Taxpayers to bail out fund
CHARITY NEEDS TO PLUG £2.6M HOLE
TAXPAYERS are being asked to bail out Active Northumberland after it emerged the charity has a £2.6m black hole in its accounts.
At next Wednesday’s full meeting of Northumberland County Council, members are being asked to approve additional funding of up to £2.635m to meet the 2017/18 deficit of the charitable trust which provides leisure services in the county.
A report to councillors explains that decisions made by the previous Labour administration have had a “significant detrimental impact” on Active Northumberland’s financial position, which the arm’s-length organisation could not control.
In February, it was revealed a review into the charity had produced a scathing report which was also critical of the council’s involvement, although it praised staff for their “extreme resilience” despite the “unethical and negative organisational culture”.
A summary report of the key findings said that the review “identified significant failings of governance and numerous gaps in the expected level of strategic and operational capability and capacity in Active Northumberland”. The charity’s budget for the 2017/18 financial year was based on the previous year, when it received a £4.7m management fee from the council plus a £1m charitable donation from Arch. However, during 2017/18, a number of services, such as libraries and tourist information centres, were brought back in-house by the council, reducing the management fee to just over £1m. A series of other pressures, including an unforeseen rates bill of £294,000 and an imposed savings target of £500,000, means that despite some savings – mostly achieved from staff redundancies and reductions in services, according to the report – there is a shortfall of £888,000. Following the critical review, the council’s chief executive Daljit Lally asked the Active Northumberland board for its 2017/18 financial forecast, which resulted in the deficit figure of £2.665m. This was then revised slightly to £2.635m. The board also provided a commitment that it would take “all reasonable steps to seek to reduce the potential deficit by continuing to review budgets in order to identify savings and additional income on a monthly basis”. The Northumberland Labour group, which ran the council prior to May last year, has been approached for comment.
It praised staff for their ‘extreme resilience’ despite the ‘unethical and negative organisational culture’