Guidance issued to help organisations navigate local government financial difficulty
Melanie May | 23 October 2024 | News
NAVCA and Lloyds Bank Foundation for England and Wales have set out recommendations for community and volunteer organisations affected by local service cuts, and published a report urging central government to provide guidance for councils that are in financial difficulty or have issued a section 114 notice.
Since 2018, eight councils in England have issued 13 section 114 (s114) notices. Prior to this, two had only been issued, both nearly 25 years ago. An s114 is issued when a local authority cannot balance its books.
The report calls on the new government to issue updated guidance for councils in financial difficulty or working through a s114 notice and to provide greater oversight, advice, and support to councils pre-s114 to anticipate areas that could become vulnerable.
Advertisement
Jill Hopkinson, Policy Manager at NAVCA, said:
“Financial instability is affecting many councils, and this is having an immense impact on communities. When councils are taking hard decisions to balance their budgets and cutting funding for voluntary and community sector (VCS) organisations, it can produce cliff edges which are detrimental to people and communities. Good relationships and communication between councils, local VCS infrastructure support organisations (LIOs) and the VCS are vital. Voluntary organisations are key partners, and collaboration with the sector facilitated by LIOs, can be an opportunity to reshape ways of working.”
Guidance for voluntary organisations
Guidance for the voluntary sector working with councils in financial difficulty includes that organisations should:
- Evidence the VCSE’s role and its local contribution using data, demonstrating why it would be missed if funding were cut.
- Build relationships with council and with other sector partners using a collective voice, identifying how information can be shared across local VCSE networks to develop a collaborative approach to support the community.
- Reframe the external narrative to highlight the impact of cuts on beneficiaries and the wider community.
NAVCA and the Foundation urge local government to build relationships with voluntary sector organisations, involving them early in the challenges and engaging strategically in shaping new operating models.
Gary Beharrell at Lloyds Bank Foundation, said:
“Small frontline charities are already picking up the pieces of more than a decade of local government funding cuts by subsidising contracts that don’t cover the full cost of delivering services and absorbing increased demand due to reduced support elsewhere. The pressure on small charities is further exacerbated when a section 114 is issued. Some of this pressure on small charities, and the eventual impact on communities, can be alleviated if local authorities and the voluntary sector collaborate and develop a strategic approach. For this to be achievable Government must provide greater support for local authorities struggling financially, and ultimately, for a review of local government finance arrangements.”
A free webinar, How the voluntary sector can navigate local government financial difficulty, will take place on 20 November, at 11am.
About Melanie May
Melanie May is a journalist and copywriter specialising in writing both for and about the charity and marketing services sectors since 2001. She can be reached via thepurplepim.com.