The veterans mental health charity Combat Stress is to undertake a second round of job losses this year as part of plans to save £1.6m a year.

The charity shed 12 jobs in January when it decided to focus solely on providing mental health services to ex-servicemen and women rather than general welfare support as well.

Now an estimated 13 per cent of the organisation’s 300-strong workforce will either lose their jobs or see their roles changed as part of a five-year strategy announced to staff yesterday. 

Sue Freeth, who became chief executive in January last year, said the existing business model was not sustainable and the new strategy would help the charity to break even.

According to documents filed with the Charity Commission, Combat Stress had a deficit of £3.6m in the financial year ending 31 March 2016, generating £13m and spending £16.6m. Four years earlier the charity had income of £15.8m and expenditure of £12.3m.

“These changes have got to get us back into the black and, more importantly, we have to make sure we have a model of delivery that meets the increase in demand for services,” Freeth told Third Sector.

The charity used £6m of reserves to fund its previous five-year plan. “We can’t do that again,” said Freeth.

Reserves stand at £5.2m, which represents five-and-a-half months’ budgeted unrestricted expenditure. The charity’s reserves policy is to have six months.

Services at the charity’s treatment centres in Ayr, Shropshire and Surrey will be integrated and streamlined as part of the bid to save money. Freeth said that in addition to the charity’s existing six-week programmes it would run some shorter schemes lasting one or two weeks. 

The proposals will be put to the organisation’s employee forum. A final decision is expected in the week commencing 20 November.

Freeth said the charity was “open to listening to alternative suggestions”, but added: “We are confident that what we are proposing makes sense and will get our organisation to where we want.

“These changes are in response to what veterans and commissioners in the NHS want to see and will help us develop a model we can sustain. At the moment our model of delivery is not sustainable. We need to be more flexible and agile.”

Combat Stress, which was founded in 1919 as the Ex-Servicemen’s Welfare Society, is due to unveil a £45,000 brand refresh today as part of its five-year plan.

Freeth described the old brand as “cold” and said the new look, created by the agency Texture, gave the charity a warmer, more authentic feel.

Referrals for the charity’s services have increased by 143 per cent over the past 10 years, partly due to recent military conflicts in Afghanistan and Iraq and also because veterans are more willing to seek help.

– This article was updated on 20 September 2017. It originally said that some six-week programmes might be condensed into one or two weeks.