17 hours Ago By The Guardian
Britain’s biggest relationship counselling charity looks likely to be rescued from insolvency under plans for it to be taken over. Last month, after a collapse in its funding from NHS, school and local authority contracts. On Friday, the administrators, FRP Advisory, announced that the families charity Family Action has agreed to buy Relate’s counselling and central services.
It claims the move will save up to 185 jobs when Family Action takes over on 1 January. A third of Relate’s workforce – 80 staff including 40 therapists – were made redundant with immediate effect when it entered administration in November. Many of these staff learned of their fate on a Microsoft Teams call with the management.
None of the sacked staff will receive redundancy pay from the charity under the terms of the administration. Longer-serving staff who have lost their jobs have been advised to apply to a government redundancy scheme for compensation. The administrators made no mention of these posts as part of the takeover bid.
The future of the sacked staff will be a decision for Family Action in any future hiring decisions. All those made redundant are being supported by FRP. There is growing concern about the financial future of many charities as with rising costs and demand, and declining donations and .
Relate offers a range of services, including couples and relationships counselling, family counselling, mediation, child therapy and sex therapy. About a third of its counselling was funded by public sector contracts, with the remainder from means-tested fees, typically between £83 and £130 a session for face-to-face adult relationship counselling. The charity will continue to operate under the Relate brand.
A federated network of local counselling services it supports – the Relate Federation – remains separate and financially independent from the entity acquired by Family Action. Family Action is a large charity running a range of services under contract to local and central government, including children’s centres, advice lines and breakfast clubs. Announcing the accelerated sale, Phil Reynolds, a restructuring advisory partner at FRP, said: “Relate is a lifeline for families across the country struggling with a range of domestic issues.
We’re pleased that an unfortunate period of financial uncertainty hasn’t put a stop to that vital work. “Family Action’s track record of supporting families through change, challenge and crisis dovetails well with Relate’s mission and we’re optimistic that this deal gives the charity the foundation it needs to return to a stable footing.” David Holmes, the chief executive of Family Action, said: “We are excited about the obvious alignment between Family Action, the charity for families, and Relate, the charity for relationships, and see excellent opportunities for mutually beneficial development for our combined organisations in the future.
” Relate was set up in 1938 as the Marriage Guidance Council. It became Relate in 1988 and a year later Diana, Princess of Wales increased its profile, when she became its patron. Its president is the celebrity therapist Anjula Mutanda, and past presidents include the actor and comedian Ruby Wax.
Relate’s finances have been under pressure for the last few years, with austerity-era cuts in public funding triggering a series of restructuring and rebrandings, including in 2017 when a third of its federated centres were merged into the central charity. Its last published accounts, for the year 2022-23, showed a £690,000 loss on income from its services of £6.7m, while Charity Commission filings showed its income from public sector contracts fell from £1.
9m in 2019 to £338,000 in 2022-23. Levels of financial reserves had fallen to below three months’ operating costs..
