Tania Mason interviewed Barry Aspland for her feature on service delivery charities in April's Charity Finance. This is the edited transcript of his comments.

The last few years have been challenging for every charity because of the austere economic environment and changes to the commissioning landscape. Despite these challenging conditions, Nacro was able to deliver a positive financial performance in 2013. We are confident we’re on track to do that again.  

Over the last few years we’ve focused on becoming more efficient at what we do internally and externally, for example, by centralising services and implementing a new management and delivery infrastructure.

It’s been about repositioning the organisation to allow it to build a stronger platform to build for the future. In that time we’ve also restructured from a regional structure to a centralised structure. That was the main catalyst for the majority of the exceptional costs incurred two years ago.

We bid centrally now. Previously we had five or six organisations that made up the group. Each region was its own individual autonomous entity, which was a bit inefficient. Each region had its own accounts department, HR department, and so on.  It didn’t really make sense, we weren’t big enough to be run that way. We’re now a single organisation with centralised support functions to service the business in its entirety across all of its business streams – housing, education, offender management and substance misuse. We’ve still very much got local delivery and a focus on local services, they’re just supported by centralised functions.  

That was the reason for the losses two years ago – also in 2010 we lost some central government grant funding.

We took a £10m hit on income two years ago, partly this was down to pressure on our Supporting People contracts but also we intentionally scaled down some of our education provision. Education had grown on a regional basis and when you looked at it holistically some of the sites didn’t make strategic sense. So again we took a step back and looked at it with fresh eyes and just decided some of those service delivery centres weren’t in the areas where there was most need. We’ve got around 200 contracts altogether and we did have 58 education centres but we closed the smallest ones where it didn’t make strategic sense to operate from and moved services to neighbouring areas. Now we’ve got 38 delivery centres. But when you close down a delivery centres there are inevitably closure costs.

That process is pretty much finished now, we’ll continue to monitor things to ensure we’re being as efficient and effective as we should be, but the majority of closures have already happened.

We’ve also entered new markets, for example, substance misuse recovery, which will help Nacro pursue new revenue streams in the future. In the Transforming Rehabilitation tenders, for example, we have got a partnership with a prime contractor and we will be participating as a Tier 2 provider as well.