"What's taken place is unfortunate"

Tony Mitchell, chair of Catz Club, talks to John Plummer about the troubled childcare charity's past, and its plans for the future

The chair of Catz Club, Tony Mitchell, says the charity's finances have "changed dramatically" over the past 18 months and that its next set of accounts will show a deficit of only £500,000.

"The charity is now almost self-sustaining," said Mitchell, whose multi-million pound loans have been Catz Club's main source of funding. However, the reduced losses have come at a cost: 150 of the organisation's 210 childcare clubs have closed, causing the loss of 20 full-time and 270 part- time jobs.

In his first interview since the charity's unlawful donations to Labour came to light, Mitchell admitted the charity had over-stretched itself by opening too many clubs shortly after it was founded in 2002. He also acknowledged other errors, particularly the political donation and the late filing of accounts, which he attributed to changing auditors.

"I will be demonstrating to the Charity Commission that these were unfortunate mistakes," said Mitchell, who has a teleconference with the commission scheduled for Wednesday as part of the regulator's formal inquiry into Catz Club.

He said he had no political affiliations and that the charity would have wanted to "showcase" itself to the Conservatives as well, had they been in power.

"What's taken place is unfortunate and some of it is self-inflicted, but we are providing a really good service," said Mitchell, who was born in Britain but now lives in the US. He runs the Warburg Investment Corporation, a factoring company which buys invoices from organisations at less than their face value, then collects the full sum.

He said both his parents were teachers and he wanted to give something back to the UK education system. At first he supported the now-defunct education action zones, which the Government set up to raise educational standards in deprived areas. But his philanthropic eye switched to Catz Club when he was impressed by the model established by the charity's founders, Amanda and Stephen Argent. "I have a real interest in helping raise educational attainment," he said.

He said his loans to the charity were interest-free, with no fixed repayment dates, and that because all the clubs were now "self-sustaining or close to it" the charity was no longer dependent on him.

So is he confident Catz Club will still exist in three years? "That's a tough question," he said. "We are going through unprecedented financial times, and it's too early to know the impact on the clubs."

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