Perth charity PKAVS said it has taken steps to address a financial crisis which saw its cash reserves plummet.
PKAVS – Perth and Kinross Association of Voluntary Service Limited – has operated for more than 50 years, supporting thousands of carers and people experiencing mental health difficulties. It also runs Shopmobility and The Big Hoose foodbank.
Newly published accounts for the charity show a sharp deterioration in its finances. General unrestricted funds fell from £196,000 to less than £25,000 in the year to March 31, 2024.
Trustees said this had a “substantial impact” on its activities and warned there was “doubt on the charity’s ability to continue as a going concern”.
What are the reasons for PKAVS financial troubles?
The charity, which employs almost 80 staff, saw cash in its bank accounts decline from £431,000 to £141,000 during the loss-making year.
Chief executive Shaheena Din said: “Like many charities, PKAVS is navigating a challenging operating environment, especially in the wake of the Covid-19 pandemic.
“Key contributors to our financial position include certain fixed costs unrelated to direct service delivery straining our unrestricted reserves.
“The need for our services has grown significantly, and we have expanded our offerings to meet this demand.”
PKAVS takes action on finances
During the 2023/24 financial year, PKAVS had income of £3,091,000 and expenditure of £3,241,000 resulting in a £150,000 loss. Almost three-quarters of its income is government grants.
Ms Din, who took up her post in September 2023, said financial stability is a core objective in a new strategic plan.
She said the board now conducts regular reviews of costs to ensure value for money.
There is also enhanced financial oversight, with a new treasurer on the board. Meanwhile, a new fundraising manager has been recruited to diversify and enhance its income streams.
It is also in talks with another voluntary organisation about entering a partnership.
The charity Mindspace moved into space within PKAVS building The Gateway on North Methven Street in March last year.
The chief executive said that almost 10 months into the new financial year, the various arms of the charity were now either breaking even or making a small surplus.
Ms Din is confident PKAVS will be “able to continue”.
She said: “Despite rising costs, including increases in National Insurance contributions and the real living wage, PKAVS remains committed to sustainability.
“Currently, all our services operate on a sustainable model, either breaking even or generating small surpluses.
“The progress made over the past 10 months is encouraging, and we remain confident in our ability to continue.
“With the dedication of our committed staff and passionate volunteers, we provide essential services to unpaid carers, individuals recovering from mental ill-health, older adults, the local third sector, and volunteers.
“Our focus remains on ensuring PKAVS can provide the high-quality services to our clients for years to come.”
Conversation