The Challenge issued High Court proceedings against NCS Trust last August claiming £26m for breach of contract and loss of earnings after its contract to deliver the government-backed programme for 16- and 17-year-olds in London, the South East and the West Midlands was not renewed.
The parties announced today (Thursday) that they had agreed “mutually acceptable terms” to settle all outstanding issues.
-
Decade of cuts: the policies that have dismantled youth work
-
Analysis: NCS Act shifts scheme up a gear
-
Analysis: Boosting participation in NCS
Under the settlement, NCS Trust will pay £2.8m in respect of costs incurred by The Challenge for unfilled places during 2019 which can be claimed under the contract.
In a statement, NCS Trust said it accepted no liability in respect of the other two parts of The Challenge’s legal claim.
It added that neither party would make any further comment on the matter.
The Challenge went into administration last November following the loss of the NCS contract, which was worth £60m a year. At the time, it was the largest provider of the NCS programme in England.
The charity, which had been locked in a disagreement with the NCS Trust over a shared IT system, said it had witnessed the programme being "profoundly mismanaged" by the trust.
The £2.8m payment was authorised by the Department for Digital, Culture, Media and Sport (DCMS) and HM Treasury and was negotiated with the joint administrator on behalf of the creditors of The Challenge.
The collapsed youth charity faces claims of £8m from local providers.
Last month, the DCMS announced it had launched an inquiry into the way the NCS is run after blocking a proposed "exit package" for former chief executive Michael Lynas.
