Derby City Council is being challenged over plans to cut all non-statutory funding to community and voluntary sector groups in a bid to save almost £750,000.
The Labour-run council has proposed removing all funding for voluntary sector groups that provide non-statutory services in the city – worth £747,595 a year – to help balance its budget. This includes ending a contract worth £200,000 with the Citizens Advice Derby and Law Centre, which is almost a quarter of its income.
Of the £747,595 to be cut, £622,600 will be removed during the 2016/17 financial year, according to a report from the cabinet member for integrated health and care, presented at a council cabinet meeting on 10 February. The remainder will come out of the 2017/18 budget, council documents show.
The authority said it was forced into making the reductions because of "savage cuts" to the funds it receives from central government.
But three Conservative and three Liberal Democrat councillors in the city have "called in" the council’s proposal.
A decision can be called in when councillors believe the council’s decision-making principles have been broken. The move forces the council to review the original proposal – it will be discussed on 1 March.
If the move is accepted at that meeting, the decision will be referred back to the cabinet.
The call-in document says that any savings gained will be outweighed by the loss of services and subsequent increase in demand and costs for other council-run initiatives.
Matthew Holmes, leader of Derby Conservatives, said: "We feel it’s a short-sighted move by the Labour administration and the consequences of the proposed cuts just haven’t been properly thought through. We also feel that there has not been proper consideration prior to the decision in several areas.
"It’s important that we pause this decision and allow us to have a debate on this and hopefully persuade the council to think again."
Ruth Skelton, a Liberal Democrat councillor who was one of the six who called in the council’s proposal, told Third Sector the consultation process was a "paper exercise" and the cuts would prove counter-productive.
"Derby needs the voluntary sector more than ever now, but the council is cutting off that arm," she said.
Sue Holmes, chief executive of Citizens Advice Derby and Law Centre, said: "We have worked hard to diversify our funding, but the council’s investment still makes up nearly a quarter of our funding. We are still in discussions with the council, but if the proposals do go ahead we will need to review the services we offer to people in Derby."
Martin Repton, the cabinet member for integrated health and care responsible for the voluntary sector grant funding cut, told Third Sector: "This is a position we never wanted to be in and were forced into by savage government cuts and the butchery by the government of our budgets.
"To protect statutory services we have had to look at areas we would never normally have looked at."
Cabinet minutes say that a consultation was held between 7 September and 13 November last year in which 95 per cent of respondents said they opposed ceasing or reducing funding for voluntary services.
Voluntary sector funding was also cut by the council in 2012/13 from £1.1m to the current level.