Barnardo’s has recorded an operating deficit despite its income rising by 5% to £315m, with retail sales rising to £87.9m.
Its income was £315m in the year until March 2023, according to recently filed accounts, which is £15.8m higher than in 2021-22.
Nonetheless, in 2022-23 the charity made a deficit of £2m compared to a surplus of £25m for 2021-22, due to large increases in staff pay.
The charity said its financial result for the year “was stronger than we had budgeted for” and it had planned a larger deficit.
“At the end of 2022-23, Barnardo’s was in a positive financial position. After taking tough and prudent decisions at the height of the pandemic, we have been able to return, cautiously, to a sense of normality,” the accounts state.
Expenditure rise
Barnardo’s expenditure increased by £33.6m to £312.4m, from £278.8m in 2021-22, a 12% increase year on year.
The accounts state the most significant increases were in support of front line services, including cost-of-living and emergency relief.
The most significant area of expenditure was staff costs of £190m, which increased by £21.1m largely due to a 5% pay award in April 2022 and one off cost-of-living payment for some employees.
Its total expenditure included restricted expenditure of £12.4m with £11.4m related to service provision.
Other trading activities expenditure of £71.2m included £66.2m representing the costs of operating its 589 retail shops.
Retail and fundraising gains
Barnardo’s accounts show income from charitable activities increased to £184.5m from £179.7m in 2021-22.
“In total we managed to generate £42.1m that was available for charitable activities (net income after allocation of expenditure) from legacies, all fundraising and trading activities,” the accounts state.
It recorded a net loss on investments of £4.9m compared with a £4.3m gain in 2022, “reflecting the economic environment”.
Fundraising activity, including legacies, raised £39.5m – an increase of £2.3m from the previous year.
Gifts in wills in the year totalled £19.2m, and £12.7m was donated directly by supporters.
Total sales across retail grew 13% to £87.9m compared to £77.8m in 2022. It opened a further four superstores, making seven now across the UK. However, it ended the year with fewer charity shops overall.
Staff
In 2022-23, Barnardo’s published its first diversity pay gap report. The median gender pay gap was 5.96%, the ethnicity pay gap -6.37%, and the disability pay gap was at 3% in favour of disabled staff.
The accounts add Barnardo’s intention for future years is to include data on LGBT+ pay gaps also.
There were 5,412 full-time equivalent employees at the year end, compared to 5,304 the year prior.
The accounts show 92 staff earned more than £60,000, a rise compared to 53 in 2021-22. Around £400,000 was spent on redundancies in the year, compared to £900,000 in 2022.
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