People Can goes into administration due to £17m pension deficit

20 Nov 2012 News

The charity People Can, formerly known as Novas Scarman Group, has gone into administration, blaming a £17m pension deficit.

The charity People Can, formerly known as Novas Scarman Group, has gone into administration, blaming a £17m pension deficit.

The charity, which works with individuals experiencing homelessness and domestic abuse, as well as providing rehabilitation for ex-offenders, has over 250 staff, and worked across the UK. Some are believed to have been made redundant already.

Its income in 2010/11 was £11.9m.

PricewaterhouseCoopers, who have been appointed administrators for the charity, said it was talking with local authorities about whether they would maintain services delivered by People Can and take on its staff.

David Hurst, joint administrator and director at PwC said: "Our immediate priority is to safeguard the excellent services that People Can provides across the UK.  The local authorities that outsource contracts to the charity were informed of the precarious position early last week and were asked to seek successor providers as a matter of urgency. We are continuing to work with them very closely to ensure a smooth transition of these services wherever possible.

"The charity's significant pension liabilities dated back many years to its previous role as a Registered Social Landlord.  A range of restructuring options were explored, however a deal could not be reached that worked for all stakeholders."

year, following a £3m funding cut across its services.

The Novas Scarman Group was formed by a in 2008.

Commenting on how issues around pension obligations are impacting companies and charities more widely, Jonathon Land, partner and head of pension credit advisory at PwC added:

“Many companies and charities are struggling to cope with their rising pension obligations.  Historically low gilt yields, poor investment returns and ever-increasing mortality assumptions have inflated these deficits to a point where it is creating significant pressure on companies’ and charities' cashflows.  This is particularly acute where the size of a pension scheme is large relative to the size of a charity. 

"Although proactive action will often relieve pressure, unless the economic environment changes to make pension obligations more manageable, we could expect further insolvencies in the charity space.”

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