Leonard Cheshire reports 275 redundancies amid major restructure

14 Feb 2024 News

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Leonard Cheshire

Disability charity Leonard Cheshire made 275 redundancies last year as part of a “multi-year turnaround”, according to newly filed accounts.  

For the financial year ending March 2023, Leonard Cheshire reported a 30% reduction in support service staff, as roles were removed across teams and functions. 

The charity spent £771,000 on redundancy costs for the year, a significant decrease from the £2.9m the previous year. 

Its number of full-time equivalent employees fell from 3,407 to 3,131 over the year period.

Despite cutting costs, the disability charity recorded a deficit for the fifth year in a row.  

The charity is currently being investigated by the Charity Commission following consecutive years of reporting deficits

‘Undeniably difficult’ decisions made 

During the financial year, Leonard Cheshire decided to close all of its international and UK community programmes to cut costs. 

This was reflected in its income from its international programmes, which fell from £5.06m to £3.44m for the financial year. 

Likewise, income from its UK community programmes dropped from £3.30m to £1.49m from 2022 to 2023. 

Leonard Cheshire chair Neil Goulden said: “Some of the measures taken, including pulling out of our international delivery and our UK community programmes, were undeniably difficult for all but vital for the long-term sustainability of the organisation.”

Ruth Owen, chief executive of the charity, commented: “Since joining Leonard Cheshire, a huge amount of my time, and that of my wider leadership team, has been devoted to addressing a serious financial crisis which had built up over many years.

“After many years of operating with large deficits between income and expenditure, we had to start reversing this trend urgently in 2022-23.”

Deficit of almost £10m 

The accounts state that the charity is experiencing “continuing deficits, because the cost-of-service delivery is higher than the fees generated”. 

Total income at the charity was £152m for the year, down from £158m for the financial year ending March 2022.  

The charity ended the financial year with a £9.71m deficit, with a total expenditure of £162m. 

Most of the charity’s expenditure was on its core activity of social care, on which the charity spent £153m, £5m more than the previous year. 

The charity said this increase was “primarily the result of increased staff costs, mainly agency, due to a shortage of suitably qualified workers in our social care business”.

Leonard Cheshire’s highest earner made less than in 2021-22, with an annual salary of £220,00 - £230,000, down from the £250,000 - £260,000.

Donations down

Donations and legacies to the charity decreased from £7.61m to £4.49m from 2021-22 to 2022-23. 

Government grants and contracts accounted for 96% of the charity’s total income, with £141m generated from 187 government contracts and £3.24m coming from 12 government grants. 

Its net movement in funds for the charity fell from £94.7m to £83.7m over the financial year.

The charity’s processes for accounting funds were reviewed from 2022-23 and the charity identified “historically weak” governance systems which had led to errors. 

Historically, eligible restricted expenditures had mistakenly been categorised as unrestricted funds instead of restricted funds. Previous figures have now been restated to include these. 

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