Charity’s regeneration project falls into administration

Blair Nimmo, partner, and Alistair McAlinden, director of KPMG have been appointed as joint administrators of The People’s Development Trust, a regeneration charity based in Glasgow which has experienced significant financial difficulties and ceased trading

The Trust was established in August 2011 as part of the regeneration of the east end of Glasgow linked to the Glasgow 2014 Commonwealth Games. The aim of the registered charity is to engage with and support the local community and to deliver a range of economic, social and environmental services.

It owns the Legacy Hub, a purpose built community centre which provides a range of services including a children’s nursery, training and adult education facilities, and a suite of rooms and theatre for hire for business, recreational and social purposes. The Hub also hosts a community café, GP surgery, pharmacy, and dentist.

The Trust, which is funded via a combination of grant income, charitable donations and from commercial income from third party tenants and the nursery, has incurred trading losses over recent years. This is primarily due to the nursery operating at under capacity, and insufficient charitable and grant funded projects being undertaken to support overhead and building costs.

The board of trustees sought to address the financial issues by seeking additional commercial income and alternative nursery provision to address operating losses, together with third party funding to settle liabilities and provide working capital. Despite these actions and extensive discussions with a number of third parties, sufficient funding could not be secured, and the board had no other option than to place the Trust, which employs 25 people, into administration.

Following the appointment, 23 employees have been made redundant. Two staff have been retained to assist the joint administrators. At this time the GP surgery, pharmacy, dentist, and Scottish Sports Futures continue to operate. All other services, including the nursery, café, room hire, and training and adult education activities have ceased.

Blair Nimmo, joint administrator and KPMG’s UK head of restructuring, said: ‘Unfortunately, The People’s Development Trust was unable to continue trading in light of significant liabilities and cashflow difficulties. This has, in turn, resulted in the redundancies which have been announced and the closure of a number of services provided by the Legacy Hub.’

Report by Pat Sweet

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