During the 2017-18 financial year 89% of receipts were from restricted grants (for a specified use only). Our largest funder was the London Borough of Lewisham (LBL) who provided £29,348 in five separate grants; 68% of all restricted grants and 60% of all receipts.
Overreliance on a single funder is one of LGL’s main financial vulnerabilities. Gross receipts were reduced from 2016-17, when LBL was the source of 66% of receipts, but remains too high a proportion overall. 2018-19 LBL receipt proportions will be reduced further due to Clarion Housing Association grants of £45,000 over 18 months, with LBL and Clarion grants both totalling approximately £30,000 per annum.
Overreliance on LBL will be brought into focus in 2019-20, when our Main Grant finishes. With the Council yet to make a decision on the overall level of funding to the Community Sector, we cannot be sure of continued funding or funding on the existing level. Securing new funding from Clarion strengthens our financial resilience, as part of diversifying our sources for core operating costs.
In 2017-18 87% of all receipts were restricted funds, identical to 2016-17. This is another serious vulnerability for LGL, and this figure will rise in 2018-19 due to increased receipts for restricted funds. The key figures for unrestricted funds are a surplus of £415 in 2017-18 and £1,734 unrestricted cash funds at year’s end. With expenditure of approximately £42,000 in 2017-18 we should have held approximately £21,000 unrestricted funds as contingency, six months worth of expenditure; our actual reserves in 2017-18 were only 8% of this target.
Our situation with restricted funds is far stronger, with LGL bringing £31,353 forward into 2018-19. This reflects effective fundraising, with our advocacy programme and most activities fully funded for 2018-19.
Expenditure grew by 12% in 2017-18, primarily due to a 79% increase in Tutor and Freelance staff costs. Expenditure was reduced in all other areas aside from Insurance and Stationery and Office Costs, and the new expenditure on Consultancy. The increase in Tutor and Freelance staff costs is reflected in the 10% reduction in Staffing costs; this is due to changes in reporting. Overall LGL saw a 12% increase in both receipts and expenditure, and an 11% increase in surplus. Cash funds at year end increased by 24% compared to 2016-17.