Government guidance on cuts to voluntary sector funding

On 2 September 2011, Communities Secretary Eric Pickles published guidance to local authorities on how to protect voluntary and community groups from disproportionate cuts to their funding.

The guidance confirms the need to consult voluntary and community organisations. It also states that – in the interests of economy and efficiency – authorities are not obliged to undertake diversity questionnaires.

The guidance states:

‘Authorities should seek to avoid passing on disproportionate reductions – by not passing on larger reductions to the voluntary and community sector and small businesses as a whole, than they take on themselves – and in particular:

  • An authority intending to reduce or end funding (where ‘funding’ means both grant funding and any fixed term contract) or other support to a voluntary and community organisation or small business should give at least three months’ notice of the actual reduction to both the organisation involved and the public/service users.
  • An authority should actively engage the organisation and service users as early as possible before making a decision on: the future of the service; any knock-on effect on assets used to provide this service; and the wider impact on the local community.
  • Authorities should make provision for the organisation, service users, and wider community to put forward options on how to reshape the service or project. Local authorities should assist this by making available all appropriate information, in line with the government’s transparency agenda.’

The guidance also states:

‘To achieve the right balance – and before deciding how to fulfil their Best Value Duty – authorities are under a Duty to Consult representatives of a wide range of local persons; this is not optional. Authorities must consult representatives of council tax payers, those who use or are likely to use services provided by the authority, and those appearing to the authority to have an interest in any area within which the authority carries out functions. Authorities should include local voluntary and community organisations and small businesses in such consultation. This should apply at all stages of the commissioning cycle, including when considering the decommissioning of services. In the interests of economy and efficiency, it is not necessary for authorities to undertake lifestyle or diversity questionnaires of suppliers or residents.’

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