Staff at Oxfam GB are facing further job cuts as the charity attempts to address a £16m black hole in its accounts, according to a leaked memo to staff.
In the memo, featured in The Times newspaper today, Danny Sriskandarajah, chief executive of Oxfam, said core costs would have to be reduced to meet expected deficits over the next two financial years.
Oxfam had an income of £434.1m in the year to 31 March 2019, an increase of almost £7m on the previous year and significantly above the charity’s £397.5m spending in 2018/19.
But the memo says the charity faces a £7m deficit in 2019/20 and a further £9m deficit in 2020/21 unless it takes action.
It is understood that the fallout from the Haiti safeguarding scandal, when seven members of staff resigned or were sacked after revelations of sexual misconduct in the wake of the 2010 earthquake, is not the primary reason for the financial problems.
In a report published last year by the Charity Commission the charity was found to have mismanaged the situation and was criticised for failing to tell the regulator the full extent of the Haiti allegations at the time they occurred.
The charity withdrew from applying for new government funding in the wake of the Haiti crisis and cannot apply for further funding until the government is satisfied with its safeguarding practices.
Instead, it appears that pressures on fundraising and other cost factors are leading to the financial shortfall.
The memo says Oxfam shops’ best performance in eight years was not enough to solve the financial challenges the organisation faces.
The charity cut about 100 jobs in 2018 in the wake of the Haiti crisis, and this would be the second round of job losses in the past two years.
The charity said it was too early to say how many staff would be affected in the latest round of cost-cutting.
About 2,000 people work at Oxfam in the UK, with a further 3,000 based overseas.
A statement from Oxfam said: “Our chief executive announced in April last year that Oxfam would be conducting a strategic review of our operations to ensure that we adapt to a changing world, live our values and are as effective as possible in fighting poverty over the next 10 years.
“The current challenging environment for charity fundraising and cost pressures mean we are accelerating that process, and we have informed staff. We are currently working through the details and will make an announcement in due course.”