Virgin Money should 'hang its head in shame', says MP

03 Oct 2014 News

A Virgin Money donation of £1m to charities in the North East has been described as “paltry” by Labour MP for North Durham, Kevan Jones.

Kevan Jones

A Virgin Money donation of £1m to charities in the North East has been described as “paltry” by Labour MP for North Durham, Kevan Jones.

The comment follows news last week that the Northern Rock Foundation will close after 17 years following failure to reach an agreement with existing backer Virgin Money. It also comes in light of recent news that Virgin Money will float on the stock market for £2b.

“The £1m offer is a paltry amount considering the vast sums being paid out to senior executives at Virgin Money, including its chief executive, who stand to make millions from this deal,” Jones told Civil Society News.

“The closure of the Northern Rock Foundation will be devastating for community organisations and charities who do excellent work in helping excellent causes across the North East. This is a betrayal of the commitments made by the Tory-Lib Dem government that the foundation would be safeguarded when Virgin took over Northern Rock.

“Virgin Money and Richard Branson should hang their heads in shame. I would challenge them to make a substantial donation to charities from their potential windfall.”

The biggest beneficiary of the £1m Virgin Monday donation, is OnSide Youth Zone – a charity specialising in creating youth centres - who will receive £850,000.

Katherine Morley, CEO for OnSide Youth Zone told Civil Society News: “We can’t really comment on Virgin Money’s giving. Obviously we’re delighted that they see the benefits of an OnSide Youth Zone and are keen to support creating the first OnSide Youth Zone in the North East, but it’s difficult for us to comment on their whole strategy in terms of what they give.”

The Northern Rock Foundation was established in 1997 as a grantmaking organisation. In its heyday, it had a grants pot of around £25m a year for charities in Cumbria and the North East. Northern Rock was sold to Virgin Money in 2011 and Virgin donated 1 per cent of the bank’s pre-tax profits to the Foundation until the end of 2013. After that time, Virgin agreed to give the Foundation £1m a year on the basis that the further £3m required by the Foundation was donated from other businesses. But last month, the Foundation announced it would close after failing to attract other donors.

Virgin Money declined to comment.