National charity Age UK has said it will use £5m from its reserves to support its local subsidiaries during the winter.
Speaking in parliament yesterday, the main charity’s head of network resilience, Kirsty Gaskell-Sinclair, said three local Age UK charities closed last year and she expects to see more in the next 12 months.
She said many of the charity’s around 123 local subsidiaries across England were using their own reserves to cover “shortfalls in their services as the cost-of-living starts to impact on their income”.
In a recent internal survey, most local Age UK charities reported experiencing a “significant adverse impact” from the cost-of-living crisis, driven by increased heating and electricity bills.
These higher costs have been compounded by local subsidiaries “having to up their salaries to retain staff” while having “shrinking volunteer numbers”, Gaskell-Sinclair said.
Income has also dipped for many organisation due to a reduction in donations and local government contracts “failing to keep pace with inflation”.
At the same time, 97% of local Age UKs have reported “significant increase in demand”, with inquiries to their services doubling compared to this time last year.
More closures expected
“They will continue to dip into reserves to subsidise these contracts, they will continue to subsidise that that demand. That increasing demand, it's not sustainable. We know it's not sustainable,” said Gaskell-Sinclair at the APPG on charities and volunteering.
“In real terms, we have seen a decline in our network. As a consequence, last year, we had to support three local Age UKs to close down. I suspect we will see ourselves supporting others to have an orderly closure in in this next year.
“It's difficult to quantify how sizable that will be. But we know it's simply that they are reliant on reserves, donations are going down, complexities increasing, the volume of people that want help is increasing. And local authorities particularly and NHS colleagues, where we are working with them on those things, can't do anything more, but keep driving demand to us.”
Reserves release will impact national charity
Gaskell-Sinclair said the national charity, which had an income of £127m in 2020-21, would dip into its own reserves to support its network over the next few months.
“We can make available £5m to our network just to help them through this winter. But obviously, that has an impact on us as well in our ability […] to meet the demand of our own national service coverage,” she said.
She said the £5m Age UK will release was “intended to recognise […] the fact that our local Age UKs have indicated but they are reliant on their reserves to meet that current demand”.
“Our assumption is that that will only increase, particularly if we see the mild winter shift to being a less mild winter and cognisant that come the end of March the current release scheme will come to an end,” she said.
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