The release of crucial government funding needed by many health charities in the sector is being delayed by the Department of Health due to NHS budget deficits.

The delay may mean that hundreds of charities will not be able to deliver vital services and some charities may have to close.

A number of sector workers have reportedly already been made redundant as some charities have had to wait since January for decisions on their applications for funding.

Dr Jean Collins, chief executive at Values into Action, a charity supporting and campaigning on behalf of people with learning difficulties says that the situation is devastating and frightening.

"The board of trustees has a legal obligation to plan and set a budget for the financial year but they just can't. We put our completed application in last August and although we were promised we would hear back in January, we have heard nothing and we are now in the new financial year with no idea if we are going to have some, all or none of the funding we have applied for. Staff redundancies could be as close as two months away if it carries on."

Charity Finance has also learnt that in mid-April, charities receiving Section 64 funds were sent an email informing them that the scheme was under review and until it is completed, there would be no guarantee that outstanding commitments would be paid.

In the case of Values into Action, this means that a two-year project that is halfway through would be wasted as the funding for the second part of it may not come through. Section 64 of the Health Services and Public Health Act 1968 is a funding method which means that the Secretary for State has power to make grants to voluntary organisations whose activities support the Department of Health's policy priorities.

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NHS deficits cause Section 64 grants crisis

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