Select Committee on Welsh Affairs Minutes of Evidence

Supplementary Memorandum from The Children's Society

The Children's Society's Decision to Withdraw From Wales: A Briefing

  1.  The Children's Society, along with all other charities is facing an uphill struggle to raise funds in the current climate. Amongst the hardest hit charities are medium-sized charities, church charities and children's charities. We fall into all three categories.

  2.  The Society deeply regrets ending 113 years' work in Wales. Our supporters in Wales have worked unstintingly on behalf of children and young people in Wales. However, we are unable to close the gap of over £1 million a year between the costs of operating in Wales and the funds we raise.

  3.  The Society has rightly supported the costs of working in Wales, but the current financial picture means this is no longer viable. We can no longer afford to plug the year on year gap in funds.

  4.  The decision to withdraw from Wales was taken because it is the only option available. This year the Society anticipates ending the year with an operating deficit of £4 million. This figure follows deficits over the last four years of £24 million in total.

  5.  There is £13 million remaining in general liquid reserves. The general view in the children's charity sector is that these reserves for a charity our size should be £20 million, a view shared by our auditors.

  6.  In total we need to make savings of £6.4 million. Of this £5.1 million will come from England, and £1.3 million from Wales.

  7.  Last year the Society cut nine projects in England. The Society is expecting to cut up to another 26 projects in England (the final details will be announced in January) as part of the plan to refocus our work. This is in addition to closing the 13 projects the Society currently runs in Wales.

  8.  To continue in Wales would have made operations in both countries unstable.

  9.  To scale down work in Wales would mean we would not be a national player in Wales and we would be unable to influence the social policy agenda. We would be operating a shadow service and letting down children and young people there. Instead, it seems better to concentrate our efforts to transfer our services to other operators so that they can continue with the support of other organisations.

  10.  The Society's objective is to ensure that its services can continue after we exit from Wales. We are involved in the following initiatives to ensure as far as possible that this can happen:

    —  We are working with and supporting our staff group in Wales who are exploring the possibility running their own charity based in Wales.

    —  We have confirmed our commitment to honour contracts with projects which will allow some projects to continue beyond the current deadline of 2002.

    —  We are exploring the possibility of extending the deadline of July 2002 by eight months to March 2003 so that services have the best chances of continuing.

    —  We are exploring ways of transferring fundraising resources (shops, committee supporters etc) so that our supporters can continue to put their energy and financial support into helping children in Wales.

    —  We are talking to the charity commission to help release appropriate fixed reserves so that they can offer to support future work in Wales.

    —  The Society has stopped new fundraising activities in Wales, although previously planned activities will continue in keeping with legal requirements. We have been asked to keep our fundraising operational so that we maintain a list of supporters who will be able to contribute to a new fund/body that is set up. All funds raised in Wales (and more) will be spent in Wales.

    —  We are committed to exploring all options to ensure as far as possible that our services can continue after the Society withdraws from Wales.

  17 December 2001

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