Local authorities have made disproportionate cuts to the voluntary sector because central government has ended specific funding streams that helped local charities, the umbrella body Navca has told the Chancellor, George Osborne.
Joe Irvin, chief executive of Navca, sent Osborne a report ahead of the Budget on 21 March about local charity cuts to support his call for new transition funding to support charities in deprived areas.
The report says that under the previous government, councils used specific central government grants such as the Area Based Grant, the Performance Reward Grant and the Working Neighbourhoods Fund "particularly for local voluntary and community sector support and development organisations". It says the coalition government ended all of these grants after the 2010 general election.
"Many local authorities, unable to replace their voluntary and community sector funding from mainstream budgets, simply passed on the funding losses to local voluntary and community organisations," it says.
A statement that accompanies the report says: "The government provided statutory guidance to local authorities telling them not to make disproportionate cuts to the voluntary sector. However, the report shows that axing these funding programmes has in effect caused a disproportionate cut in funding to the local voluntary sector."
A spokesman for Navca said the organisation was not absolving local authorities of responsibility for the cuts, saying some had worked hard to consult and protect local charities but others had "made bad decisions" about funding for the voluntary sector.
"Central government has caused disproportionate cuts but that is not to say local government doesn't have a role to play," he said. "Local government still has choices. But central government has to understand that it is responsible as well."
Navca’s report calls on Osborne to "inject some much-needed resources into organisations working in the most deprived communities".
It says this should be done through a second wave of transition funding, following the £107m Transition Fund that was announced as part of the government’s comprehensive spending review in October 2010. The measure would "begin to correct" the problem of local authority cuts to the voluntary sector, the report says.
It says the fund should be for voluntary organisations and should be distributed by the Big Lottery Fund because it "has a good track record of distributing funds to deprived communities in an effective and responsive manner."
The report lists local areas where charities have been hit hard by public sector spending cuts. In Liverpool, it says, local authority funding for the voluntary sector was cut by £18m in 2011/12, leaving a budget of £19m.
It says that charities in Newcastle were badly affected when a £9.3m Working Neighbourhood Fund ended in 2011 and when a £16.3m Supporting People grant was cut by 39 per cent.
In a statement, Irvin said: "We know that money is not plentiful, but £250m was found to reintroduce weekly bin collections. We know that with less than this amount we can make a huge difference to people in the most deprived areas of England."
The Communities and Local Government department issued a statement that said: "Every corner of the public sector has to help pay off the deficit including local government.
"The best councils are making savings by sharing back office staff, cracking down on senior pay and using some of their £10bn reserves. Local people have a right to expect their council to tick off this checklist before setting their sights on the frontline and voluntary sector.
"Statutory guidance, published last September, sets out how local councils should to protect voluntary and community groups."
Last month, Navca signed a joint letter to Osborne with the National Council for Voluntary Organisations, Acevo, Social Enterprise UK and 10 other national umbrella charities, which asked for a second wave of transition funding.