A group of 40 civil society organisations are hoping to raise £40,000 from local businesses and individuals to provide an emergency aid grant fund for people in Birmingham.

The news comes as new research by the Children's Society finds grants and loans to help vulnerable families in financial crisis have been cut by around £151m in real terms over the last three years.

The Community Support Network will provide grants of up to £50 for people to spend on essential items such as nappies or energy bills. The new fund will be managed by the Birmingham Voluntary Service Council, which will pay out grants when one of its member organisations identifies someone in need of assistance.

A spokeswoman told civilsociety.co.uk that the charities had not set a target deadline for when they wanted to raise the money by, and that the organisations hoped that once it is created the £40,000 will be continually topped up. 

Mohammed Al-Rahim, came up with the concept in response to increasing demand from beneficiaries, and is chair of the network, he is also vice-chair of the BVSC and chief executive Birmingham charity Freshwinds. He said: “More than ever we are seeing people coming to us living in abject poverty, without the means to feed themselves or have access to electricity throughout the month.”

“We have seen an upsurge in requests for help since the start of the economic downturn. This increased after the introduction of the bedroom tax, and when the cap on benefits comes in, in August, we expect demand to soar.”

Brian Carr, chief executive at BVSC, added: “Charities and community groups are themselves under huge pressure due to funding cuts and many are facing the closure of essential services - but Birmingham has a rich history of local voluntary action, particularly during times of great need, and it's encouraging to see this continuing.”