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London, September 6 2022 - Save the Children UK’s income fell by £49m last year as Covid-19 and conflicts around the world disrupted the flow of aid to programme work, its annual report discloses today.

The charity, which raised £240m in 2021 compared with £289m in 2020, expects income to rise this year.

However, Covid restrictions in the early part of last year hit Save the Children shops and fundraising events. While support from individuals, legacies and communities held steady, there were falls in income from institutions, corporates, major donors and trusts.

The sharpest decline (£28m) was from institutional donors. The report blames disruption to programmes not only from Covid, but from conflicts in Myanmar, Yemen and Afghanistan, along with the effects of the merger of the Foreign Office and the Department for International Development and subsequent aid cuts.

The charity’s shops lost £500,000, compared with a loss of £4m in 2020, the first year of lockdown. They are forecast to return to profitability this year.

Francis D’Souza, the chief financial officer, said “Our performance in 2021 was affected by an exceptional combination of factors. The position is improving in 2022 as fundraising and trading recover. We’ve also seen an incredible outpouring of generosity towards families driven from their homes in Ukraine.”

Save the Children stopped making deficit payments into its pension fund, which showed a surplus at the end of 2021. But a potential liability dating back to the 1990s has been identified by the pension trustees, who are clarifying the position. The report says payments to address any new deficit would be expected to be at a similar level to those of previous years.

The charity spent £236m last year - £203m on charitable activities including programmes in the UK and internationally. It supported 43m children around the world with work ranging from health and education to provision of basic food and water for those in greatest need. It also responded to 103 humanitarian emergencies in 80 countries.

These included Myanmar, which has seen a disturbing rise in violence against children following the military coup in February 2021. Reports of around 100 children killed are believed to be an un under-estimate and 5m more need humanitarian assistance.

Two Save the Children staff were killed in an attack by the military on Christmas Eve while they were working on an education project.  The report says: ‘We continue to push the UK government to hold the military regime in Myanmar to account.’ 

In an introduction to the report, Gwen Hines, the chief executive, and Dr Tsitsi Chawatama-Kwambana, the chair, say the conflict in Ukraine, where 7.5m children have been put at risk of physical harm, severe emotional distress and displacement, has sent global food prices soaring.

They warn that the crisis, combined with severe drought linked to climate change, has left 5.7m children ‘one step away from famine’ in East Africa.

In the latest disaster linked to the climate crisis, Save the Children is responding with life-saving activities in Pakistan, where more than 400 children have died in the worst floods in decades. More than 16m children have been severely affected by the destruction of homes, schools, health care facilities and livelihoods.