Story: Ian Clifford & Lisa Swift Cartoon: Patrick Amber
New Deal revealed plans in March to sell off Forum House and the New Deal Truck, as the full scale of their financial problems became clear.
In April the Messenger reported on how the Programme had run out of money and closed down all the projects. At the time residents were told that Government Office would not allow the buildings to be sold to support projects and that the Council had limited money to help out.
Executive Director Ann Allen told the Messenger:
“There was never an unwillingness to sell Forum House when projects needed it, Government Office said we couldn’t do that unless clawback (returning money to the government) was removed, and at the time they didn’t want to remove it. Seeing how drastic the situation is, they are now considering it.”
Hole in the pensions
New Deal’s main financial difficulty is a £500,000 hole in the pension fund. At one point it was suggested that the programme would go bankrupt by September this year unless Government Office allowed the programme to sell off assets.
More recently the Council have offered to give New Deal a loan to cover pension costs, which will arise when staff are made redundant in September. These redundancies will include the Executive Director Ann Allen, who told the Messenger:
“The loan is something the Council have offered to other organisations. The pensions’ deficit has affected the Council’s own pension pot due to reduced returns from the stock markets.”
Vestry Hall and Sorby House at risk
Despite this, New Deal are still facing insolvency in September 2010 unless they can sell Forum House. Government Office have stated that New Deal must survive its full 10 years until March 2011. If they do not, they may be forced to sell their other assets, Sorby house and the Vestry Hall, and the proceeds will go back to the Government.
A New Deal board report states “the profitability of Sorby House and Vestry Hall remains imperative”. New Deal are optimistic that the buildings can break even, or generate money. However it’s uncertain if the actual income will meet their projections.
The Council investigate
In March the Council agreed to investigate what had caused New Deal’s financial crisis, after residents and councillors raised concerns at their Full Council meeting.
Council officers are due to report their findings to a Scrutiny Board (Strategic Resources and Performance) on 11th June. The Council are giving an open invitation to groups and residents affected by the end of New Deal funding, to attend the meeting and raise any issues.
Or Contact Dave Ross if you would like to raise issues before the meeting.