London charities facing a massive reduction in grants from two key London Councils programmes have met in the capital to discuss their response.

Eighty representatives from organisations which have been funded by the London Borough Grant Scheme and the European Social Fund (ESF), a co-financed pan-London fund, have called on London Councils – which represents the 32 different boroughs in the capital – to do a full needs assessment on cuts to the two programmes so that future schemes match London’s needs.

The London Borough Grant Scheme was worth £24.2m in 2010/2011, reduced down to £15.5m in 2011/2012. London Councils now plan for the scheme to be cut to £9.9m in 2012/2013 and yet further to £8m a year from 2013 onwards. The cuts are less dramatic than they might have been, with councillors voting last May to revise the grants budget upwards.

The ESF, meanwhile, has been halved as a result of a reduction in contribution from the London boroughs to £1m from £2m, leaving the total value of the ESF at £2m for projects across the city.

The London Voluntary Service Council (LVSC) reported  Mayor of Lewisham, Steve Bullockm as being critical of the way London Councils collaborates with other grantmakers in the region.

"London Councils work with other London funders has been 'sporadic' and needs to improve," LVSC quoted Bullock as saying. "There are big differences between the different London local authorities on the future of the grants scheme."

Alison Blackwood, head of policy and knowledge at LVSC said: "LVSC is unhappy with the cut to the grant scheme and we wholly support the affected groups in asking for a full needs assessment from London Councils in order to target the limited resources left at the most disadvantaged Londoners."

London Councils says its total grants budget will be reduced to £12.5m in 2012/2013 compared to £20.8m in 2011/2012, but that the cuts are necessary. The organisation says the reduced amount will be enough to continue to fund the 105 projects it has commissioned until the end of their funding agreements in 2012/13. "It is also sufficient to fund approximately 80 per cent of this current portfolio of commissions after the end of their fixed term agreements and until the end of the 2012/13 financial year,” the organisation says.

A consultation into changes to the grant programme is presently underway and will conclude in March.