Employment charity Tomorrow’s People collapsed owing £1.63m 

24 May 2018 News

Tomorrow’s People, an employment charity, owed £1.63m to creditors when it collapsed earlier this year, according to the creditors report. 

Most of its staff lost their jobs in March when the charity entered administration but 20 shop staff have been transferred to a new employer. 

The charity appointed Lane Bednash from CMB Partners as the administrator in March. 

Tomorrow’s People had an income of £4.8m for the year ending March 2017 and employed 135 people at the end of that year, according to its page on the Charity Commission website.  Announcing the closure earlier this year it said: “The charity fundraising landscape has been increasingly tough in recent years, particularly for organisations of the size of Tomorrow’s People." 

When it announced its closure it said it was hoping that other providers would be able to take on some of its projects, but the creditors report said this was not possible and most of the staff were make redundant. 

Preferential creditors expected to be paid in full 

Yesterday Bednash filed a statement of administrator’s proposal with Companies House, setting out the action taken so far to wind down the charity and future plans. 

It said the charity owed an estimated £72,603 to preferential creditors, mainly comprising of arears of wages to staff, most of whom were made redundant shortly after administrators were appointed. 

It also owes £1.56m to unsecured creditors. Staff are owed £371,290 in redundancy and notice pay, HRMC is owed £79,000. 

Administrators expect that preferential creditors will be paid in full while, while unsecured creditors will receive 65p in the pound. 

Restricted funds cause delay

The administrator is holding £1.37m in cash in a designated estate account after releasing £694,900 in cash from the charity’s bank accounts and £677,609 from its investments

But the report notes that over £500,000 of the charity’s funds are considered “restricted” meaning they can only be spent on specific things, such as the delivery of a particular programme. 

The administrator has asked for legal advice to review the documentation around these funds.

“It is hoped that some of the donors of those funds will release the restriction and therefore those funds will form part of the charity’s assets,” it said. “If this is the case then the charity’s assets will increase accordingly, which will increase the dividend to be paid to creditors.” 

But because there are up to 25 separate restricted funds it will “take several months before a final position can be agreed”. 


Administrators transferred Tomorrow’s People’s four shops to another charity, the Shaw Trust. Around 20 staff were transferred, saving employment liabilities of £25,000.

The Shaw Trust paid a notional £1 for the equipment and stock held at the shop sites and the transfer has reduced Tomorrow’s People’s leasehold liabilities by £147,633.

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