Royal Voluntary Service, the former WRVS, posted an operating deficit of £6.7m last year, which was £3.6m worse than the charity had planned for.
Fiercer competition for shop space, cuts to public sector subsidies for meals-on-wheels services and the growing inability of beneficiaries to pay for services meant that the charity’s income fell well short of what it spent during the year to 30 March 2014.
In an effort to eliminate the financial deficits which have plagued the charity for at least the last six years, in April 2014 the trustees approved a change programme called Fit for Future, which aims to produce a “smaller, simpler organisation, with volunteers at the centre, and with a slimmed-down permanent support structure operating more efficient, streamlined processes”.
The charity announced back in the summer that it would be cutting around 140 jobs as part of this restructure.
Its latest annual report and accounts, published last week, reveal that RVS had planned to deliver a deficit no worse than £3.1m last year, but the actual loss, excluding the costs of a transformation programme, was £6.7m.
Fundraising revenues fell short by £900,000, mainly in corporate income. Lower-than-expected payments from end-users of the charity's services also contributed to the shortfall (£1.2m), along with higher costs of running meals on wheels contracts (£2m).
As well as meals on wheels, the charity operates cafes, trolley services and shops within hospitals, community centres and lunch clubs, helps people to return home after hospital treatment, and provides a ‘Good neighbour’ befriending service.
Its total income during the year was £71m, down on the previous year’s £73.2m, and expenditure was £79.9m, up from £77.2m.
Total reserves plunged from £44.4m in 2013 to £35.6m but all funds have now been spent in relation to the strategic review, strategic development and investment in fundraising. A further £4.5m is allocated to deliver the Fit for Future restructuring programme, due to be completed in 2015/16. The reserves policy was reviewed during the year and reset at a minimum of £6m, equating to three months’ operating costs.
In the 2013/14 year, the charity’s 75th anniversary, it delivered more than 1.6 million meals on wheels; but back in 2009/10 it served nearly 5.9 million.
As part of Fit for Future, RVS has targeted an increase in revenue of £1m each year until 2023, but admitted in the report that it still needs to develop an “efficient way to create high-quality bid and tender documents for projects of more than £100,000” if it is to achieve this.
It also plans to develop fewer, deeper partnerships with trusted third parties, and to improve its recruitment and training of staff and volunteers.
It will continue its devolution towards a decentralised structure where community hubs and locality managers are endowed with greater powers and responsibilities, and it will separate the management of its shops and cafes from the management of its older people’s services in order to improve accountability.
This year the charity aims to limit its deficit on charitable activity to no more than £5.7m and to increase its customer base by 10 per cent. It wants to grow net fundraising income from £1.3m to £3m and boost volunteer numbers by 5 per cent, or 1,750 people.
