STATEMENT REGARDING FUNDING CUTS BY WEST BERKSHIRE COUNCIL, JSH sockes it to 'em! Options

[Andy Capp]

STATEMENT REGARDING FUNDING CUTS BY WEST BERKSHIRE COUNCIL

The Trustees of West Berkshire Mencap are extremely concerned about recent misleading statements that have appeared in the press. We would like to set the record straight.

ABOUT WEST BERKSHIRE MENCAP

West Berkshire Mencap is a specialist charity with highly trained and dedicated staff, supported by a fantastic team of volunteers. This means it is able to deliver high quality services on behalf of the Council at a much lower cost than the Council would be able to do itself - services that, for the most part, the Council is obliged to provide.

West Berkshire Mencap is a local success story. In the last 10 years it has grown nearly 400%, and more learning disabled people than ever before are now being supported. In some cases, because of the skill and dedication of its staff and volunteers, West Berkshire Mencap is the only organisation able to support those with the most challenging behaviour to live in the community – those who would otherwise be in expensive full-time residential care, funded by the Council.

The result is first class services that keep families together while providing excellent value for the Council and creating satisfying and worthwhile volunteering opportunities, especially for dozens of teenagers and young adults (recognised recently by the Queen’s Award for Voluntary Service). A true community organisation.

COUNCIL FUNDING

It is important to note that the Council pays West Berkshire Mencap under Service Level Agreements (contracts) as it would any other supplier, with contractually agreed funding levels and
service delivery outcomes.

References in the press to the Council “giving” money to West Berkshire Mencap are misleading.

LETTER FROM WEST BERKSHIRE COUNCIL

In an unexpected letter dated 25th September 2015, West Berkshire Council gave six months’ written notice terminating its “Short Breaks for Disabled Children and Associated Respite Services” contract with West Berkshire Mencap.

Normally, consultation with the Council would be expected in advance of a step as drastic as termination of a contract, but on this occasion there was none.

It has been reported in the local press that that the Council’s plan to cut funding to West Berkshire Mencap is apparently only a “proposal” and that a consultation is to be held. But the letter received is unambiguous - it makes no reference to the contract termination being a proposal or to any plans
for a consultation.

PROFITS

West Berkshire Mencap is a charity, so every penny of income received by West Berkshire Mencap goes towards supporting learning disabled children and adults, their families and carers.

It does not make profits, any more than the Council does. Any underspend or excess of income over expenditure in any one year is reinvested in services – for example, supporting services that West Berkshire Council has already de-funded by 55% in the last round of Voluntary Sector Prospectus funding.

Moreover, nearly £270,000 of funding for other (adult) services purchased from West Berkshire Mencap by the Council has not yet been confirmed for 2016/17. The Council’s Voluntary Sector
Prospectus process may provide this funding in the end, but after 18 months the process is still not concluded and we have no certainty about the outcome.

Given the abrupt way in which the contract for Children’s Services has been terminated, the Trustees are understandably concerned that some of our Adult Services funding may be at risk too.

RESERVES POLICY

The Charity Commission requires a charity’s Trustees to demonstrate appropriate financial management and financial sustainability by establishing a prudent Reserves Policy, declare it in its accounts, and work towards maintaining that level, reviewing it regularly.

This is what we have done.

The last charity to fail to keep prudent reserves (Kid’s Company) went bust in spectacular style last month. We have no intention of allowing the same thing to happen to West Berkshire Mencap.

Our Balance Sheet at 30 June 2014 shows net current assets of £835,701 and free reserves of £141,921.

Net current assets (cash in the bank) £836,000

LESS: Designated fixed assets sinking fund (£ 92,000)

LESS: Restricted Funds:
Domiciliary Care Services (£224,000)
Adult Day Care Services (£209,000)
Children’s Services (£120,000)
Family Adviser Service (£ 50,000)
--------
Free reserves (available to spend) £141,000
========
In the table, sums have been rounded to the nearest £1,000 for ease of reading, which leads to minor rounding errors. Full details of the precise figures are in our published Annual Accounts,
which are available online from the Charity Commission website.

RESTRICTED FUNDS VS. FREE RESERVES

Restricted funds are just that – funds restricted to specific purposes that cannot be spent on other things. Funds are restricted to the service area for various reasons – for example, if they are donated for a specified purpose or are earned in fees or other service-specific income. Restricted funds are very important for providing security for our existing projects and services and enabling us to develop and expand services in response to the needs of service users.

Our established Reserves Policy (approved by our Auditors in line with Charity Commission requirements) is to seek to maintain free reserves to meet working capital obligations for three months, a total of £430,000.

At the year-end, free reserves stood at just £142,000. It appears that the Council is advocating that this already low figure be reduced to virtually nothing.

If free reserves are spent next year, what happens the year after that?

Once these reserves are spent the charity will potentially be in an even worse position, the services de-funded by the Council will have to close in any event, and other services will then be put at risk.This is at odds with the Trustees’ over-riding legal obligation and responsibility to ensure the long term sustainability of the charity.

DIFFICULT DECISIONS

Charity Trustees have a legal obligation and responsibility to run the charity properly, in accordance with the law and following the requirements of regulators such as the Charity Commission.

Further, Trustees have a duty of care to their charity that extends beyond the current financial year and that requires Trustees to ensure long term sustainability. This means that sometimes very
difficult decisions have to be taken.

At the moment we have no assurance of any funding for our Children’s Services beyond March 2016 which means that the services face closure. We have had to explain the position to those affected as soon as possible - our loyal and hardworking staff, our dedicated volunteers, and above all the families whose children use our services.

For and on behalf of WEST BERKSHIRE MENCAP

Julian Swift-Hook
Chairman
27th October 2015

[CharlieF]

Definition of charity Oxford Dictionaries
noun (plural charities)

1 An organization set up to provide help and raise money for those in need:
the charity provides practical help for homeless people

1.1 [MASS NOUN] The body of organizations viewed collectively as the object of fundraising or of donations:
the proceeds of the sale will go to charity

2 [MASS NOUN] The voluntary giving of help, typically in the form of money, to those in need:
the care of the poor must not be left to private charity

2.1Help or money given to those in need:
an unemployed teacher living on charity

What with all the kerfuffle about the government millions spent through Kids Company and locally the cutting of Mencap’s Council funding, I’ve been having a ponder as to whether the whole charity thing needs a lot more scrutiny. Surely the key point about charity, or ‘a charity’, is that it is benefited by voluntary donations and not funded via taxation.

It seems to me that if we as a community deem that the kind of services that are being provided are indeed necessary, then they should be either provided by local or central government directly or properly outsourced via regular competitive tender in order to qualify for being paid for out of taxation. If an organisation is funded (in whole or in part) by taxpayers money then perhaps it ought not to be called a ‘charity’ at all, since the donors’ money is not given voluntarily.

I appreciate this might seem like quibbling about semantics, but at present the system seems to be **** about face. A charity offers a service (that it chooses to provide) and the Council pays for it without seeking a comparative quotes (so to speak), instead of the Council taking a considered approach to determining that a need exists and then seeking the most suitable provider to deliver the service.

One of the key problems with Kids Company seems to have been that staff at the charity made rather random decisions about who should be the recipient of cash money and for what purpose, these choices turned out to be subject to personal whim rather than a considered and fair distribution process. And surely the decision making should be the other way on – this kid needs help so we must determine what his needs are then find the best way to deliver them.

Do you see what I mean? It’s all topsy turvy… perhaps it’s just too much like hard work to do it the other way on, but surely the process should be led by the needs of the potential service user rather than the custom and practice of any given organisation, whether it be a charity, a not-for-profit or private sector. Just throwing it out there…

[On the edge]

I couldn't agree more. I'm presently helping an elderly Aunt investigate the goings on at a large charity, which due to the opaque nature of charity reporting and accounting is not particularly easy. The Charities Commission as regulatory check is about as effective as the District Auditor; interested only in seeing the books are kept. Many charities have simply become money raising and job creating schemes; the rationale being lost to these elements only.

[Andy Capp]

IF the public statement is to be believed, it is claimed that MENCAP provide a better service than the council can and are apparently obliged to provide. It is further claimed that their business management is in order. This doesn't mean that charities shouldn't be scrutinised of course, but Cllrs defending painful decisions could show a little more contrition so as not to look like a heartless knob.

Again a lot of this is avoidable if the council were a little more professional with their PR.



However, donations should never be considered a given and that is where MENCAP have come unstuck here.

[CharlieF]

IF the public statement is to be believed, it is claimed that MENCAP provide a better service than the council can and are apparently obliged to provide. It is further claimed that their business management is in order. This doesn't mean that charities shouldn't be scrutinised of course, but Cllrs defending painful decisions could show a little more contrition so as not to look like a heartless knob.

Again a lot of this is avoidable if the council were a little more professional with their PR.



However, donations should never be considered a given and that is where MENCAP have come unstuck here.

Yup totally agree with you!

[Rdg]

Equally worrying is that if the council are obliged to provide the services and due to the reduction in donation it is being suspended - what will the council do to meet it's obligations and will that cost the tax payer more or less ?

[blackdog]

It's got very little to do with donations - the whole point of JSH's rant is that the money being cut is not a donation or grant but a payment for services that West Berkshire Mencap provide to WBC. They have been told that one of their contracts will not be renewed come April.

The interesting point is whether JSH is correct in stating that WBC are obliged to provide this service - I'm guessing that WBC disagree, and I suspect WBC are right.

[CharlieF]

It's got very little to do with donations - the whole point of JSH's rant is that the money being cut is not a donation or grant but a payment for services that West Berkshire Mencap provide to WBC. They have been told that one of their contracts will not be renewed come April.

The interesting point is whether JSH is correct in stating that WBC are obliged to provide this service - I'm guessing that WBC disagree, and I suspect WBC are right.

My point is that surely the purpose of a charity is to provide things paid for by voluntary donation, that are over and above the statutory duties required of the Council.

[user23]

The interesting point is whether JSH is correct in stating that WBC are obliged to provide this service - I'm guessing that WBC disagree, and I suspect WBC are right.

Reading back what he said carefully

services that, for the most part, the Council is obliged to provide.

He's referring to all the services that they provide, some of which WBC are obligated to do so.

He doesn't say that WBC are obliged to provide the service in question.

[Andy Capp]

Reading back what he said carefullyHe's referring to all the services that they provide, some of which WBC are obligated to do so.

He doesn't say that WBC are obliged to provide the service in question.

I don't agree: "West Berkshire Mencap is a specialist charity with highly trained and dedicated staff, supported by a fantastic team of volunteers. This means it is able to deliver high quality services on behalf of the Council at a much lower cost than the Council would be able to do itself - services that, for the most part, the Council is obliged to provide."

That looks like he is saying that some services provided by MENCAP are services the council are obliged to provide. If it is not true, then he is being very sneaky.

[On the edge]

The compulsory provision issue is really a red herring. Charity or commercial, if an organisation is contracted to provide services to the Council, the contract is never going to be forever. Mencap might be delivering at a lower cost than the Council itself did previously, but it's a dangerous assumption to suppose that no one else could do it better or cheaper than Mencap. As CharlieF rightly points out, this is actually charity Mencap acting as Commercial Service Provider Mencap. WBC have a pretty hard decision; like it or not, they are right to go to fundamentals.

[user23]

That looks like he is saying that some services provided by MENCAP are services the council are obliged to provide.

Yes, that's what I think he's saying too.

What he's not saying is whether the council are obliged to provide the specific service being discussed here.

[Andy Capp]

Yes, that's what I think he's saying too.

What he's not saying is whether the council are obliged to provide the specific service being discussed here.

I'm sorry, I'm lost. I wasn't aware we are discussing any specific service?

[user23]

I'm sorry, I'm lost. I wasn't aware we are discussing any specific service?

For more information please re-read the original post in this thread.

[Andy Capp]

For more information please re-read the original post in this thread.

You would not look like such a knob, if you just spat it out!* We weren't discussing any services, but I now know what you mean: “Short Breaks for Disabled Children and Associated Respite Services”. And I suspect you might be right.


*Ooops, sorry User23, I forgot this is the new and improved friendly forum.

[blackdog]

My point is that surely the purpose of a charity is to provide things paid for by voluntary donation, that are over and above the statutory duties required of the Council.

I think you misunderstand the wide scope of modern charities.

The council has a duty to provide housing - for which it uses charities (housing associations and almshouse trusts); it has a duty to provide schools increasingly supplied by academy trusts. Obviously it is using West Berkshire Mencap to fulfil some of its mental health duties.

Many councils have hived of their museums into charitable trusts, WBC did something similar with the Corn Exchange years back. Libraries could well be next.

[blackdog]

The compulsory provision issue is really a red herring. Charity or commercial, if an organisation is contracted to provide services to the Council, the contract is never going to be forever. Mencap might be delivering at a lower cost than the Council itself did previously, but it's a dangerous assumption to suppose that no one else could do it better or cheaper than Mencap. As CharlieF rightly points out, this is actually charity Mencap acting as Commercial Service Provider Mencap. WBC have a pretty hard decision; like it or not, they are right to go to fundamentals.

I suspect Mencap would be a little less upset if they had lost a tendering process and the service, or something similar, would continue to be provided by an alternative provider. But this does not seem to be what is happening - WBC have decided they can no longer afford to provide the service, so they will not pay anyone to provide it.

Rather than saying this they muddy the issue by claiming that WB Mencap is so rich it can afford to fund the service itself - which is why JSH goes on so much about their financial situation in order to refute WBC's claim.

[Andy Capp]

If the council have to make the cuts, then that is what will happen. It is very regrettable that it affects the very vulnerable minority, but that I would imagine is a part of the issue. Perhaps now we will eventually see this Big Society previously spoke of.

It is too easy to blame the council, but the council is only the 'adjudicator' or the 'fund manager', the people who are withdrawing funding is ultimately the tax payer brought about by Tory voters (I realise that is slightly unfair, but they were the party voted in with the austerity plan).

Mind you, I don't think any of that excuses the shooting-from-the-hip language of the councillor.

[je suis Charlie]

I, for one would if given the option, pay a little more council tax if services like these could be ring fenced.

[Andy Capp]

I, for one would if given the option, pay a little more council tax if services like these could be ring fenced.

I agree. The problem though is that it seems the charities become somewhat complacent and I believe that has happened here: "they would never dare remove funding from MENCAP, would they?".