Crown Agents shuts down

Crown Agents, one of the largest suppliers of development services to the U.K. government, has announced that it will close its operations with immediate effect. The not-for-profit company, which employed around 340 people, said in a statement on its website that it had been struggling with a £50 million pensions deficit — equivalent to almost a year’s revenue — as well as cuts to British official development assistance, and a frustrated contract in Ukraine. Devex exclusively reported last week that the company was expected to close. Executives are understood to have spent the last week seeking alternative providers to take on vital humanitarian and health contracts. A spokesman said: “25 of our largest contracts have successfully been transitioned to new providers in close liaison with institutional donors, UN agencies, foundations and multilaterals. These have included programmes in South Sudan, Sierra Leone, Nigeria and Zimbabwe." A significant number of staff are expected to transfer with the contracts and remain in employment, but it’s not yet confirmed how many will do so. The company is understood to have paid staff 50% of the wages owed for July last week. There is no information on whether the rest of those wages have been paid. A statement on the U.K government website said that the Official Receiver has been appointed as liquidator of the company, as well as an associated company, Greenshields Cowie & Co. The statement said that U.K. nationals and foreign nationals working in the U.K. could apply for unpaid wages and redundancy payments, but foreign nationals working abroad for Crown Agents will not be covered. Devex asked the Foreign, Commonwealth & Development Office about the status of its contracts with Crown Agents. An FCDO spokesperson said that there are “appropriate contingencies in place” to mitigate the impact. Integrity Action, a charity that merged with Crown Agents last year, said it was unaffected by the liquidation and its activities would continue as normal. However, as yet there has been no announcement from Crown Agents International Development — the other charity within Crown Agents Group, which is housed in the same offices as Crown Agents Limited, and whose accounts are currently almost three months overdue with the U.K. Charity Commission. Crown Agents was formerly owned by the U.K. government and was spun out as an independent social enterprise in 1997. It inherited the pensions liabilities of government staff, but was not properly protected against the significant risks that came with them. As a result, the company has spent months searching for finance to keep the doors open. Despite a restructuring in March, it ultimately failed to attract the investment needed. The company paid tribute to staff in a statement on its site. “To our incredible team, past and present: your unwavering dedication, passion, and expertise have been the cornerstone of our impact,” it said. “Your tireless efforts have left an indelible mark on the world and have touched countless lives. “To our partners and clients: your trust and collaboration have been invaluable. Together, we have navigated challenges, celebrated successes, and created lasting impacts that will continue to benefit communities for generations to come. “While our chapter ends here, the legacy of Crown Agents will live on through the sustainable systems, capacities and partnerships we've helped to build. “Thank you for being part of our remarkable journey.” Aug. 2, 2024: This story has been updated to clarify that the statement about the official receiver was published on the U.K. government website.