Citizens Advice is facing an 11.6 per cent cut to an expected £20.8m grant from the Department for Business, Innovation and Skills (BIS).
Although discussions are ongoing and the final amount has yet to be decided, BIS has asked the charity to find the savings from its 2010/11 budget.
Citizens Advice receives a yearly grant from BIS of around £20m, and although the grant for 2010 is yet to be confirmed by BIS, the charity had projected the amount to be £20.8m.
The 11.6 per cent loss would mean a drop in funding of £2.4m.
Labour MP Ann Coffey tabled an Early Day Motion last week expressing concern about this and other potential cuts in funding to the voluntary sector.
The motion has so far attracted twenty signatures.
Disappointment at lack of notice
Shani Fancett, acting CEO and director of membership services at Citizens Advice, said the charity was disappointed with the govenment's actions:
“We appreciate the Government is seeking to make very rapid reductions in government expenditure, and there are many organisations which rely on government funding who are also being asked to make similar savings.
“We are however extremely disappointed that as an independent charity at the heart of a significant frontline voluntary network that has helped over two million people in the last year and handled a 23 per cent increase in the number of enquiries, we seem to have been regarded as a quango and this decision has been taken with so little notice and no consultation.”
She added: “We have taken some immediate steps to cut discretionary expenditure across the organisation in areas like printing, meeting costs, consultancy and travel – including cancelling an annual conference for our staff in July.
“Our trustee board meets this week to discuss the savings we have identified so far and decide how we can achieve the savings while ensuring that frontline services to the public are protected as best they can be."
According to Citizens Advice’s latest accounts on the Charity Commission website, it received a £21.5m grant from BIS in 2008 and 2009.
It also received £17.9m as part of a financial inclusion fund and £3,000 for conference sponsorship from BIS in 2009.
