Leeds debt charity StepChange job cuts amid funding shortfall leave Unite union 'dismayed'

Leeds debt charity StepChange is laying off up to 170 staff as it makes compulsory redundancies in response to funding troubles, its chief executive has announced.

Described as one of the region's largest voluntary sector employers by trade union Unite the national charity offers expert debt advice and fee-free debt management.

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It is understood all staff were told on Wednesday that they are at risk of redundancy as the workforce is cut by around 10 per cent, with between 140 and 170 jobs expected to go.

Debt charity StepChange has announced compulsory redundancies in response to funding shortfalls. Credit: Brian Jackson/stock.adobe.com

Chief executive Phil Andrew said: "We are not immune from the wider pressures arising from Covid, despite the significant additional support we have received from Government and other sources during the pandemic."

The charity's income is based upon how many clients it helps, with those volumes affecting the level of government and devolved authority funds received as well as the amount received from creditors in recognition of its work to support people in repaying their debts.

StepChange said it had supported 200,000 clients across the UK in 2020, compared to more than 300,000 the previous year.

Mr Andrew said: "The Government, the Money and Pensions Service, and the debt advice sector itself were expecting a huge wave of demand to materialise once the emergency support measures fade away, and we still do.

"Based on 2021 experience to date, however, our original expectation of advising 400,000 clients this year is not going to materialise."

While they expect a spike in demand when measures such as employment support, benefit uplifts and credit payment deferrals come to and end, the delay in demand rising means the charity itself is now under financial pressure.

Noting a "significant shortfall in funding", Mr Andrew said: "The fact that we expect demand to increase in the future doesn’t change this current reality.

"As a prudent charity, we will not compromise our financial stability by relying on future funding to support our current operating costs."

As well as making redundancies, the charity still has staff furloughed through the Government's Job Retention Scheme and has frozen pay.

Mr Andrew said: "In the short term, this approach of cutting our cloth to fit comes with a high degree of pain for us as a caring employer. It is not what we would have wished to do, even though it is absolutely the right thing to do."

Reacting to the announcement, Unite's West Yorkshire and Humber Community, Youth Workers and Not-for-Profit branch said: "Our branch members are dismayed to hear that StepChange Debt Charity plans to make 10 per cent of its workforce redundant, and impose a pay freeze on remaining staff."

Its statement posed a number of questions for the charity, including why it had moved to making compulsory redundancies immediately instead of seeking volunteers.

It continued: "Unite will support our members at StepChange in whatever action our members decide is required.

"We encourage all workers at StepChange and other voluntary workplaces to join a union. We are far stronger together."

The news comes within a week of an announcement that Breast Cancer Haven is suspending services at its Leeds centre and others nationwide as it consults on redundancies.

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