Action for Children spent £1.3m on redundancies in 2016/17, with around 100 losing their jobs, after the charity lost contracts with local authorities and carried out a restructure.
The charity’s annual report and accounts for the year ending March 2017 have recently been filed with Companies House. They say that most of the redundancy figure relates to what the charity described as “business as usual costs” for a service delivery charity of its size. This resulted in a spend of £1.1m on 92 staff who were made redundant when the charity lost contracts with local authorities.
However, a further 11 posts were made redundant after the charity carried out a “full operational redesign”. This involved creating five regions (England North, England South, Scotland, Wales and Northern Ireland) and came into effect on 1 April. The charity said that where possible people were redeployed elsewhere in the charity.
The charity spent also spent £390,000 on ex-gratia payments. It described these as payments to people made redundant which are made at the discretion of senior management and are non-contractual.
Action for Children employs just over 5,000 people.
‘We face serious challenges ahead’
Carol Iddon, managing director for children’s services at Action for Children, said: “Like all charities providing services in the UK, we face serious challenges ahead, therefore it’s critical our business model adapts to ensure we effectively reach and engage with the children, young people and families across the UK who need our services.
“As a result of our full operational redesign, we have made a total of 11 positions redundant and £168,000 of our costs relate directly to this. Employees have been redeployed across the organisation where possible as a priority. We have taken a similar approach to other functions including HR, IT and finance as part of our overall strategy and this accounts for a further £125k.
“£1.1m of costs however, relate to what we consider ‘business as usual’ of a charity of our size by winning and losing contracts with local authorities. In the current financial climate, local authorities are making very difficult decisions about what type and size of services it can afford and as a result we have had to make 92 roles redundant across the UK.
“Charities and other organisations such as ourselves are taking a closer look at their infrastructures to ensure resources are deployed as much as possible to frontline delivery. In our case to make children across the UK feel safer and happier.”
Regarding the operational redesign, Iddon said: “By delegating authority and streamlining cross-functional teams into five regions – England North, England South, Scotland, Wales and Northern Ireland – we’ve reduced costs in ways that support team working, decision-making, partnership and management and crucially, the different needs of children across the country.”
‘Disappointing year for fundraising’
Action for Children’s overall income was £160m, which was comparable to the previous year, and expenditure was £157m.
The charity said its income had remained stable because it took on activity from the collapsed charity 4Children, which operates nurseries "to generate a surplus to support our charitable activities”.
Some 85 per cent of Action for Children's income is from charitable activities, with just 10 per cent, or £16m, from donations and legacies.
In its accounts, the charity said it had been “a disappointing year for fundraising” with falls in legacies and donations.
It added that it had reduced its overheads and carried out a property review which led to cost savings.
New pay structure
In January the board agreed to a new pay and reward structure for staff, and as part of this has fixed the chief executive’s salary at no more than ten times the median full-time-equivalent salary within the lowest job level.
Tony Hawkhead, chief executive of Action for Children, had a total remuneration package of £184,322, including a salary of £150,000.
Action for Children said it was also developing a reward strategy for staff, which “includes financial and non-financial elements”.
“Our aim is to develop a total rewards framework so that every member of staff has a clear view of the overall package offered,” the annual report said.
New volunteering strategy
The annual report also reveals that the charity has created a new volunteering strategy.
“We’re proud of the work our volunteers do and the contribution they make,” the report said, “and plan to work even harder to support them in the future.”
It outlines four objectives for the new strategy, which are:
- Reflect the communities the charity works in
- Develop volunteer co-ordinator networks
- Improve digital engagement
- Create more opportunities for corporate partners to get involved