Report reveals auditors’ uncertainty over DR UK’s future

New documents published by Disability Rights UK have raised fresh concerns about its financial position, following last week’s announcement of redundancies.

The charity’s annual report for 2011-12, published this week, reveals that its auditors, Sayer Vincent, concluded that there was “some uncertainty about the group’s ability to continue as a going concern”.

Sayer Vincent points to the charity’s net current liabilities of more than £18,000 at 31 March 2012, which compare with net current assets of nearly £400,000 the previous year.

The organisation made a loss of £304,000 in 2011-12, the year in which DR UK was formed from a merger – incurring considerable costs – between RADAR, Disability Alliance and the National Centre for Independent Living.

The annual report also reveals a huge pensions liability of nearly £900,000, caused mainly by RADAR’s final salary scheme, which was closed to new members in 2005.

Last week, Disability Rights UK said that many DPOs faced “major funding challenges” because of the “very tough economic environment”, while Liz Sayce, its chief executive, insisted that its survival was not at risk.

Following the report’s publication this week on the DR UK website, Mike Smith, DR UK’s vice-chair, said the redundancies and other restructuring were “as a result of us taking sensible, considered action… in order to ensure the organisation has a medium term future”.

He said government funding was drying up, while there was less money available from trusts.
Smith, who until early last month was DR UK’s treasurer, added: “It is a difficult time out there for disability organisations. That was the main reason why we had to come together and work together.”

Although he accepted that the large pensions liability was not a good thing, he said that it can “look worse than it is”, and was a problem shared by many other organisations.

He said such liabilities move up and down over the years, while the sum was in effect the amount experts have calculated would need to be paid out across future years, and would never have to be paid “all in one go”.

24 January 2013