Red Cross to close scores of charity shops

The British Red Cross is to shed up to 10 per cent of its staff and close 40 shops in a drive to cut costs and direct more money into its work with humanitarian crises.

The charity is also planning to move out of its prestigious headquarters in London's Belgravia, which it considers "inappropriate".

Chief executive Sir Nicholas Young revealed a far-reaching package of reforms set to begin in January. It is aimed at eliminating all loss-making enterprises in Britain – apart from those directly combating crises – including its work in elderly residential care.

A fifth of its substantial property portfolio will be sold over the next three years – including 10 per cent of its shops – and up to 350 posts will be lost from a 3,000-strong staff through a mixture of redundancy and a recruitment freeze that has already begun. "Some will lose jobs through no fault of their own," Sir Nicholas told the IoS. "It is very sad."

The British Red Cross that he inherited in July is an amalgamation of dozens of local Red Cross charities. There is a branch headquarters in most county towns, each running a network of offices and services across each county. From January this will change.

Sir Nicholas believes that the charity does not require such a large infrastructure, nor is it "cost effective" to use cash that would be better channelled into helping people in crisis here and abroad.

While expenditure has exceeded income for the past two years, this is not enough to suggest a financial crisis. Income is increasing annually; the charity wishes to raise an additional £3.5m in 2002.

The Red Cross is keen to reverse the decline in the number of volunteer fundraisers – the vital "can-shakers". It still has more than 50,000 but Sir Nicholas believes that unnecessary bureaucracy has alienated potential recruits. He also wants to encourage younger volunteers, and recruits from minorities.

Proposed changes – including radical "territorial" reorganisation – will not come without pain. The chief executive and board of trustees warned the staff of the Red Cross that it was "inevitable" some of them would lose their jobs and others would have to relocate to new offices.

The Red Cross owns 1,100 properties in the UK worth over £60m. Around a fifth will be sold over the next two to three years. Included in the closure program will be up 40 of the Red Cross shops. A deciding factor will be the costs associated with making them comply with the new Disability Discrimination Act.

Sir Nicholas recognises that the closure programme could upset some of the grass-roots volunteers the charity is so keen to retain. "I can't pretend it will make them happy."