News

£12m service delivery charity to be subsumed by local authorities

Governance | Tania Mason | 5 Jan 2011

Connexions Staffordshire, a £12m-turnover charity that until recently employed 330 staff, is to be wound up and its services absorbed into Staffordshire County and Stoke-on-Trent City Councils.

The charity provides advice, information, guidance and personal development support to young people and adults in Staffordshire. It works in every secondary school and out of other premises, with groups including young people with learning disabilities, teenage mothers, young offenders and care leavers.

The councils believe they can provide these services more efficiently by bringing them in-house.

Connexions is due to publish its 2009/10 accounts by the end of January but these are not available yet.  The previous year’s accounts shows that the charity has shouldered five years of “standstill funding” and struggled to handle the transition from direct grant funding to contracts.  Despite making significant savings from a premises review and renegotiation of supply deals, which enabled the Connexions service to beat its budget, the financial result from other contracts, particularly those based on securing sustained employment for clients, was well below budget and the charity finished the 2008/9 year with a £809,000 operating loss.

The tough economic climate also affected the charity’s pension fund assets, and its total pension deficit at the end of March 2009 was £5.1m compared with £1.3m the year before.

According to Phil Potts, deputy chief executive, the charity now employs around 180 staff, down from 333 in March 2009.  A staff consultation is underway and some employees are expected to transfer with the services into Staffs and Stoke councils.

Potts told Civil Society that the charity learned last summer that its area-based grant would fall from £8.3m to £6.2m.  Connexions’ other income is derived mainly from Next Step and JobCentre contracts with BIS and DWP, and Potts said it was currently in talks with those departments about the future of those services.

In-house delivery 'more economical'

He said he understood the trustees’ decision to wind up the organisation on 31 March 2011 was driven by the ongoing financial pressures it faced. “They believe they can deliver it more economically in-house,” he said.

Staffordshire Council confirmed this was the case. Cabinet member for communities and culture Ben Adams said: "Staffordshire County Council is currently working with Connexions to help the organisation and its staff move towards an even closer working relationship with Staffordshire Young People's Service. We are determined to deliver an excellent service offering information, advice and guidance to all young people in Staffordshire. We are confident that the continued integration of services for young people will allow us to concentrate resources on frontline service.

"Staffordshire County Council is an efficient organisation that can absorb many of the costly administration and financial pressures that Connexions have faced. Our primary objectives are to ensure that every school leaver is equipped with the skills to make good decisions about their further education and training, and that individuals needing extra personal support continue to receive it."

The charity was founded in January 2002 by the two councils and in September 2009 its constitution was amended to pass control to its founder members.  That same month the trustees resigned en masse to make way for a new board entirely comprised of councillors and employees of the two councils.

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