Social enterprise struggling to cope after losing £100,000

Major cuts are likely at the social enterprise company COPE this year, after a significant reduction in the funding it receives from the council.

But rumours about where these cuts might fall have been dismissed by the chairman of the organisation’s board of directors.

Jimmy Smith explained that “absolutely no decisions” had been made about how COPE might respond to the loss of more than £100,000 of core funding. The council had given the company another three months to come up with a viable plan, he said.

The reduction comes from two different sources. Until this year, £52,000 had been received from infrastructure services, “because we dealt with a lot of scrap, which we took in, refurbished and put out,” said Mr Smith.

That money has now disappeared entirely.

In addition, “we used to get £128,000 from the economic dev­elop­ment unit out of their surplus. And because we’re a charity we could claim the tax back on that, which put it up to £256,000.

“Now they’ve cut it down to £100,000, so we’ve lost £28,000 from the council and £28,000 from the tax man.”

In total this means a loss of £108,000, which Mr Smith admitted was “a lot to lose out of our budget”.

“Luckily we have a grant from the charitable trust, and that covers the rental of our building and some of the administration staff, but it does not cover any of our participants or our support workers.”

The inevitable result of this change is that cuts will have to be made, and the organisation is in the process of discussing possibilities with staff, participants, the council and the Erik Gray Centre, with which they work closely.

“We’re going to have to trim the business down” said Mr Smith, while “minimising the effect on our participants”.

“We’re looking at everything – the entire company. We’re discussing with staff to see if they can come up with ideas to keep parts of it going rather than close.

“It’s a difficult situation. We just canna afford to keep going the way we’re going, so there will be changes.”

COPE runs a wide variety of businesses, including the cafe/takeaway Karibuni, Shetland Soap Company, the Shetland Scrapstore, a pet supplies shop and a plant nursery.

Some of these operations are “very successful”, according to Mr Smith. “We actually cover more than 50 per cent of our costs with what we sell to the general public, though there are bits of that which we think we can do much more efficiently.

“The soap company’s had a big refurbishment recently; Last Ditch­ology is a very successful part of the business; the Scrapstore is doing well … But we’ve got to look at the whole thing because we may be able to transfer participants from one section to another.”

Mr Smith believes this success also means that COPE can provide a “better value” service than the alter­natives to which the council will now have to turn.

Ultimately though, cuts will have to be made; and while decisions have not yet been taken, it seems inevitable that the impact of those cuts will be felt by staff, participants and the public.