Monday, 27 February 2012

Advice Fund only covers half of charities in need

LAG has learnt that applications to the Advice Services Fund, which was established by the Cabinet Office to offset the impact of the cuts on advice centres in the current year, have outweighed the cash available by more than double.

A total of £16.8m was allocated for England but, according to letters sent to unsuccessful bidders which have been seen by LAG, 622 applications were received worth £35m. In a letter to those rejected, the Big Fund - which is administering the cash on behalf of the government - made it clear that charities which needed money would have to do without: 'Given the competitive nature of this programme and with a budget of £16.8million, we were unable to offer grants to all of the worthwhile applications we have received.'

The balance of the £20m fund was divided between Scotland, Wales and Northern Ireland. Applicants had to demonstrate they would receive a cut of ten per cent or more in the current financial year and applied for grants worth between £40,000-70,000. Advice agencies which had been awarded money from the Transition Fund last year were told they would not get priority for Advice Services Fund cash.

Many not for profit (NFP) advice services are being hit with cuts from local government and other funders. Any help is welcome, but the Advice Services Fund is clearly inadequate, as over £80m is due to be cut from legal aid for housing, employment, debt, benefits and other areas of civil law, usually referred to as social welfare law (SWL), from April 2013. Around 300 advice centres, such as Citizens Advice Bureaux and Law Centres, rely on legal aid income to provide specialist legal advice services in SWL. LAG is calling for the Legal Aid, Sentencing and Punishment of Offenders Bill, which is due to reach the report stage in the House of Lords next week, to be amended to bring back into scope employment, benefits, housing and other areas of civil law that the government plans to cut.

The Transition Fund distributed £105m in grants to charities and other NFP organisations between March and May 2011. Its aim was to assist them to 'adjust to the new spending environment'. The fund was open to all charitable and NFP organisations. LAG has spoken to a number of advice organisations which have lost out on Advice Services Fund grants because they had previously received Transition Fund money. They have been placed on a reserve list for a grant from the fund, but they point out that unlike the Advice Services Fund, the Transition Fund was not intended to replace cash lost from legal aid or other funding intended for providing services to the public.

A review of advice services is also being undertaken by the Cabinet Office. Advice centres across the UK are facing a crisis of shrinking grants and contracts at a time when the demand for their services is rising. The review, which was announced by Nick Hurd, Minister for Civil Society, in November last year, shows that the government at least recognises this. However, it will have to be backed up with a long term financial commitment to the advice sector if it is to have any credibility. The one-off £20m Advice Services Fund in the current financial year does not achieve this and risks appearing to be little more than a bribe to buy off opposition to the legal aid cuts and to secure a government majority for the Legal Aid Bill.

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