There will be a strong case for the Government's Targeted Support Fund and Hardship Fund to be extended for another year if unemployment is still rising when they come to an end in April, according to Kevin Curley, chief executive of Navca.
Curley was speaking to Third Sector ahead of the publication of the local infrastructure body's Crunch Time report, which pulls together information gathered by local infrastructure organisations from about 900 frontline organisations in 20 areas of England and is published this week.
The report found that the effects of the recession varied across the country but demand for services such as housing support and financial and employment advice had risen by 50 per cent in some deprived areas.
It also found that many organisations, particularly those with annual incomes of between £10,000 and £150,000, were struggling to meet rising demand for volunteer placements while income fell from donations, sponsorship, trading and foundations.
The research highlighted fears that organisations that rely on public funding might not be hit by the recession until 2010 or 2011.
Curley said this might mean the Government's £15m Targeted Support Fund, which supports small charities in 50 deprived areas of England facing increasing demand, and the £16.7m Hardship Fund, which offers grants for struggling small charities working with disadvantaged people, would need to be extended.
"We will need to read the tea leaves in April," he said. "If unemployment continues to rise, the rationale for the funds will continue." But he warned organisations not to "fall into the trap" of just asking the Government to compensate them for lost income.
"We should be making the case for support for the work we do to protect and strengthen communities," he said. "We know full well that investing in preventative services can reduce the long-term cost of public services."
The report also found an increased willingness by some organisations to collaborate. Curley reiterated his view that the Government's Modernisation Fund, which offers supports for collaboration and mergers, had been rolled out too quickly and needed to be extended.
"The length of time it takes for trustees to get used to the idea of doing themselves out of a job means mergers aren't something that can be achieved quickly," he said.