At a meeting in December, London Councils decided to reduce its contribution to the European Social Fund grants programme for London from £2m in 2011/12 to £1m in 2012/13. The London boroughs’ contribution is matched by ESF money, meaning the overall pot will be reduced from £4m to £2m in the next financial year.
London Councils’ ESF grants are currently funding 30 voluntary organisations until 31 March. The programme funds voluntary organisations to support people who are unemployed for long periods.
The reduced funding pot will be going out to tender in due course.
"The budget cut comes at a time when the need for such back-to-work programmes has never been greater," a statement from LVSC said.
London Councils last year announced proposals to reduce its voluntary sector grants programme to £8m a year from 2013 onwards. This is a decline of nearly 70 per cent compared with the budget of £26m in 2010/11.
At a meeting yesterday, more than 80 organisations commissioned through the scheme discussed how London Councils could work with the voluntary sector and how the reduced grants scheme could meet needs in London.
Alison Blackwood, head of policy and knowledge at LVSC, said: "LVSC is unhappy with the cut to the grant scheme and we wholly support the affected groups in asking for a full needs assessment from London Councils in order to target the limited resources left at the most disadvantaged Londoners."
A spokeswoman for London Councils said: "A 12-week consultation on the future priorities of the grants budget for 2013/14 was launched in December. This will run until 23 March. We would encourage everyone to have their say by responding to the consultation before it closes."