A London-based community funder has warned that the government’s proposed changes to how it allocates funding for local councils risk “weakening the impact of an over-stretched voluntary sector working with disadvantaged communities”.
It was reported last week by the Institute for Fiscal Studies (IFS) that inner London boroughs such as Camden could lose up to 12% of their central government funding under its plans to rebalance allocations nationally – with a larger share redirected to outer London and other parts of England.
The IFS report described the reforms as creating “big winners and losers over the next three years”, with some councils facing significant cuts while others will see substantial gains.
It added that inner London councils were “by far the biggest losers from the reforms”.
In response, Camden Giving, which funds participatory grantmaking programmes for residents and organisations from across the London borough, described the increased pressure that the changes would place on funders as “deeply worrying”.
The news comes after research published earlier this year by the Directory for Social Change found that financially at-risk councils had already started reducing the grants they made to charities.
Funding cuts would ‘invariably deepen’ resources crisis among charities
Natasha Friend, director of Camden Giving, said: "Charities are already being relied upon to support community and social wellbeing projects across the borough.
“However, the ever-increasing demand for grant-giving organisations to support essential services and infrastructure, is hindered by the ongoing cost-of-living crisis – which is driving down public donations as the household purse tightens.
“The third sector is under immense and existential pressure, and more cuts to London boroughs' funding will invariably deepen the crisis; and cut our resources even thinner.”
A spokesperson for the Ministry of Housing, Communities and Local Government told Civil Society: “We are reforming an outdated system which has left communities behind, ensuring we can fund councils fairly and improve public services.
“Our modern Industrial Strategy has introduced ambitious plans to drive growth and investment in London, and our Plan for Change will ensure our country continues to be the best place to invest and do business.”
