategic grant from the Office for Civil Society – which had declined from £259,000 in 2012/13 to £173,000 in 2013/14 – also came to an end in the year.
The report says: "We end the year in good financial shape but with considerable challenges ahead, not least the ending of our strategic grant from the Office for Civil Society, which represents a significant reduction in our unrestricted income.
"We are well aware that as resources diminish we cannot assume business as usual, neither for Navca nor our members. That is why we initiated the Independent Commission on the Future of Local Infrastructure."
The commission’s report, released in January, said that infrastructure organisations must adapt to a changing landscape, but that many were too busy coping with their own problems or hoping the good times would return.
The organisation’s expenditure also declined substantially as a result of the grants ending, from £2.6m to £1.4m. The organisation had total unrestricted reserves of £1.2m at the year’s end.
Navca employed 17 people in the year, a decline of one and a half full-time equivalent staff since the previous year, and a substantial decline since it employed 37 people in 2010/11, before making substantial redundancies the following year.
Navca has about 250 members. The report says membership fees were frozen during the year "because Navca understood the financial pressure members faced". Income from membership fees fell by £4,000 to £74,000.