Council ‘can’t continue to bail out a charity that can't manage its finances’ 

27 Jul 2018 News

Greenwich Council has refuted the allegation that its U-turn on funding will force the closure of the youth charity Wide Horizons, saying that it has become clear the charity “does not know how to manage its finances”. 

Wide Horizons issued a plea for support yesterday, saying the council’s U-turn on a £200,000 loan would force it to close its doors next week, with the loss of 75 jobs. 

But the council last night said that it had already underwritten a £1.4m loan and now believes that the charity is not able to turn itself around. The council also said it had been asked for double the amount that the charity had said it asked for yesterday. 

Councillor Danny Thorpe, leader of the Royal Borough of Greenwich, said: “Just before the turn of the year Greenwich and Lewisham Councils underwrote a £1.4m loan to Wide Horizons based upon a new business model, but only a few months later the charity came back asking for an additional £400,000 as they were experiencing financial difficulty. 

“Our assessment was that the additional funding would only keep the charity afloat until the end of this year, so we made it clear then that we could not provide more funding unless they developed a more sustainable business model. To claim we made a ‘last minute U-turn’ is just plain wrong.” 

The council revealed that the charity had only submitted proposals at the last minute and that it was no longer in the taxpayers’ interest to continue to support the charity.
 
“Despite numerous requests, the charity submitted their proposals to us less than 48 working hours before a deal needed to be reached. Unfortunately it was clear that the proposed business model was not sustainable and that, with significant levels of overheads, it was not in the taxpayers best interests to provide any further financial assistance.”

Working towards a solution

Thorpe said that the council would explore ways of continuing to provide services and liaise with schools. 

He said: “The organisation, and its staff in particular, have provided a valuable service for children in the borough, so we are bitterly disappointed with this outcome. We will make sure the sites we own are protected and will explore options for them to continue to be used to provide outdoor education opportunities. 

“We will liaise with schools in September and work towards a long-term sustainable solution. However, we have to spend our limited resources wisely and cannot continue to bail out a charity that clearly does not know how to manage its finances.”

Wide Horizons is over 50 days late filing its 2017 accounts with the Charity Commission. Its accounts for the year ending July 2016 show it to have had an income of £3.12m and spending of £2.95m. It held £335,192 in unrestricted reserves, which was at the lower end of its target of between £330,000 and £450,000.

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