The decision to partially close

We know that everyone has been shocked by the partial closure of The Painswick Centre. We acknowledge that the notice period has been very short and has undoubtedly caused difficulties for many users of the Painswick Centre and we are deeply sorry for this. We took the decision extremely seriously, however once the realities of the financial situation became clear, rapid action was necessary to stop hemorrhaging of funds. We made the decision to partially stop operations in line with guidance published by the Charity Commission (CC12), which outlines what Trustees are bound to do to attempt to avoid insolvency.

We recently undertook a detailed financial forecast exercise to help the Board understand the Centre’s exact position. The forecast showed that if the Centre continued to operate as it was currently, it would have suffered a loss of over £60,000 by the end of this year. Several further financial forecast scenarios were then run which confirmed that the Centre would slip into insolvency if immediate action was not taken. At this point the Trustees concluded that the current financial model was not viable and the only option available was a partial, immediate closure. Activities currently continuing are those which make a positive financial contribution to costs and are self-administering. All negative financial contribution activities or those requiring administrative input have had to be given notice.

The Centre still holds cash in reserve of c.£60,000, but this is not enough to cover current operational and maintenance costs, and would be completely exhausted within 7 months of continued operations. The partial closure has been actioned to safeguard as much of those cash reserves as possible to ensure a future for the Centre.

The financial situation

There has been recognition for a number of years amongst the Trustee body past and present that while the Centre’s income looks to have largely ‘washed its face’, it has not generated enough to adequately maintain the 116 year old building. As a result, vital investment into the building itself has been dictated by available funds rather than by what has actually been needed to properly maintain the building. This has resulted in a ‘sticking plaster’ approach, which unfortunately is no longer viable and in fact has stored up problems which now require immediate – and costly – action if the Centre were to remain fully operational.

The financial forecast included a conservative estimate of £40,000 needing to be spent this year on immediate repairs to simply keep the Centre’s doors open, including: a new boiler, guttering repairs and associated asbestos works, electrical supply problems, roof leaks, and drainage issues. In addition, a number of other unavoidable costs have arisen this year:

• Utility bills increasing from c.£7,000 per year to a projected £16,500 (this figure includes Government subsidy, which if removed will increase this forecast figure).
• Legal fees to change from an unincorporated charity to a Charitable Incorporated Organisation (which would allow the Centre to set up a commercial arm to undertake permanent trading); and to register the charity’s property with the Land Registry (a long-standing issue which dates back at least three decades).
• The cottage behind the Centre, which has traditionally brought in rental income, has significant structural damp issues and has recently been rendered uninhabitable. This will equate to a loss of income for the Centre of c.£5,000 for the remainder of this year, and an annual loss of income of at least £9,000 going forward until it is made habitable, with standing charges for utilities and Council Tax remaining payable.

Moving forward

At the time of going to press over 400 responses have been received to the survey about the future of the Centre, and so far the response is overwhelmingly to save the Centre, with plenty saying they will volunteer time, money or skills to help. This is extremely positive and heartening.

Those who have been involved over the past 5+ years have unanimously recognised that fundamental, large-scale change has been needed to the business model of the Centre; tweaking the current model will not be enough. The time for that change to happen is now. A new plan is needed that develops a long-term, relevant and sustainable future for The Painswick Centre in line with its charitable purpose.

A new board of Trustees is needed to step forward to develop that plan for the community, and in particular a new dynamic Chair is needed. That new board will also have the authority to convene one or more committees of volunteers to look at specific issues or tasks. The skills and experience needed across the board and any sub-committees will include:

• Finance
• Business/Commercial Development & Strategy
• Buildings & Maintenance
• Boards & Governance
• Legal
• Fundraising
• H&S, Risk Assessments and Compliance
• HR & Staffing
• Project Management
• Secretarial & Record Keeping

A recruitment process is now open. Anyone interested in being involved in making change happen by either being a Trustee or sitting on a volunteer committee, or by offering pro bono skills and advice, please send an email to info@painswickcentre.com by Friday 9^thJune.

The remaining three trustees will continue to progress necessary actions for the time being. We are not permitted to resign at this point due to Charity Commission rules to maintain a quorum, however, all are prepared to step down once a new board headed by a new Chair has been properly elected according to the charity’s constitution.