Newcastle City Council will donate the wage savings it will make from Wednesday’s strike action to its Newcastle Fund grants programme to support employment charities in the city.

The action has been supported by local voluntary sector leader Jo Curry, chief executive of the Voluntary Organisations Network North East (Vonne), who has called for other councils to follow suit.

Speaking with Newcastle’s Sunday Sun, Curry said: “The speed and scale of public sector cuts are having a devastating impact on the lives of vulnerable people in communities and it is clear that the trade union movement is taking a stand on behalf of those affected.

“We encourage other public service employers in other areas across the region to follow Newcastle’s lead,” she said.

It is estimated that the Council could save £300,000 in salary payments from Wednesday’s strike action for the protection of public sector pensions, depending on the level of strike support. The entirety of this will go to the Newcastle Fund. Leader of the Council, Councillor Nick Forbes, said: “Losing a day’s pay due to industrial action will have a big impact on many of our workers. It’s important they see that their lost earning will be put to a positive use through the Newcastle Fund, ultimately supporting the voluntary sector that help those with the most need in the city.”

Research conducted by Vonne with the Newcastle Council for Voluntary Service has shown that in the six months to August 2011, 40 per cent of voluntary and community organisations in the city had lost staff, 73 per cent had seen a reduction in funding and 64 per cent were eating into their reserves. Some 81 per cent of organisations surveyed advised that some or all of their funding was sourced from public sector grants.

The Newcastle Fund was launched by Newcastle City Council in 2010 with a specific focus on supporting projects helping people resolve barriers to employment. Since then it has received 199 applications totalling £15m.Grants totalling £5.9m were awarded to voluntary and community sector organisations in its first round and the second round of awardees, which will share £4.3m of funding, are due to be announced shortly.

The strike savings will be donated to the Fund in the new year, with the Council deciding not to deduct the strike pay from employees in their Christmas pay packets.