The Source: Redundancy warning for staff at Sheffield training charity

Staff at a Sheffield skills provider have been warned they face redundancy due to a three-year wait for an insurance claim linked to the pandemic.

The Source Skills Academy says last month it received a ‘drastically reduced’ settlement for loss of income after being forced to close during Covid lockdowns.

It has also been hit by the cost-of-living crisis and a fall in apprenticeships due to the economic downturn, according to chief executive Tricia Smith.

The charity, on Sheffield Road, Rotherham, has 23 staff, and 169 apprentices and 23 learners on its books.

Ms Smith said they were fighting to prevent compulsory redundancies and the closure of training schemes.

She added: “After considering all options, it is with great sadness we have concluded there is a risk we will be unable to continue to provide work for our employees and may have to make compulsory redundancies across all departments, with everyone likely to be at risk.

“Having to give this news to our talented and hardworking team, and to be considering the closure of a charity which has transformed thousands of people's futures is devastating and we are exploring ways of saving as many employees as we can.”

The Source had business interruption insurance, Ms Smith added.

“It should have mitigated losses we sustained during the Covid pandemic, but frustratingly it took insurers over three years to settle our claim and the amount received was less than 20 per cent of the income lost. It has left a huge hole in our finances.

“We know many other businesses have been similarly affected by the insurance industry. Sadly for our charity this has led us to an unsustainable position.”

The organisation downsized from Meadowhall Way to more compact offices at Magna in September to reduce overheads, she added.

Since its launch in 2003, it says it has worked with 5,642 apprentices and 4,099 workers at local businesses, including AESSEAL in Rotherham and B.Braun Medical in Chapeltown.

A staff consultation process will run during December, Ms Smith said.