The Shaw Trust’s income fell by a quarter to £85.6m last year as a number of welfare-to-work programmes ended and were replaced by the Work Programme.
During the 12 months to 31 March 2012, the last full financial year before the Shaw Trust’s planned merger with Careers Development Group, total income shrank by 24 per cent compared with the previous year’s £112.6m.
Even though the 2012 income included the first full operating year of the Work Choice programme, this only partially replaced the funding lost in other areas.
The biggest programmes that closed were Pathways and New Deal for the Disabled, both of which have been succeeded by the Work Programme, which operates mainly on a payment-by-results basis. Shaw Trust, the UK's largest voluntary sector welfare-to-work provider, is a sub-contractor on the Work Programme.
Virtually all of the charity’s funding cuts came from contracts with the Department for Work and Pensions – in 2011 the charity received £84.1m from DWP; in 2012 this fell to £58.2m.
Expenditure also fell, totalling just over £86m, meaning the charity posted a deficit of nearly £500,000 for the year.
The Trust helped 15,500 people find work during the year, its 29th year of operation.
Its own employee numbers dropped significantly over the period, from 1,517 full-time equivalents in 2011 to 1,136 in 2012. There was a similar reduction in the wage bill; from £44.9m in 2011 to £31.8m in 2012.
The employee costs for 2011 included a provision of £3.6m for redundancies in connection with the ending of the various welfare-to-work programmes.
Wage bill for senior staff is cut
The figures for senior staff salaries suggest that the Trust has made progress on controlling costs in this area.
During 2011, five employees received salary packages of between £120,000 to £170,000. In 2012, one employee received a total package totalling £160,000 to £170,000, but this included a severance payment. No other employee earned more than £120,000 during the year.
The annual report makes no mention of the proposed merger with Careers Development Group, even though the two charities announced they were examining the option on 1 February.
Instead it simply states: “For 2012/13 the Trust is focused on ensuring that the UK deficit is eliminated by the end of the financial year and this is forecast to be delivered by maximising performance on the key Work Choice contracts, supporting income growth in targeted sectors and ensuring that the internal cost base is kept under scrutiny."
Asked why the merger talks were not included, a spokesman for the Trust said: "We began a conversation exploring closer working arrangements with CDG in February this year.
"That work ranged from exploring informal to formal partnerships or a merger, or it could have resulted in the status quo.
"Given that uncertainty and the fact that work between February when we announced the commencement of the work and March when the accounts closed was at a very early scoping stage, we did not include it in the report."
