The charity which is being stripped of control over Newcastle’s parks made a £700,000 loss last year.
Urban Green Newcastle’s (UGN) latest accounts reveal that it recorded a post-tax deficit of £699,192 in 2023/24, its final full year of trading before Newcastle City Council moved to scrap the trust and retake direct responsibility for the city’s green spaces.
All of the charitable trust’s staff and assets are due to transfer back to the Labour-run local authority on 28 February, after Cllrs gave final approval for the major U-turn last month, with Urban Green set to be wound up.
The decision marks a swift reversal of what was previously hailed as a “visionary” council plan for 33 Tyneside parks and more than 60 allotments, which were handed over to the charity in 2019 on a 125-year lease.
It was hoped that Urban Green would be able to generate more income to reinvest back into the parks and become self-sustaining within a decade, but it is now being abolished after just six years having that it could not survive without ongoing financial help from the council.
The charity’s latest accounts admit that its original funding model was “fatally flawed”, saying that it overestimated how much commercial income could be generated and did not fully account for the “very poor condition” of the estate it inherited.
UGN’s income in 2023/24 fell by £1.1 million in 2023/24 compared to the previous year, largely down to a substantial drop of £900,000 in grants and donations.
The body spent almost £300,000 of the £570,000 of cash reserves that it previously held, reducing them to a level it called “not sufficient to meet the service need and allow the organisation to remain as a going concern”.
Figures reported to Companies House also show a reduction in spending on parks of £445,390, of £59,397 at Jesmond Dene’s Pets Corner, and of £297,284 on cafes.
Meanwhile, spending on the organisation’s governance appears to have increased almost ten fold, jumping by £591,775.
UGN told the Local Democracy Reporting Service that the massive increase in governance spend was due to a recategorisation of areas such as ICT, insurance, and administration costs that were recorded as part of the parks spending in previous years.
Urban Green’s trustees state in the accounts: “The financial model was predicated on the assumption that UGN would be able to create new commercial income streams to offset a reduction in council financial support, allowing the charity to be self-financed by the end of its tenth year. This has not happened for various reasons: the model under-estimated certain costs (especially due to the very poor condition of the estate inherited by UGN) and was overly optimistic about how quickly and at what scale commercial income could be generated.
“But the main challenge was that the charity was launched less than 12 months before the Covid-19 pandemic and associated lockdowns. This shifted focus away from developing new income income streams, concentrated organisational capacity on managing the impacts of the lockdowns on our estate, visitors, and our staff, and increased our costs.
“The medium-term impact is that whilst UGN has made significant progress towards financial sustainability our development is not following the financial model. The trustees have kept the council fully appraised of the financial realities facing the charity and highlighted the departure from the financial model during the appraisal process for financial support as early as 2021, when more funding was drawn down than anticipated by the model. From January 2024 it became increasingly clear that the original funding model was fatally flawed. In reality it is not possible to raise the funds to maintain the parks and allotments on grant or charitable funding and commercial income.”
By March 2024, UGN had drawn down all of the £7.7 million worth of funding the council had offered to help see its through to 2029 and was then given a further £1 million to see it through 2024/25.
The charity predicted that it would face a cumulative deficit of £6.7 million between 2024 and 2029.
Alex Hay, the council’s deputy leader, said: “In recent months Urban Green Newcastle have been sharing relevant information with our officers and meetings have taken place with the staff who will move to the council under the TUPE transfer.
“We expect to complete the transfer of assets and staff by March 1, but we have already started planning for how parks and allotments will be managed moving forward.
“Engaging with those who use our parks and allotments will be key to any plans for their future and we have already begun meeting with relevant stakeholders, volunteers and community groups. We know the positive impact our parks and allotments can have on the health and wellbeing of residents. As always, they will be at the heart of every decision we make.”
