The Learning and Skills Network (LSN) has gone into administration as Pricewaterhousecoopers (PwC) says it has witnessed a 'marked increase' in charities seeking advice and assistance following 2010's Spending Review.
PwC was appointed as LSN's administrator on 3 November after the more than 25-year-old charity suffered a decline in income and "significant pension liabilities", which increased from £5.2m to £7.9m in financial year end March 2010.
It is now seeking a buyer from within its five educational businesses: Technology for Learning; National Extension College; Education, Skills and Research; Development Services and the Learning and Skills Development Agency (Northern Ireland)/Learning and Skills Network.
The charity employs 117 staff in five offices with 48 employees in London, 14 in Oxford, 16 in Olney, 26 in Cambridge and 13 in Belfast.
LSN has seen a reduction in income from an average of £43m in the three years previous, to £27.5m in financial year end March 2010. As a result, it implemented a new strategy which involved acquiring three new businesses and a merger with the National Extension College which took place in July 2010. It also established a shared service programme for colleges and increased its employee contributions for pensions. This, it was expected was to significantly increase income in 2010/11 and eliminate the pension deficit within 10 years. However it has not been enough to save the charity.
David Hurst, joint administrator from PwC said the charity's situation was a direct implication of government cuts: "The charity operates a number of businesses and has suffered a dramatic decline in contract income since 2009 with its funded programmes diminished due primarily to the cuts in government spending.
"As a result of the decline in income and significant pension liabilities within the charity, the trustees concluded that they were unable to continue and have placed the charity into administration.
"Our immediate priority is to seek buyers for the successful businesses within the charity, to enable their long term survival, preserve jobs and continue supporting customers and students. We would encourage any interested parties to contact us as a matter of urgency," he said.
Ian Oakley-Smith, the other joint administrator from PwC, added that LSN's situation is not unique: "There has been a marked increase in the number of financially distressed charities approaching us for advice in recent weeks and months as the Spending Review begins to impact those charities reliant on government support," he said.
He added that they were hopeful that LSN would be able to continue under different ownership as there has been "a great deal on interest in a number of (the charity's) activities".
LSN is a not-for-profit set up to develop the performance and skills of education sector staff and to promote and encourage education learning and skills of people and organisations. Its services range from leadership and management, to HR and merger support and its clients include the Department for Education, BIS, the Ministry of Defense and Barclays Wealth.
