Set to close
It’s understood decisions on the loan were put before councillors at cabinet meetings. The spokesman added: “We provided a loan to Age UK (Newcastle) in order to help them with cash flow difficulties whilst they were striving to restructure their business and increase income from their homecare service.
“This initial loan facility was £150,000 but later increased to £290,000 as part of a stepped repayment plan. The loan was designed to give AUKN access to funds in line with their business plan. It was also kept under constant review but unfortunately it became clear that AUKN were unable to pay it back.”
But opposition councillors insist more information is needed.
Lib Dem Coun Anita Lower said: “It is important to recognise that Age UK Newcastle delivered important and valuable provision for older people in the city, and its closure is regrettable.
“We understand that the council provided a significant amount of funding to the charity in recent years despite concerns including a repeated failure to meet contracted outputs.”
She demanded “an explanation of why the council continued to fund the project despite apparent concerns about performance”.
Coun Lower added: “The review by internal audit only appears to have come about since we asked for this to be investigated and officers have not yet informed us of the outcome.
“Whilst the decision to provide funding was agreed by cabinet, we are not aware that concerns about Age UK Newcastle’s financial difficulties and performance have been formally reported to cabinet or councillors.
“The council’s statement carefully avoids answering the key question: which councillors were aware of these problems and when?”
Meanwhile, a number of former employees have called for great accountability for trustees of the charity. One worker who lost her job accused the trustees of “mismanaging the organisation financially, leading to its demise”.
She said it was worrying that new staff were taken on in the summer last year, when she argued the troubled financial situation must have been clear. No-one from the charity was available for comment.