Norwood Annual Review shows that Local Authorities still fail to pay true cost of care
Norwood this week published its Annual Review 2002/3 with figures showing a widening gap between the cost of providing services and the income earned through Local Authorities purchasing those services, during the twelve months ended 31 March 2003.
Speaking as Norwood published its figures, Chief Executive Norma Brier said: “This year we have instituted a major restructuring at senior management level to enable us to strengthen our capability and take action against the organisation’s deficit. Our aim is to deliver our services more effectively and to an even higher standard. In the coming year we will be developing a new strategic plan to redefine our goals and to outline the way in which we will achieve them over the next three years.”
Norwood’s total income for 2002/3 was £24.4m of which it received £16.4m in statutory funding, leaving it heavily reliant on voluntary income to keep services running at current levels.
The costs of providing its specialist services rose by £2.8m in 2002/3 to £23m, an increase which Norwood attributes principally to the additional costs incurred through changes required to meet the Government’s Care Standards. Norwood wholly supports the introduction of the Care Standards Act, which will be fully implemented throughout the UK in 2005, and has long lobbied the Government for an injection of additional funding streams to help organisations meet the additional costs associated with them.
During the same period, income from Local Authorities increased by £1.4m, up from £15m in 2001/2, to £16.4m in 2002/3. This was attributable to the annual fees increase the organisation negotiated with Local Authorities and expansion of its supported housing service.
Norwood’s fundraising income was £5.7m in 2002/3. This compares with £6.3m fundraising income in the previous year, a position achieved through unusually high levels of legacy income. Fundraising income, together with an increase in income in other areas and efficiencies made throughout the organisation, allowed Norwood to limit its deficit for the twelve months to 31 March 2003 to £803,000.
Investments at 31 March 2003 stood at £5.7m, some £1.5m lower than at the previous year-end. Commenting on this, Duncan Milroy, Norwood’s Director of Corporate Services said: “As is common place in the charity sector, Norwood holds around 70% of its investments in shares. Values fell markedly during the year in question due to the continuing adverse market conditions. However, investments are made for the medium to long term and I can assure our supporters that the situation is improving. As at September 2003 we have clawed back £450,000 on our investment losses and we can reasonably expect further recovery.”
Mr Milroy went on to say: “2002/3 was a challenging one for Norwood in many ways. The increasing squeeze on Local Authority funding, changing legislation and growing demands on our community from a range of charities meant that Norwood must examine its structures and practices even more rigorously if it is to continue delivering services to their current high standard. The financial out-turn for the year was disappointing, reflecting the cost impact of greater government regulation. We have taken action to avoid future financial deficits whilst keeping the impact on our services to a minimum. We can expect the immediate future to be no less challenging, but we have great confidence in working with our users, partners, staff and the whole community to meet the challenge.”
David Wosner
Public Relations Officer
tel: 020 8420 6942
email: david.wosner@norwood.org.uk
