The Challenge begins legal battle against the National Citizens Service Trust

09 Oct 2019 News

The Challenge has filed High Court documents against the National Citizen Service Trust (NCS Trust) for an alleged breach of contract in seven areas and has also put forward a separate claim of defamation.

The Challenge, a provider of the government's National Citizen Service, lost its contract with the NCS Trust, which oversees the programme, in August. Bill Ronald, the chair, has since written to Nicky Morgan, the culture secretary, to accuse the NCS Trust of “mismanagement and failure of leadership” and “continued poor behaviour”. DCMS has said it will investigate concerns.

The letter states that the NCS Trust had put “the Challenge at risk of collapse”.

The youth programme was formally launched by the government in 2010. It was delivered by a community interest company until being transferred to a new royal charter body, the NCS Trust, last year. 

The Challenge has been heavily involved in delivering the programme since the beginning. It was the largest provider having put 250,000 young people through NCS since 2009 and employing over 500 permanent employees.  

NCS Trust has been 'wilfully concealing its own failures by using The Challenge as a scapegoat'

Ronald said: “The Challenge continues to be subject to behaviour by the NCS Trust that is in flagrant breach of its current contract. This gives the appearance of an organisation wilfully concealing its own failures by using The Challenge as a scapegoat and passing onto our charity the cost, blame and operational impediment arising from the NCS Trust’s woeful mismanagement.”

His letter also claims that since The Challenge first raised its concerns with DCMS, the NCS Trust has left £4m of basic core contractual payments for 2019 unpaid, and wIthdrawn provisionally-awarded future contracts worth £299m, resulting in “extensive redundancies”.

It adds that the NCS Trust has “refused to accept catastrophic failures in its new, centralised IT system”, and “made defamatory remarks scapegoating The Challenge”. The letter also references the “abrupt resignation” of NCS Trust chief executive, Michael Lynas.

Ronald states that the NCS Trust has “received a legal claim for potentially in excess of £20m, which is now lodged in the Courts and is therefore a matter of public record”.

He adds: “As chairman of The Challenge I must ask you to intervene to prevent the collapse of this organisation, protect other charities from damage, and restore the credibility of the NCS programme.”

In a separate statement, Oliver Lee, chief executive of The Challenge, said: “The Challenge has for several months been engaged with the NCS Trust and DCMS to attempt to resolve serious issues arising from the mismanagement of certain aspects of the NCS programme by the NCS Trust in 2019.

“The Challenge continues to seek resolution of these issues and has made its position clear both through its legal claim against the NCS Trust, which is on public record; and separately in a series of communications with DCMS since July 2019, the most recent of which is now in the public domain.

“The Challenge remains committed to delivering our remaining responsibilities on the NCS 2019 autumn programme and to supporting future NCS providers through a smooth handover process.”

NCS Trust: 'We reject their assertions and we are challenging the legal claim we received'

A spokesperson for the NCS Trust said: “It’s unfortunate The Challenge feels it needs to make these allegations in such a public way - we reject their assertions and we are challenging the legal claim we received after we let the charity know we will not be contracting with them from next year. 

“We made the decision not to contract with The Challenge as we were unable to reach an agreement with the charity over a contractual requirement to use a shared IT system that ensures value for money, improves customer experience and protects young people’s data.

“Having recently recommissioned our new network of regional and local delivery partners, our focus is on embedding NCS 2.0 to deliver value for money to the taxpayer and deliver an even better, transformative experience for the young people that take part in our flagship youth programme.”

The NCS Trust also addressed specific comments in relation to the claims made in a Guido Fawkes piece. On Michael Lynas, a spokesperson said: “Michael Lynas has been involved with the National Citizen Service programme since the first pilot in 2009 and he became the organisation’s first CEO in 2014. In that short time, the programme has transformed the lives of more than 600,000 young people making NCS the fastest growing youth programme in the UK.

“Under his tenure, Michael Lynas secured the long-term future of NCS by guiding it through the NCS Act and Royal Charter, both of which were passed with cross party support in Parliament.
“Mr Lynas will remain in post until spring / summer 2020 while a new leader is recruited. After his successor is appointed, he will continue to champion NCS as NCS Trust’s founder and patron.”

On The Challenge leaving the NCS network of partners from 2020 onwards, a spokesperson for NCS Trust said: “It is not true The Challenge left the network. NCS Trust announced in July that it would not contract with The Challenge from 2020 onwards as it was unable to reach an agreement with the charity over a contractual requirement to use a shared IT system that ensures value for money, improves customer experience and protects young people’s data.”

On the NCS Trust being the subject of multiple investigations, a spokesperson for NCS Trust said: “This is not true. NCS Trust is not subject to multiple investigations. The Department for Digital Culture, Media and Sport (DCMS) received a complaint from The Challenge after we notified the charity we would no longer contract with it. In line with their standard procedures, DCMS is looking into the matters raised and will address any findings as appropriate.”

The Challenge has disputed this, saying that it first raised concerns with DCMS on 15 July, with DCMS promising to investigate on 19 July, both of which were before the contracts were withdrawn 31 July.

On the brand refresh, the NCS Trust spokesperson said: “£10m will not be spent on any brand refresh by the National Citizen Service (NCS). The figure is around £1m each year for our ongoing marketing and creative services, to attract as many young people as possible to the NCS programme - the very reason for the organisation’s existence.”

On the allegation of £4m being owed, a spokesperson for NCS Trust said: “As stewards of public funds we pay our suppliers to the full extent of their entitlement and no further.”

Editor's note: This story has been amended after we were contacted by the Challenge regarding the statement given by the NCS Trust spokesperson. The Challenge says that it first complained to DCMS about the NCS Trust on 14 July, well before its NCS contracts were withdrawn on 31 July.

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