A charity forced into administration by a crippling pension liability and decreasing income has been forced to cut jobs.
Global financial experts PricewaterhouseCoopers (PwC) have revealed to FE Week that 23 jobs have been lost from Learning and Skills Network (LSN).
Ian Oakley-Smith, David Hurst and Karen Dukes, of PwC, were last month appointed as the joint administrators of LSN, which provides educational expertise for businesses and agencies in the public and private sector across the UK and abroad.
Although it was business as usual for LSN’s staff, the axe has since fallen on 23 jobs, all of which were based at LSN’s head office in Holborn, London.
Prior to the losses, LSN employed 117 staff over five locations – with 48 in London. A further 14 work at offices in Oxford, 16 in Olney, 26 in Cambridge and 13 in Belfast.
A statement read: “PwC can confirm having reviewed the ongoing requirements of the business, regrettably there have been 23 job losses.
“A skeleton staff is being retained in Holborn to help the administrators with queries from interested parties and as support for the rest of the business.
“The administrators are working closely with employees affected by this decision to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments.
“All other staff remaining at LSN have been briefed with the administrators working closely with them over the coming weeks as the business continues to operate as normal.”
The charity’s demise has been partly placed on their turnover of around £13 million for the 2010/11 financial year – which is a substantially smaller figure compared to the £27.5 million during the previous tax year and £42.6 million in 2008/09.
Also, while PwC say LSN have been experiencing “no debt”, the charity has a “contingent pension liability” of around £8 million, which also added to its downfall.
In other words, if every member of staff retired and drew on their pension, LSN would be left with a multi-million pound deficit.
It is for those reasons that PwC say the board of trustees at LSN came to the difficult realisation that they could not carry on any further.
However, the process of selling off the different “business streams” of LSN is continuing.
LSN is made up of separate businesses: Technology for Learning, National Extension College (NEC), Education, Skills and Research, Development Services, Learning and Skills Development Agency (Northern Ireland) and Learning and Skills Network.
A PwC statement added: “The administrators have received a number of enquiries from interested parties and are working hard with these parties to help them assess the financial position of the business streams they are interested in so that final offers can be received.”