In a dramatic turn of events, Relate, Britain’s leading relationship counselling charity, has been rescued from the brink of insolvency. Family Action, a prominent charity supporting families, has agreed to acquire Relate’s counselling and central services, potentially saving up to 185 jobs in the process.
The move comes after Relate entered administration last month, following a sharp decline in funding from NHS, school, and local authority contracts. The charity, which offers a range of vital services including couples therapy, family counselling, and child therapy, had been struggling to stay afloat amidst rising costs and dwindling income.
A Lifeline for Families
Relate’s services have long been a lifeline for families across the UK grappling with a host of domestic challenges. The charity’s counselling is designed to support individuals, couples, and families through times of change, crisis, and difficulty.
Relate is a lifeline for families across the country struggling with a range of domestic issues. We’re pleased that an unfortunate period of financial uncertainty hasn’t put a stop to that vital work.
Phil Reynolds, Restructuring Advisory Partner at FRP
Preserving a Legacy
Founded in 1938 as the Marriage Guidance Council, Relate has a long and storied history of supporting relationships and families. The charity rebranded as Relate in 1988 and gained further prominence when Diana, Princess of Wales, became its patron the following year.
Over the decades, Relate has helped countless individuals and families navigate the complexities of relationships, offering a safe space for therapy, mediation, and support. The charity’s services have been a beacon of hope for many in their darkest hours.
Financial Challenges
Despite its crucial role, Relate has faced mounting financial pressures in recent years. Austerity-era cuts to public funding triggered a series of restructurings and rebrandings, as the charity fought to adapt to a challenging landscape.
- Relate’s income from public sector contracts plummeted from £1.9m in 2019 to just £338,000 in 2022-23
- The charity’s financial reserves had fallen to less than three months’ operating costs
- Relate reported a £690,000 loss on income of £6.7m in its last published accounts for 2022-23
The COVID-19 pandemic only exacerbated these challenges, as demand for Relate’s services soared while traditional funding streams dried up. The charity found itself in an increasingly precarious position, with insolvency looming on the horizon.
A New Chapter
Enter Family Action, a charity with a 150-year history of supporting families through difficult times. By acquiring Relate’s counselling and central services, Family Action aims to secure the long-term future of these vital support systems.
We are excited about the obvious alignment between Family Action, the charity for families, and Relate, the charity for relationships, and see excellent opportunities for mutually beneficial development for our combined organisations in the future.
David Holmes, CEO of Family Action
The deal, set to take effect on January 1st, will see Relate continue to operate under its own brand within the larger Family Action organization. It’s a move that could pave the way for a new chapter in Relate’s long and impactful history.
Challenges Remain
While the acquisition offers a lifeline to Relate, significant challenges still lie ahead. The charity had previously made 80 staff redundant when entering administration, including 40 therapists. These vital team members will not receive redundancy pay under the terms of the deal.
Questions also remain about the long-term sustainability of Relate’s services in a funding environment that remains difficult for charities across the board. Many non-profits are grappling with rising costs, increasing demand, and stagnant or declining income streams.
A Crucial Service
Despite these challenges, there’s no denying the vital importance of Relate’s work. In a world where relationships and families face unprecedented pressures, access to quality counselling and support can make all the difference.
For the countless individuals and families who have benefited from Relate’s services over the years, news of the charity’s rescue will come as an immense relief. The hope is that, under Family Action’s wing, Relate will be able to continue its crucial mission of supporting relationships and strengthening families for generations to come.
As Relate embarks on this new chapter, the charity’s dedicated team of counsellors and staff will undoubtedly continue to do what they do best: offering a listening ear, a helping hand, and a beacon of hope to those navigating the complex world of relationships. In a society that often feels increasingly fragmented and isolated, their work has never been more essential.
