Steps To Work charity hits out at 'campaign to discredit hard work'

And how Inside Birmingham is changing

A West Midlands charity that helped the long term unemployed into work has gone bump this week, becoming voluntarily insolvent. Liquidators have been appointed for Steps to Work, based in Walsall.

Its demise comes amid claims about its management and potential conflicts of interest, all vehemently denied by the charity, which says it is on the receiving end of a campaign to discredit its hard work. They say their CEO Paul Cadman, a well known entrepreneur in the city who only this week was among the exclusive invitees at the Prime Minister’s pre-budget gathering in Birmingham, is the victim of ‘a vendetta’. Police are investigating a claim of harassment.

In today’s Inside Birmingham with Jane Haynes newsletter we look at the facts behind the demise of a landmark charity. Please read on for the full story.

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First, some personal news. I was thrilled to learn I’d been shortlisted for a prestigious British Journalism Award - the media equivalent of the Oscars - for my work as a journalist in Birmingham. My submissions are three examples among hundreds of stories I’ve written this year that provide exclusive and detailed insights into social affairs in the city, and I’m exceptionally proud of the accolade.

To be honest, it’s been a challenging month for me personally so this shortlisting was a real fillip. In work, too, our industry and the popular mainstream operation I work for has been facing barbs from all sides.

Delivering online news every day in the current climate without asking readers to pay for it is a challenge, no doubt. At a time of declining revenues, news websites that rely on advertising will inevitably become more ad-heavy. There is also the constant challenge of keeping readers engaged and visiting news sites, and navigating the vagaries of google algorithms.

On any given day in Birmingham you’ll find local stories about neighbourhood disputes, council exposes, murders and mayhem, traffic delays and rubbish mountains, politics, football team news, finance updates and planning controversies, alongside the celebrity goss and telly spoilers, weather warnings and popular culture. There is no way all of it will appeal to everyone, nor will all of it be easy to spot. (Handy hint - search for and bookmark the work of the named journalists you like reading and their publication, to help you more easily locate their content)

I think we still have a way to go to get the balance right in how we present the news we create locally so it both fulfils the needs of advertisers and puts the most compelling news front and centre on every platform. But I am proud to work for an organisation that, while imperfect, continues to persist in wanting to deliver local and regional news FREE every day, and reaches a huge audience while doing so. 

Public interest journalism and journalism focussed on exposing society’s ills is fairly meaningless if those you write for (and about) don’t know about it, and those in power can just ignore it. When I wrote exclusively about a young teacher facing fake claims of racism that led to threats against her, the story was read over 100,000 times, was picked up by our sister regionals and nationals, and triggered national conversation. The would-be MP who sent the fake claim viral and put her name into the public domain is under investigation as a result of my findings.

When I exposed a city councillor’s racist tweets, action swiftly followed. When I highlight shocking housing conditions being endured by an exploited family, something is then done that makes their lives better, or challenges the system they are having to navigate. When I wrote about the scandal of child poverty in the city, people in power reacted and, most vitally, the people, charities and organisations I wrote about knew they had a voice.

As I say, however, the platform is imperfect - and remaining free-to-read for all in a city with such high levels of deprivation, and where many pockets can’t stretch to buy enough food, let alone news subscriptions, comes with compromises. We need to do more to make those compromises less damaging, and I believe we will get there.

So where does this newsletter fit into that narrative? Well, as I’ve alluded to, advertising and the user experience of the current mainstream news website I work for can be a challenge, especially when you want to enjoy a longer, absorbing read.

My key mission when I launched Inside Birmingham was to have an online platform to deliver ad-free regular exclusive content for those who want alternative ways to absorb local stories that matter, and are able to pay a few quid a year to do so.

It is a one-woman operation, however, and recently a combination of family care and health issues have taken me away from my desk more than I’d planned, often at short notice; and the fast moving news agenda has also conspired to make me a far too infrequent poster. Starting next week, please look out for a change.

Once a week, Inside Birmingham subscribers will receive a ‘state of the city’ piece from me, focussed on the top emerging political and social affairs stories. You’ll find out what is going on behind the scenes at the city council and inside the NHS and combined authority, what our local MPs are up to, and why you should care.

This will be accompanied by ‘special edition’ exclusives. That might be a focus on a single story, like this one, or a Big Interview that you won’t get anywhere else. I’m also roping in a couple of friends to write their own exclusives - so look out for those!

I always knew this would be an endeavour that would evolve, and I’m so grateful you have stuck with it. If you enjoy what you get, please tell your friends. I intend to continue to provide some of this content free if the number of subscribers keeps rising as it is, but hope enough of you value it sufficiently to buy a subscription so we can prove there is scope for this, alongside the free, daily content millions of readers dive into every week.

In the meantime, drop me an email at jane.haynes@reachplc.com to let me know what you’re up to and what I ought to keep my eye on. Thanks so much.

The story behind the closure of a £23 million charity

Steps to Work, a £23 million charity helping jobseekers in Walsall and across the West Midlands, went into liquidation this week. It’s a sad end for a charity that has been operating for a quarter of a century, helping thousands of unemployed people gain skills, confidence and work.

Steps to Work closed down in September but its official notice of voluntary winding up was only posted this week on The Gazette. Liquidators Butcher Woods have been appointed to oversee affairs on behalf of creditors and directors.

But as it winds down, allegations of ‘mismanagement’ have been thrown in the direction of the charity, all vehemently denied. The charity says a campaign is under way to discredit their hard work and target the charity’s CEO, well known local businessman Paul Cadman. Police have been asked to investigate, the charity said.

Mr Cadman, 57, a born and bred Brummie and self made entrepreneur, has been a trustee, then chairman, and latterly CEO of Steps to Work charity and its recruitment and temp agency subsidiary Starting Point Recruitment (SPR) during a seven year association. Described on his LinkedIn profile as ‘the most connected person in the region’, Mr Cadman is also involved with multiple other organisations as owner, director and non executive director, and is also co-founder of the region’s Innovation Awards.

Mr Paul Cadman, CEO of Steps to Work

Last year Steps to Work had more than 150 employees. At its close this September it had 36 employees. The charity said staffing levels fluctuated with contracts, and that all those made redundant as a result of the liquidation ‘are now employed’.

Critical to its demise, says the charity, was the loss of a major contract between Walsall Council and Starting Point Recruitment. Legal action is under way against Walsall Council over the contract, with SPR alleging breach of contract. Its multi-million pound claim is currently being pursued through the High Court, where, it is understood, an interim injunction against the council was granted in September. The case is ongoing.

But in the meantime a group of people who claim to be whistleblowers have contacted regulators, the Charity Commission, alleging mismanagement and potential conflicts of interest in a written submission.

In response, the charity says every claim they are aware of is unsubstantiated and deny any wrongdoing, while stating they would be happy to answer any questions from the Charity Commission. In a statement, the charity said: "The senior leadership team and board have worked tirelessly to safeguard the group’s 25-plus years of service, to protect jobs, and to secure the future of the organisation. It is disappointing that some individuals are attempting to undermine these efforts.

“These unfounded allegations are part of an organised and targeted campaign of harassment aimed at damaging the reputation and discrediting individuals involved.”

The charity’s website has been closed down and its HQ phone number in Walsall disconnected following the closure of operations. Steps to Work accounts for 2022-23 show that prior to the loss of the Walsall Council contract, the charity was in deficit of £1 million.

Steps to Work - Who’s Who

Steps to Work charity was founded 25 years ago to assist unemployed people into work, providing advice, support, financial assistance, coaching and vocational training. In its early years it had an operating budget of less than a million pounds, but in 2003 it created Starting Point Recruitment as a subsidiary, with all profits from SPR going to the charity.

Its fortunes improved as a result, and that year it generated an operating income of nearly £5m, chiefly by becoming the principal delivery partner for Walsall and Wolverhampton for Labour's New Deal and, later, the coalition government's Welfare to Work scheme. In 2010 its income was close to £20m; by 2012 this had fallen significantly as austerity hit, but it picked up again.

The activities of the charity were overseen by a group of at least 10 trustees at a time in recent years up until 2023, when a flurry of departures occurred. Nine trustees left between May 2023 and October 2023.

This coincided with the restructure of the executive leadership team - former CEO Bhanu Dir left in February that year, and Mr Cadman, previously chair of trustees, became CEO in April 2023. A new tranche of trustees were appointed in early 2024, but in June there was another batch of departures, with seven directors leaving. These included five people who had been appointed months earlier.

In a podcast interview last January (2023), Mr Cadman spoke in glowing terms of the charity’s success. He explained how the limited commercial entities SPR and training arm Circle of Life Training put 100% of their profits into Steps to Work, and that a total of £800,000 had gone ‘back into communities’ in the previous year as a result. He wanted that to rise to £2m by this year, he told the British Business Podcast, which you can watch here.

The Charity Commission records Steps to Work as a charity with three trustees - Amy Deakin, 37, who is chair, Dr Richard Fallon, 51, and Lakhbir Singh, 40. All three are also listed on Companies House records as directors of the charity, along with Mr Cadman, who is listed as the person with ‘signficant control’ of its affairs, and Margaret Blizzard, listed as secretary.

Trustees are volunteers who lead charities and decide how they are run and give strategic oversight. They are guided by strict rules around potential conflicts of interest, particularly if they involve financial conflicts or loyalty conflicts, among other things.

Its most recent published accounts for the year up to March 2023 revealed that Steps to Work had income of £23.1 million, which included a Government contract of £14.4 million, understood to be the Walsall contract. Its expenditure totalled £24.1 million, leaving a £1 million shortfall. This was before the loss of the Walsall contract, which occurred in September 2023.

Its outgoings included £14.57 million categorised as 'raising funds' and £9.56m on 'charitable activities'. The year before it had income of £17.03m, and outgoings of £16.07m; in 2021-22 its income was £14.37m and its outgoings were £14.04m.

The charity’s subsidiary Starting Point Recruitment has four directors, Cadman, Fallon, Blizzard and Jamie Naish, 34. Mr Cadman has significant control because he has 'the right to appoint or remove directors'. Its most recent accounts for 2022-23 show assets of £2.5m (net assets of £133,399).

Mr Cadman became the CEO of the charity in April last year, following a recruitment process. In response to questions about the decision to make a charity chair its paid CEO, a spokesperson for Steps to Work and SPR Ltd said the imminent retirement of then CEO Bhanu Dir last February (2023) had triggered a recruitment process. It was managed by four trustees who were in place at the time.

"Paul (Cadman), who was the chair, did not participate due to potential conflicts of interest,” said the spokesperson, on the grounds he knew prospective candidates. It was only after other candidates withdrew or could not proceed in the recruitment process that Mr Cadman was approached by the board to consider taking on the role himself, on an interim basis.

Said the spokesperson: "Paul initially declined, but when it became clear that there were no other viable options, he accepted it was in the best interest of Steps to Work." He was approved as salaried interim CEO in April 2023, and stood down as chair of trustees.

Added the spokesperson: "Becoming CEO has come at a personal financial cost to Paul. He took a pay cut (from other jobs) to assume the role and, on several occasions, has even forfeited his salary to support the organisation’s financial situation. He has always worked well above his contracted hours to deliver for the charity.”

When the group's future is stabilised, and the litigation involving Walsall Council is complete, Mr Cadman plans to step down as interim CEO, they said. The spokesperson added that all potential conflicts of interest were correctly addressed.

Steps to Work and SPR - links to other organisations

Steps to Work and SPR have links to other city organisations. In a statement, a spokesperson for Steps to Work and Mr Cadman said he has always been "open and transparent about his connections, consistently declaring all potential conflicts of interest. In cases where clear conflicts were identified, he deferred decisions to others, and the board has consistently supported his approach."

David and Co, a consultancy business operated by Paul Lock and Joshua Moreton and founded in 2023, describes on its website how it has partnered with SPR Ltd. It provides marketing and business information support. A spokesperson for David & Co said: “We were appointed by the previous CEO (prior to Paul Cadman), in line with procurement policies of the organisation. We have gone above and beyond to support SPR, even providing services free of charge during their challenging transition.”

The Technology Supply Chain, a membership organisation whose partners are Paul Cadman, Paul Lock and Steps to Work trustees Dr Richard Fallon and Lakh Singh, is also a David & Co client. Among the initiatives overseen by the Technology Supply Chain is the city’s annual Innovation Awards, which the charity Steps to Work has previously sponsored. A spokesperson for Technology Supply Chain said: “All contracts have been negotiated impartially, with clear measures in place to prevent any conflict of interest. We are confident that we have gone above and beyond in delivering value to Steps to Work (STW).”

Amy Deakin, current chair of the Steps to Work board of trustees, was independently successful through a rigorous recruitment process in gaining a paid role earlier this year as chief of staff for David & Co, Walk Through Walls and The Technology Supply Chain, the charity has said. These appointments have been formally declared in line with the charity’s policies, says the charity.

Walk Through Walls is the trading name of One Thousands Trades Ltd, which is a political consultancy owned by former Northfield Conservative MP Gary Sambrook and his former chief of staff (and David and Co director) Joshua Moreton. Its directors include Mr Cadman, Mr Moreton, Mr Sambrook, Mr Lock and Steps to Work trustee Mr Fallon. The firm has been providing advice and support to Steps to Work but wholly on a pro bono basis, said the charity spokesperson.

A spokesperson for Walk Through Walls stated: “Our team has been providing pro bono support to SPR as part of our commitment to supporting local causes. We believe in giving back and strengthening organisations that serve the public.”

Mr Cadman is also sole director of SPR Search Ltd, and co-director of 145 Holdings Ltd, with Amy Deakin and Dr Fallon. Both firms were formed in late July and now form part of the group of companies that includes SPR and Steps to Work. 

The Charity Commission said in response to our inquiries about Steps to Work: “We are currently assessing concerns about Steps to Work in relation to its governance and financial management. This will inform any next steps.” It confirmed it had not at this stage opened a statutory inquiry.

A representative of the charity said: "Allegations of governance or financial mismanagement are completely unfounded and appear to be part of a campaign aimed at discrediting individuals involved in the legal case (against Walsall Council). The board and senior leadership team have declared any conflicts of interest and managed them accordingly."

The future of Starting Point Recruitment and its charitable endeavours

In a statement, a spokesperson said: "SPR is currently in the process of rebuilding its business and workforce. As part of this effort, specialist advice has been sought and a restructure is being undertaken, which unfortunately will see Steps to Work enter a voluntary insolvency process.

"The board and senior leadership team have consistently acted in the best interests of the charity, the company, and its employees. The group is still undergoing a restructure, which is not yet complete.

“This will lead to the creation of a new charitable organisation that will become a grant distributor, supporting projects in the West Midlands. The charity will be funded by profits from SPR once the company returns to a stable financial position.

"The Steps to Work board firmly believes that this situation could have been avoided if Walsall Council did not (allegedly) poach/solicit workers provided to it by SPR and cause them to transfer to (the company that took on the council contract for providing temporary staff).

"This decision...destabilised SPR and therefore Steps to Work financially. The leadership team and board remain committed to protecting jobs, continuing to deliver on other employment support service contracts, and maintaining SPR’s position as a leading recruitment company in the region."

Addressing the potential conflicts of interest, they said any such conflicts were declared correctly by Mr Cadman, other directors and trustees, and managed in accordance with guidelines and rules. "Any suggestion that the trustees are doing this for personal gain is wrong. Anyone who knows the individuals involved knows that they are all extremely charitable people who often give back to the community."

Walsall Council confirmed it is involved in a legal dispute with SPR, whose contract providing temporary staff and recruitment services for the council had ended in September 2023.

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