Liverpool City Council will cut its main voluntary sector grants budget by 17.5 per cent in the financial year 2012/13, a council statement said last week.
The council’s community resources unit budget will fall from £3.2m to £2.6m, a meeting of the council cabinet decided. All charities currently receiving grants from the budget will have their funding reduced by the same percentage. The budget was £3.8m in 2010/11.
Other council funding for charities has also been reduced. The council arts budget will be cut by 10 per cent and its youth services budget will be reduced, although the amount has not yet been agreed.
A Liverpool Council spokesman said the local authority had to make overall cuts of £50m this year. "We consulted with voluntary organisations early this year and more than 70 per cent of them said they accepted the council's position," he said. "It should be noted that the community resources programme is only one aspect of funding for the voluntary sector and we support many organisations through other funding streams."
Alan Lewis, chief executive of Liverpool Charity and Voluntary Services, said that the current year had already seen heavy cuts, which had caused some organisations to close.
He said charities had been expecting the 17.5 per cent cut because it had been made clear last year that it would come, but it would still be difficult for many charities to cope.
"At this point we cannot tell if people will scale back or if they will no longer be viable," he said. "There are always fixed costs like rent, which might cause some charities to close. It’s going to be a confusing picture and at this point we don’t know who will be left standing."