All senior staff at failed children's charity 4Children have been made redundant, including the chief executive, administrators revealed today.
A spokeswoman for administrators Smith & Williamson, appointed last week, told Civil Society News, the charity had “no option in the circumstances but for its chief executive and senior management team to be made redundant".
She revealed a “small skeleton team” would be retained “to assist the administrators to oversee the winding up process”.
The spokeswoman also revealed that employees were “paid their customary salary for August”, despite in many cases receiving just one days’ notice of the charity’s closure.
Last week, lead joint administrator of 4Children, Adam Stephens, said redundant staff would be supported through the administration process, to make claims to the National Insurance Fund.
The national charity which provided support to children, young adults, and their families, ran into difficulties earlier this year as a result of “funding pressures” and the loss of “certain key contracts”, according to a statement released by the administrators last week.
The charity’s last published annual accounts for the year ending 31 March 2015, reveal that reserves fell to a deficit of £1.5m – down from £1.2m in credit the previous year.
Writing in the report’s introduction, chair, Pip O’Byrne, described the last financial year as a “mixed one” for 4Children.
“Despite winning a number of contracts… the overall financial performance of the group was not ideal and efficiencies required to support and integrate growth were not achieved, contributing to a deficit of £2.8m for the year,” she said.
“Despite revenue growth of 13.2 per cent from £26.04m to £29.48m, the group returned to a deficit... This was mainly due to not realising efficiencies and necessary savings required off the back of rapid growth in the past few years.”
The charity’s accounts also reveal that its pension liabilities grew by £506,000 during the year, due to its defined benefit pension schemes.
Alongside financial pressures, the charity also saw a disruptive period of governance, with the resignation of six trustees during the course of the year – two of whom served for just 16 and 17 months respectively.
Last week, administrator Smith & Williamson, said that of the total 1,050 employees, approximately 1,000 would be transferred to new employers, including Action for Children and various local authorities and alternate providers. Fewer than three of the charity’s 142 services will close with alternative providers sources for the remaining services.
The charity’s latest set of accounts for the year ending 31 March 2016, are not due for release until 31 December 2016. The administrators have has not revealed which contracts were lost during the year, leading to its closure.
Last week, Smith & Williamson said it was assisting 4Children for several months, to “identify the various options available to it”.
Adam Stephens, lead joint administrator of 4Children said: “It was apparent that the best option was to negotiate a transfer of the services to another not-for-profit organisation. In the end, this has involved far more than just a transfer to Action for Children.
“We are anticipating that thousands of children will be able to continue to access the same services and, as such, the team is working very closely with Action for Children and all local providers to ensure as smooth a transfer of services as possible,” he said.
