'We are being squeezed' as costs increase but income doesn't, says Sense FD

02 Mar 2018 News

Kris Murali, group director - finance and resources, Sense

A tough financial climate has led to Sense being "squeezed" as its costs have increased, without a corresponding increase in contract income, its finance director has said. 

Speaking to Charity Finance magazine, the charity’s group director of finance and resources Kris Murali said the charity has reassessed the way in which it provides services as a result. 

He said: “Even when we get new contracts – which is the bulk of our activity – the challenge is to generate margins. We are being squeezed.

“The cost base has gone up considerably in the last few years, without any direct relationship to the income side. We have things like auto-enrolment pensions, the Apprenticeship Levy and the National Living Wage going up every year, but our contract prices have not gone up.

“Local authorities have not increased our fees but our cost keeps piling up, so we are having to really look at various things and rejig.”

New community centre

Murali said Sense has changed the way it delivers services and a new community cente in Birmingham was part of the charity’s strategy to reassess the way in which it provides services in a tough financial climate.

He said the TouchBase Pears centre at Birmingham’s Life Sciences Park has been operating since September and will provide the charity with “a significant additional income stream”.

The centre in Birmingham includes a range of fully-accessible features including a café, a sensory garden, art exhibitions and a library.

It also offers a range of rooms and facilities for hire by local businesses and at discounted rates to local residents and community groups. RNIB Birmingham and other charities are already using the space.

The charity’s chief executive Gillian Morbey opened a similar centre in Glasgow almost ten years ago while she was chief executive of Sense Scotland, and she brought the idea down to England when she took up her current role in 2010.

Murali says: “Gill and Sense had a vision. Social care is going to become more and more challenging, so we wanted to anchor the services in a way that we are able to offer flexible solutions to councils and to local authorities.

“You need to be a bit more innovative or a bit imaginative in providing service options or solutions, and we find that a centre like TouchBase gives those options.

“People can be brought in there and their life experiences can be better managed than just residential care homes and other things.

“So the objective is to provide those opportunities for our beneficiaries and have flexible solutions for local authorities so they also see their costs going down, because funding is a big challenge everywhere.”

Sense needed to raise £15m to fund the whole Birmingham project. According to Murali, the charity managed to raise more than £5m and borrowed about £10m.

He added: “We will continue to fundraise and use it for various internal activities and internal infrastructure that we will do within the building.”

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