Funding for voluntary and community organisations in north-east England is to fall by £50m per annum after 2006, and most small and medium-sized organisations in the region are either unaware of the situation or have failed to plan for the shortfall, a report suggests.
Facing the Future, published this week by the University of Teesside's Social Futures Institute, identifies grants from the EU and 'single-pot' funding allocated by the regional development agency, One NorthEast, as sources of funds under threat.
It predicts the shortfall will occur because One NorthEast has reduced the proportion of single-pot funding for sub-regional authorities to allocate directly to sector organisations. At the same time, funds from the EU's European Regional Development Fund and European Social Fund are to be redirected towards eastern Europe.
"Most vulnerable are the mid-sized organisations in the region that offer secondary services," said Dr Tony Chapman, director of the institute.
"That is because their governors are not business-minded and often lack the expertise to look at new sources of income."
The research has found that only 22 per cent of voluntary organisations in the region have taken on local authority contract work or have strategies in place to do so.