Somerset hospice loses £1m over failed funeral venture

Finance Director of St Margaret's Hospice David Slack has defended the decision to set up funeral businesses

A hospice in Somerset has lost a million pounds over a failed funeral plan venture, the BBC has learned.

St Margaret's Hospice was the first in the country to offer funeral plans despite warnings from a local campaigner over the move.

Its finance director has defended the decision to set up the venture.

David Slack said: "The trustees undertook a comprehensive piece of business planning...Unfortunately it didn't work out like that."

He added: "Not only had we hoped to raise money for the hospice but also it was hugely valued by the families that we provided the service to."

St Margaret's Hospice has been running for 40 years and helps people with life-limiting illnesses.

Mike Perrin, fundraiser for St Margaret's hospice, said he had warned the charity over the funeral service

But Mike Perrin from Burnham, who has raised £100,000 as a volunteer fundraiser for the hospice, said he had previously warned the charity against the move.

The former chair of Sedgemoor Enterprise Agency said: "That's what upsets me. No one has justified or come back on my concerns. Business has been taken on a venture... but I put forward quite reasonable, sensible figures backed up by looking at statistics to show the market just wasn't there to go for it."

The charity has now told the BBC that after five years, and after carrying out more than 300 funerals under this scheme, it simply was not making enough money and had to be wound down in July, at a total loss of £1m.

The final bill

This bill includes the winding down costs of funeral shop Taunton and Bridgwater.

There was £100,000 in set up costs when it bought into a franchise in 2017 with a national funeral company called Memoria - whose chief executive once wrote a book called How to Become Dead Rich.

Hospice Funerals LLP, the company owned by St Margaret's, which ran the services lost £320,862 in the year ending 2018.

Company accounts show more than £36,000 was spent on travel and accommodation and more than £41,000 on conferences.

Mr Perrins said he wrote repeatedly to the hospice asking for the total figure for losses.

But he was upset when he received a letter from the charity which said "it would not be appropriate to discuss detailed commercial and operational matters with individuals from outside our organisation".

The charity added: "All correspondence concerning St Margaret's Funerals was dealt with at the time, and Mr Perrin was invited to a meeting to discuss his concerns in 2018."

'Covid struck'

The venture had another setback was when the Competitions and Markets Authority looked into the set up and found that it was important for the charity to offer choice, and it should not automatically refer patients to the funeral plan.

When asked if anybody considered a conflict of interest before, Mr Slack said: "No, it wasn't foreseen in that way and that happened four years after the business case was developed."

Mr Slack does not believe the loss should result in the resignation of anybody from the charity.

He said "Certainly in a couple of years we were close to breaking even and looked like we might move into a surplus, but then circumstances moved against us."

He added: "Towards the end of the second year Covid struck and, like many of the businesses we were affected by that."

Despite everything Mike Perrin says he is still prepared to raise money for St Margaret's as he still believes in its good work.