Norfolk County Council has made a one-off payment of £700,000 to reduce the pension deficit of the county's Age UK branch in order to secure the charity's future.
In August 2013, the county council's cabinet agreed to decommission a respite care service called Herondale in Acle, just outside Norwich, run by Age UK Norfolk, because the service had been underused for a number years and the building required significant investment, according to Catherine Underwood, director of integrated commission at the council.
She said: "In making this decision, members were informed that decommissioning the service would have a major financial impact on the income of Age UK Norfolk, and – coupled with a pension deficit – the future of this well-respected charity that provides a valuable service in Norfolk was under threat. As a result, members agreed to make a one-off investment of £700,000 to the Norfolk Pension Fund to reduce the pension deficit facing the charity."
The payment, which was made into Age UK Norfolk's part of the Norfolk Pension Fund, was made on 20 November.
The fund is run by the council itself as administering authority, and its 75,000 members include people working for nine other local councils, plus employees of more than 100 schools and academies and 37 other private and third sector providers to the councils, according to the fund’s latest annual accounts.
Age UK Norfolk had an income of £3.1m in 2012/13 and employs 77 people, according to its entry on the Charity Commission’s online register.
Underwood said: "This arrangement made financial sense for the county council because it enabled yearly recurring savings of £311,000, freed up the Herondale site for potential alternative uses and protected the future of a Norfolk charity that offers vital support to both the voluntary sector and the county council."
Tom FitzPatrick, leader of the Conservative opposition on the council, said the Conservative councillors had opposed the decision. He said: "The Labour-Liberal cabinet, in coalition with Ukip and the Greens, gave away the money with no public discussion, no business plan and no formal application from the charity. This information was buried at the end of a report about ending respite provision at Herondale.
"That this money was a gift at a time when a number of excellent charities supporting vulnerable people have faced reductions in grants or business from Norfolk County Council makes it that much worse".
A spokeswoman for the council said the issue was discussed "below the line" – meaning not for public discussion – because the reports on the service in Acle "contained exempt information".