The number of people employed by Save the Children UK fell by more than 500 last year following the closure of programmes in Pakistan, its accounts show.
Save the Children UK’s annual accounts for 2016, published on the Companies House website this week, show that the average number of people employed by the charity fell from 1,707 in 2015 to 1,209 last year.
A spokesman for Save said the fall was mainly due to the closure of programmes in Pakistan run by the international health charity Merlin, which Save took over in 2013.
He said that by 2016 all of Merlin’s country programmes had moved to Save except its operations in Pakistan, which Merlin’s trustees decided to close in April 2016.
This resulted in 607 job losses, he said, mostly working on programmes that were no longer being run.
Despite the fall in staff numbers, Save's staff costs rose from £48.5m in 2015 to £53.1m last year.
The Save spokesman said the rise in costs was due to a "combination of the closure of the last remaining Merlin country programmes and recruitment of new staff in the UK, where new hires are typically recruited at higher wages than existing staff".
The staff costs included £464,000 in redundancy payments over the course of 2016, which the spokesman said related mostly to "severance costs for staff who had transitioned to Save the Children International from Save the Children UK and Merlin, restructuring in UK programmes and programme partnerships divisions".
The accounts show that the charity’s income rose from £389.7m in 2015 to £404.5m last year. Spending rose to £410.1m in 2016, an increase of £28.2m on the previous year.
Income from donations and legacies was down almost £8m to £119.6m, but income from charitable activities was up from £249.3m in 2015 to £270.8m last year.
The accounts note the Fundraising Regulator’s investigation into Save and other charities after the fundraising agency Neet Feet was accused of bad practice by The Sun after an undercover investigation.
The regulator concluded that Save and other charities had not employed all reasonable efforts to ensure that Neet Feet fundraised in compliance with the Code of Fundraising Practice..
The annual report says the charity terminated its relationship with Neet Feet as soon as it became aware of the newspaper’s findings and had acted on all the recommendations from the Fundraising Regulator’s report.
The report says the charity is managing a deficit of £39m in its defined-benefit pension and growth plan schemes, but is making annual contributions of at least £4.6m until 2023 with a view to closing the shortfall.
Justin Forsyth, who stood down as chief executive of Save the Children UK in April 2016, would have been the highest-paid individual had he worked the whole year, the accounts show, on an annualised salary of £149,865.
Kevin Watkins, who took over as chief executive in September 2016, was being paid the equivalent of £143,000 a year, the accounts show.
The charity employed 55 people on salaries of more than £60,000, up from 39 in 2015.