NAVCA and Lloyds Bank Foundation for England and Wales have made recommendations for community and voluntary organizations affected by local service cuts and published a report urging central government to provide guidance to councils who are in financial difficulty or who have issued a notice under section 114.

Since 2018, eight councils in England have issued 13 section 114 (s114) notices. Before that, only two had been issued, both almost 25 years ago. An s114 is issued when a local authority cannot balance its books.

The report calls on the new government to publish updated guidance for councils in financial difficulty or working on a Section 114 notice and to provide increased oversight, advice and support to councils ahead of Section 114 in order to anticipate areas that could become vulnerable.

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Jill Hopkinson, head of policy at NAVCA, said:

“Financial instability is affecting many councils, which is having a huge impact on communities. When councils make difficult decisions to balance their budgets and cut funding to voluntary sector (VCS) organizations, it can produce cliffs that are detrimental to people and communities. Good relationships and communications between councils, VCS Local Infrastructure Support Organizations (LIOs) and the VCS are essential. Voluntary organizations are key partners, and collaboration with sector facilitated by ILOs can be an opportunity to reshape ways of working.

Tips for voluntary organizations

Guidelines for the voluntary sector working with councils in financial difficulty include that organizations should:

• Evidence of the role of the VCSE and its local contribution using data, demonstrating why it would be missed if funding was reduced.
• Build relationships with the council and other sector partners using a collective voice, identifying how information can be shared across local VCSE networks to develop a collaborative approach to supporting the community.
• Reframe the external narrative to highlight the impact of reductions on beneficiaries and the broader community.

NAVCA and the Foundation urge local governments to build relationships with voluntary sector organizations, involving them early in challenges and engaging strategically in developing new operating models.

Gary Beharrell, of Lloyds Bank Foundation, said:

“Small frontline charities are already picking up the pieces of more than a decade of cuts to local government funding by subsidizing contracts that do not cover the full cost of providing services and absorbing increased demand due to reduced support elsewhere. The pressure on small charities is further exacerbated when a section 114 is published. Some of this pressure on small charities, and its possible impact on communities, can be alleviated if local authorities and the voluntary sector work together and develop a strategic approach. For this to be achievable, the government must provide greater support to local authorities in financial difficulty and, ultimately, review the financing arrangements for local authorities.

A free webinar, How can the voluntary sector overcome the financial difficulties of local authorities, will take place on November 20, at 11 a.m.

About Mélanie May
Melanie May is a journalist and editor specializing in writing for and about the charity and marketing services sectors since 2001. She can be contacted via thepurplepim.com.