Liverpool City Council has generated £19m in funding for its voluntary and community organisations (VCOs) and provided a £1m hardship transition fund in its 2011/12 budget proposal despite having to make over £91m of cuts over that period.
After receiving the maximum level of grants cuts, Liverpool Council is forced to find savings of 22 per cent of its £400m 2011/12 budget, equating to £91.4m, and an additional £50m in 2012/13.
All grants funding was cut to Liverpool's VCOs, but the council has re-allocated £19m from its mainstream funding to fund the voluntary and community sector and provided an additional £1m hardship transition fund for struggling organisations, labelling the funding of the sector a "priority". The allocation means that Liverpool's VCOs will face an overall cut of £18m rather than £37m.
A spokesman for the council advised that much of the loss will be felt in arts organisations but that budget decisions were made to "protect the life and death services".
City Council leader, Councillor Joe Anderson said: "There is no disguising the fact that these are the most severe cuts we have had to make in generations. While we have tried to protect frontline services, especially those to vulnerable people, the sheer scale of the cuts mean that it has not always been possible to do that."
The council found the grants cuts so severe that it dropped out of the government's Big Society programme at the start of the month after being chosen as one of the four 'vanguard' areas to pilot the initiative.
After losing £110m in statutory grants including £32m for the working neighbourhood fund, £11m for the supporting people fund and £8m in grants for adult social care, Anderson asked: "How can the City Council support the Big Society and its aim to help communities do more for themselves when we will have to cut the lifeline to hundreds of these vital and worthwhile groups?"
The proposed budget will be submitted to the Cabinet on 25 February. Community participation via the YouChoose website, allowing residents to have their say on what services should be cut, closed yesterday and results will be submitted for consideration before the budget is set by council leaders on 2 March.
