Leonard Cheshire £18m per year in red

Back in March, Leonard Cheshire’s Chief Executive Ruth Owen sent round the following letter.

Dear Colleague,

If you were able to join me on the call yesterday, you will already know the situation we face. I’m following up in writing as I shared a lot of information on that call which I know can be hard to digest. If you were unable to join the call, I apologise that this is your first chance to hear this information. Yesterday’s meeting was recorded and is available to watch on the intranet.

Leonard Cheshire is facing a significant financial challenge across the whole of our operation, both in the charitable and service aspects of our work, and we need to act now to reduce our costs across the whole organisation.

Read More

In doing so, we need to protect the jobs in our frontline residential and supported living services but I’m afraid to say that this will lead to redundancies for some of you who work outside our frontline services.

It saddens me that we are in this situation, it’s not what any of us want, it’s certainly not what I understood to be the situation when I took on my dream job. The important thing is that we face it, deal with it and sort it out, and I am committed to doing exactly that.

I want to explain the current situation fully so we all have the same information at the same time, as transparency is important to me, and I want to set out clearly the steps we must take now to address the challenge together. I am sorry I haven’t been able to do it before now, and I recognise that many of you have been anticipating something happening for a while, which is an uncomfortable place to be.

I will be putting a follow-up meeting into our diaries, which I hope everyone can make, as I feel it’s important that we get together again once everyone has had the chance to absorb this news.

Current situation

The financial challenge we face today has been building up over several years. The issue is that we do not have sufficient level of reserves and are operating within an overdraft facility because of reserves being reduced over time due to expenditure exceeding income.  The sale of property and legacies provided a short-term benefit to the bank balance but did not address the underlying and continuing trend of costs exceeding income.  In recent years Leonard Cheshire has undergone significant expansion of programmes many of which have not been fully funded through full cost recovery and has also made significant investments in IT and improvement of the estate.

It’s only recently that the challenging position on cash has been highlighted through improved financial reporting and is being addressed by the executive team and board with a full understanding of what we must do. We have been exploring all options to address the underlying issues and will continue to do so.

So, in summary, for an extended period we have been spending more cash than we have been receiving overall, and that’s depleted the cash we have in the bank to such an extent that’s it’s just not sustainable anymore – we are running out of cash and we need to make savings of circa £18m in the next 12 months.

I know Leonard Cheshire has been through many changes over the years and many of you have been impacted by the changes. This time however we must sort out this fundamental underlying issue and I’m determined for us to fully address it and then move on with our new strategy.

There are many reasons for the financial challenge such as:

  • rapid expansion of activities without the income to fully fund the activities and the connected staffing structures
  • big investment decisions
  • historically fees not keeping track with rising costs
  • continuing increases in wage costs and large energy price rises
  • the sudden and substantial cuts in sources of UK Government funding for our international work
  • and, more recently, two years of the pandemic hitting our fundraised income and increasing costs such as PPE supplies in England.

What this all means is that we must reduce costs now. We will then be able to move positively forward and grow the impact of the organisation in a way that’s sustainable. But first, we must sort out the here and now. We are engaging with our bank, our regulators CQC (Care Quality Commission) and our auditors PwC. The turnaround plan has been approved by our Trustees, giving the Exec Team the go-ahead to deliver the plan to turn Leonard Cheshire around.

Our residential and supported living services across England, Wales, Scotland and Ireland continue to be in demand by commissioning and local authority organisations. Referrals and occupancy levels are resilient. Whilst it has been an incredibly challenging period of time throughout the pandemic, our management and staff teams continue to go above and beyond, and we are now seeing improved levels of staffing to meet our obligations to our service users. Quality standards remain an absolute priority and we are committed to ensuring the highest standards of care throughout. We need to keep reviewing our financial efficiencies, but we will be protecting jobs in this area of our work from the changes we have to make now.

I recognise things are unsettling and I really appreciate your support, as we get Leonard Cheshire back on an even keel. Several cost control measures have already been implemented across the organisation and are already making a difference in reducing expenditure, for example restricting usage of credit cards and tightening approval of purchase orders, while others are still being worked on. Although these all help, they won’t deliver the scale of savings we need to find.

There are effectively three phases we are going through:

Phase one: understanding the situation and how it happened, putting in place disciplines to stop it continuing to happen going forward.

Phase two: Cost reduction, including reducing our staff numbers, and continuing to maximise income from the Annual % Fee uplift from Local Authorities and generating funds through selling surplus properties.

Phase three: looking to the future and the new strategy.

We have been in Phase one and still are and Phase two is starting now and will run concurrently. Being realistic, we probably won’t get to Phase three for another 9-12 months, and the next few months will be difficult.

Phase two next steps

We are looking at selling some of our investment properties to release funds, these are not frontline services. But that won’t get us far enough and is a one-off cash injection, whereas we need to reduce our ongoing monthly costs.

Our single largest cost across Leonard Cheshire is the payroll and so we must reduce our staff numbers in order to create a more financially sustainable organisation. Due to the extent of the financial challenge, I am sorry to say that we cannot avoid taking this very difficult step.

Where possible, we are determined to reduce the number of compulsory redundancies, so, in the first instance, we will offer voluntary redundancy to all staff who are not working within our residential and supported living services. The process, terms and timeline for the voluntary redundancy are included at the foot of this email.

What happens after voluntary redundancy?

When we have confirmed the number of people leaving under voluntary redundancy, and taken into account other financial measures, we will review our financial position and come back to you with next steps. We cannot be definite today, but we want to be absolutely transparent with you that we may need to make further changes at that time through a compulsory redundancy programme.

The terms set out in this email apply only to this voluntary redundancy programme. We cannot at this time enter into any discussion about these potential future steps, nor can we comment at all about the terms of any future redundancy programmes including guarantees on the terms of future redundancy payments as we are not at that stage yet.

I know this email will be disconcerting and I wish we weren’t in this situation. We will do everything we can to minimise job losses at all times. I consider these as a last resort and am always mindful of the impact it has on people.

The important thing is we sort out our current financial situation, as it can’t continue. We owe it to the people we are here to serve today and tomorrow, as well as to all of you.  Whilst doing it, it’s important we remain connected as one team and support each other. Whilst we go through this difficult period, I ask that we all try to keep focused on delivering our priorities and commitments to the best of our ability. Leonard Cheshire is a great organisation delivering vital work that makes a massive difference to people with disabilities, and it’s important that we keep focused on that.

It’s going to be a difficult few months, I wish I could say it won’t be. I’m confident by doing this we will strengthen this wonderful organisation and build the foundations for sustainable growth and increased support. It’ll enable us to then deliver a heightened level of impact in the future through a reshaped and revitalised Leonard Cheshire. Transformation is right at the heart of the new strategy being developed, which will engage disabled people, other external stakeholders, and our staff in its shaping. In parallel to the turnaround plan, we are continuing strategic discussions with potential partners and funders around many of our flagship programmes, which have great potential to advance the opportunities for many disabled people.

On a final note, I want to say that I really appreciate everything everyone is doing. I know we are all passionate about what we do because of the change we make to people’s lives. There are things we need to sort out and these decisions won’t be easy, but once we’re through this period we can focus on taking Leonard Cheshire forward and growing our impact together.

Very best,

Ruth

 

tl;dr

  • They are £18m per year in the red, and operating on an overdraft;
  • Due to a number of factors, some mis-management.
  • Selling off the family silver (I.e. Buildings etc.) only temporarily shored things up.
  • They need to make massive redundancies, both voluntary and compulsory.
  • They won’t be making any such redundancies of people working in care homes and supported living.

She emailed staff again on 4th April.

Dear colleague,

I’m mindful that it’s time to keep you up to date with developments on the turnaround plan, following the closure of the voluntary redundancy (VR) window.

With the nature of the programme being voluntary, there wasn’t an expectation for a certain number of people to come forward. During the fortnight, around 170 people stepped forward for VR, of which around 140 applications were accepted.

Read More
These came from across the organisation, from every directorate and at every level. Last Thursday we started to say goodbye to colleagues, a poignant moment. Others are leaving over the next couple of months to aid a smooth handover and managed transition. As I said in my blog last week, some roles we were unable to lose, and it was a bittersweet process to go through – losing brilliant colleagues although knowing that these processes will get us to the place we need to get to – a financially sustainable Leonard Cheshire.

Due to the large number of applicants that came forward for VR, we are regrouping to work through what the next steps will be. We not only need to reduce our monthly ongoing monthly expenditure, but we need to make sure the organisation can function, and although it may be frustrating to wait for more information, we simply aren’t in a place to announce the next steps yet. I can say that I don’t expect to be making any announcements before Easter. I hope that means you can take some time out to relax and recharge.

To give you some insight, we have some areas that will lose a high proportion of people, and new ways of working need to be defined as a result. Other areas didn’t have as many people come forward and we need to work through what it means for them too. Not only that, we have a very complex organisation with a huge number of interdependencies adding extra layers of considerations to be taken into account.  We need to sort these things out with urgency but do it thoughtfully. It’s inevitable we will get some things wrong but I’m hoping we can avoid it as much as possible.

Financial update

In the last announcement, we let you know that we need to take £18m of annual expenditure out of Leonard Cheshire in the next 12 months. I wanted to update you on this because it’s only fair to keep you in the loop.

We have been working tirelessly, looking at every contract we hold, which is a huge piece of work. So many of you across the organisation have come forward and told us of unfavourable terms – paying £35 for an air freshener you can buy for £5 elsewhere, tradesmen travelling from Birmingham to Devon to do basic building maintenance, and other complete inefficiencies. We can’t continue to simply absorb these costs and are looking at ways to improve internal processes where relevant. We also must maintain our quality standards and not affect the delivery of our frontline services. We are constantly looking at ways we can be more efficient. Thank you to everyone who emailed the turnaround team with your money saving suggestions, we are looking into all of them. Do get back in touch if you have more.

At the beginning of the year, we identified a number of surplus properties to go to auction over the next month or two. Two have now been sold and there’s work ongoing to sell others although the timescales for these are not currently agreed.

There has been a lot of talk about the offices we hold at South Lambeth Road in London and Waterloo Court in Wolverhampton and whether it’s viable to keep these running. There hasn’t yet been a decision made on whether we’ll continue with the leasehold arrangements, although it’s looking increasingly likely that keeping the current office spaces in the longer term isn’t going to be cost effective.

It’s very hard to put an accurate figure on the savings we’ve identified so far because of the many variables, but it’s looking like we are already on track to save around £9m of annual operating costs.

Coming back to the turnaround programme as a whole, I continue to work closely with the bank and our governing bodies and they’re supportive of our plan. I want to reassure you that we are making good headway and going in the right direction, although sadly there will need to be some further adjustments to staff levels in some areas. I sincerely hoped this wouldn’t be the case.  We don’t currently have all the answers but are working to get there. I know there is a feeling of ‘treading water’ and uncertainty, I can only apologise for that. All I can say is that things are progressing, and we are working hard to make the picture clearer for you and will come back to you as soon as possible.

In everything we are doing, the changes we are having to make, I always keep in mind the people we are here to serve – everyone whose lives we are transforming and the difference we want to make for them in the future. It’s hard to reconcile having to make the cost savings we must, with our size of ambition and the gap in society that organisations like ours need to fill.  We are maintaining the highest level of quality in our services and will continue to do so. And I am clear that if we have no choice but to exit programmes, we will do it as responsibly as we can.

With kind regards,

Ruth

 

tl;dr

  • They think they’ve cut their original £18m loss per year in half.
  • This is by 140 voluntary redundancies across the organisation, except for in residential care and supported living. (They refused 30 voluntary redundancy requests.)
  • Some of these staff have already gone.
  • The organisation will have to reconfigure given the staff losses.
  • One or both of their offices in London and Wolverhampton will likely have to go.
  • They are having a think what to do now.

I have to say I think this is positive.

I think it is extraordinary that an organisation can cut 140+ staff without cutting those actually involved in service provision at the coal face. This is part of the problem to me: too many middle and side management and staff whose roles are nebulous at best, and whose benefit to Actual Residents even less. 

I’m sorry for any of those staff that are going that are decent. I’m not sorry for others; just sorry that more of the unaccountable, patriarchal and Teflon management hierarchy appear to not have gone. Yet.  (You know who you are…)

Accessibility of the LNER “Wellness Train”

LNER have been pushing their “Wellness Train” for some weeks now.

(one wonders if she / the customers will be keeping their clothes on)

There are serious concerns about the accessibility of this event. I therefore tweeted Freedom of Information requests for the relevant Equality Impact Assessments.

They have now sent me their LNER Wellness Train Equality Impact Assessment FOI response. (As my request was public, I thought I would make the response public too).

I think it is… interesting in what it reveals. Some key comments (emphasis added):

  • “Can we maybe invite (redacted) or discuss with him guidance on the compliances for wheelchairs
    access as I believe we would be in breach
  • “we should not use coach A for walk on or regular online sales as customers with wheelchairs will not be able to get off at Lincoln (the train hangs off platform after coach H)”
  • “I know you’re in the process of doing an EqIA for this wellness train. I’m a bit concerned that it’s already planned and advertised and that this process is supposed to be signed off before that happens
  • “we are currently in a position where we are launching the event before an EqIA has been done. This means we have failed to consider our obligations under the public sector section of the Equality Act. If we do receive any challenge, this immediately undermines any ability to defend and is a breach of the law in itself.
  • “how are we making reservations available for non-event passengers who need a wheelchair space on that train? If we don’t do this, we are in breach of our license. 10% of all seats on the unit must be unreserved priority seats, even in event carriages. How are you ensuring this is the case?”
  • “how are we reassuring ourself that the trainers/instructors are competent to train someone who is blind, deaf, on the autism spectrum, etc.? How are we engaging with these suppliers too, are they deemed ‘contractors’? We have obligations to deliver training to anyone representing LNER who directly interacts with customers under our license”
  • “how are we selling these EventBright tickets? If I go into a travel centre can I get them? If I call the contact centre can they offer these? If this is online only then it is a potential Equality Act breach. We have spent a lot of time and money on the accessibility of our platform. How are we reassured about this for EventBrite?”
  • “there is a celebrity in attendance for one of the carriages. If a wheelchair user picks that event and is in a different carriage, will they get to meet the celebrity? How is this planned?”
  • at some point some other person reckoned that the event is Fully Inclusive – NO RISK“. A view evidently not shared by the Accessibility and Inclusion Manager (who as revealed in this, is excellent, as expected)

It’s pretty clear that this whole thing was put on without thinking of the accessibility implications, then they have had to attempt to retrospectively bolt-on adjustments and justification – which never really works. Accessibility should be designed in from the start in everything anybody does, and in particular anything a publicly owned body such as LNER does.

However I understand that the lessons from this debacle have been learned, or certainly are being learned, as is made pretty clear in the release:

  • Once we have completed our event we will look for feedback from the cm who attended the event, with this information we shall look to implement any changes (where possible) for any future events. In addition to this there will be a full debrief of the event with the Accessibility & Inclusion Manager, Senior Customer Relations Manager and Events Manager to look at lessons learned.
  • “Moving forward for future appropriate events these will be discussed within the accessibility forum.

So I’m not going. (aren’t I a good boy!)

I remain sceptical as to how many people will pay £50 to turn up in Kings Cross at 08:06 to travel to Lincoln whilst doing adult doodling etc. on a normal service train. I suspect this may well prove a flop – but we’ll see.

I’ll certainly be very surprised to see anything like this happen again. It damn well shouldn’t; treating accessibility as an afterthought is never acceptable.

“Silencing” warning letter from RDG to TOCs

Somebody sent me this. (Thank you, sender!)

Email from RDG legal to TOCs 07/04

Dear All

Some of you are subject to FOIA and some are not; I’m writing to you all anyway.

Our Accessibility & Inclusion Manager has pointed out that there is a “campaign” to get information about TOC activities, conducted by a well known activist.

You can find more information here: https://www.whatdotheyknow.com/user/doug_paulley

In particular, he highlights: – https://www.whatdotheyknow.com/request/contents_of_rdg_accessibility_em#incoming-2013074https://www.whatdotheyknow.com/request/members_of_accessibility_group#incoming-2000723

Can I remind you all that disclosures under FOIA are subject to a number of exemptions, some absolute and some not, and that the confidentiality of the information is material.

Discussions between TOCs, emails from RDG, minutes of meetings, etc are all confidential information and we could not function as a member organisation if we did not respect the confidentiality of the discussions and decisions.

In addition, if you are subject to FOIA, please remember that you should not be disclosing personal information, including the names of people involved in any meetings or correspondence. We have recently had an upsetting accusation against a member of staff whose details were disclosed under FOIA, and we have instructed Carter Ruck to help with the consequences.

If you are disclosing information under FOIA, please check whose information you are disclosing and please check with the owner of the information whether there are valid objections.

So much for RDG claiming they “support the principle of transparency and putting more information in the public domain“. They are responsible for substantial national rail infrastructure, yet aren’t subject to the Freedom of Information Act. There’s nothing nefarious or “wrong” about seeking information on decisions regarding accessibility of our railways.

Now they are attempting to enforce false limited transparency on our nationalised train operating companies when responding to Freedom of Information Requests.

As established in my earlier blog, all of LNER, Network Rail, Northern, Scotrail, South Eastern, and Transport for Wales, being publicly owned companies subject to the Freedom of Information Act, quite correctly considered that information disseminated via RDG e-groups, relating to decisions on national infrastructure service provision for disabled people, is disclosable under the Freedom of Information Act.

Claiming something is confidential doesn’t necessarily make it so, nor does it make it non-disclosable under the Act. Personal data is not automatically exempt under the Act either. The exemption for personal data is subject to a Legitimate Interests Test.

However, the Information Commissioner, the Government and others have over time made clear that some personal information relating to public employees’ public roles in particular should be disclosed. For example, the latest version of the Local Government Transparency Code requires salaries of council staff earning over £50,000 to be made public. Clearly there is a consensus that accountability of (especially senior) public officials is a legitimate interest.

Public authorities such as publicly owned train companies: as you know, you are required to do your own assessments of what you are allowed or required to supply under Freedom of Information requests. The primary intent should always be openness and transparency in public life, including in communications and decisions in the important area of accessibility of public transport. As you have demonstrated admirably thus far (with the possible exception of Transport for Wales…)

Also please note that I’m nerdily comparatively knowledgeable and adept at data protection and Freedom of Information law. I know people who are even more so. Through my thousands of Freedom of Information requests and my many years as an administrator at whatdotheyknow.com I have a lot of experience and info at my disposal. If necessary, I will challenge redactions, refusals and other failures to comply with my requests, as I have previously – to decision notices and to the information Tribunals. (Though I would very much rather not have to.)

Personal attacks

As for “We have recently had an upsetting accusation against a member of staff whose details were disclosed under FOIA, and we have instructed Carter Ruck to help with the consequences.

This clearly refers to my comments on Dominic Lund-Conlon.

I don’t relish or enjoy calling out an individual on here. However, it is time for somebody to stand up to this non-performing patronising bully. I’ve never heard anybody say a complimentary word about him, but I have heard a very lot of disturbing things about his unpleasant demeaning attitude and actions, and I’m aware that there are many tens of rail employees and disabled people who are entirely behind me.

Sadly, my criticism, public research and published concerns are legitimate. In my opinion, the man has done enough damage, through his apologism for endemic industry ableism, through gaslighting of other disabled people and through bullying of his industry colleagues. It is time that this should stop. Others aren’t in a position to speak out publicly. I am.

Carter-Ruck have simply run up a big bill on the public purse whilst actively making the situation “worse” / much more public.

The Customer Information Group (CIG)

I no longer believe that the decision to cancel and refuse all assistance bookings during Storm Eunice was made by the CIG (as claimed by our Dom via his lawyers)

After speaking today to a lot of personnel from across the rail industry, it is clear that members of the CIG are very aware that they do not have the power, responsibility or knowledge to make such a decision; and they certainly wouldn’t have made any decision anyway without ratification from their bosses, let alone without ORR approval. Dom’s claim simply doesn’t ring true.

I wonder who really made the decision. Our Dom, perhaps?

What a disgraceful decision, and what a disgraceful attempt to obfuscate who made the decision and how it was made. Spending industry time and money vainly attempting to cover up the putrid rottenness of this particular corner of the rail industry is both immoral and bound to fail.