A £40m government fund for the charity advice sector will not prevent cash-strapped services from closing, a campaign group has warned.
Justice for All, a campaign coalition that includes Citizens Advice and the Law Centres Federation, said the allocation to the Advice Services Fund announced in today’s Budget was not big enough to help the sector cope with funding cuts of what it said would be at least £100m a year by 2013/14.
The fund for advice services will be worth £20m in 2013/14 and the same sum in 2014/5.
Will Horwitz, campaign manager at Justice for All, said: "£20m a year for just two years is not nearly enough to cover the £100m annual shortfall charity advice providers are facing. And it is not a long-term plan for the advice sector. It is no substitute for legal aid, so we urge government to accept the amendment won in the House of Lords this month to keep legal aid for advice on welfare benefit appeals and reviews."
Earlier today, Justice for All estimated that the sector would lose £51m a year through legal aid cuts starting in April 2013 and another £51.3m a year from 2012/13 because of reductions in funding from councils and other sources.
Horwitz said the previous £20m tranche of the Advice Services Fund, which covered 2012/13, was hugely oversubscribed. He said the £16.8m portion of that fund that went to services in England received 620 applications worth more than £35m.
He said he expected the funds for 2013/14 and 2014/15 would be even more oversubscribed. "I think the problem will be worse in 2013 because that is when £50m of legal aid cuts come."
Other third sector bodies were more sanguine about the fund.
Joe Irvin, chief executive of the local infrastructure body Navca, said: "The Budget included a promise of £40m to be made available for the not-for-profit advice sector over two years as well as measures to simplify Gift Aid. These are welcome at a really difficult time for our sector.
"However, this Budget should have gone further. Charities supporting the most deprived communities are facing the double whammy of cuts in funding and rocketing demand. This Budget is a squandered opportunity to help Britain's hardest hit communities. This government needs to understand that the big society works only if the local society works as well."
Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, said: "The advice services fund is a step in the right direction for supporting these vital organisations, which were hit particularly hard by falling income and escalating demand during the recession.
"Given that that advice sector stand to lose about £100m in the next year as a result of spending cuts and changes brought in by the legal aid bill, we hope that the government will do all that it can to support these vital organisations."
See our round-up of stories on the 2012 Budget