At a Croydon cabinet meeting last week, council leaders at the Conservative-led authority accepted a recommendation for a reduction of 66 per cent in its Stronger Communities grants fund, which will fall from £1.8m a year to £625,000 a year over the next four years.
But the cabinet also recommended the creation of a £350,000 fund to help voluntary sector organisations deal with the cuts. Both proposals will go to the full council for final approval tonight.
A council spokeswoman said the transition fund should address concerns that only six organisations are set to receive grants under the proposed new funding arrangements, despite receiving 167 applications from 126 groups.
She said the fund would "assist those organisations most affected by the reductions in grant funding, including those organisations that need help in accessing new commissioning opportunities that the council intends to bring forward in the future".
More specific details, such as how the money will be administered, are set to be confirmed by the end of August.
More than 120 people were at meeting to protest, but with space inside limited, many were left on the town hall steps.
Steve Phaure, chief executive of Croydon Voluntary Action, said the offer was a "disproportionate" solution, and said he had written to the leader of Croydon Council, Mike Fisher, demanding a review of how the changes would hit the area’s most vulnerable people.
"We are convinced it doesn’t go far enough," Phaure said. "The council needs to take a more discerning approach to managing its budget deficit.
"It is underestimating the impact the cuts will have, directly on service users, and indirectly in the council’s own services which will be put under more pressure."