Hull City Council and the Legal Services Commission have almost completed joint plans to commission the new centre. The CAB has been told it has been unsuccessful in its bid to land the contract, which is expected to go instead to private company A4e.
If the plan goes ahead, the Liberal Democrat-led council will stop providing annual funding of £640,000 to the CAB. The charity said that up to 40 of its 55 jobs would be at risk if it were to lose the council funding. Staff, union members and supporters will march to the council offices tomorrow ahead of a crucial council meeting to discuss the situation.
"The charity is looking vulnerable," said Lesley Thornley, bureau manager at Hull CAB. "Forty jobs could go if the worst happens, although we are assured that a significant number of staff would be eligible for transfer to the new organisation under transfer of undertakings rules."
The bureau receives funding from other sources, including the local primary care trust and the national Citizens Advice charity, but this is only enough to fund about 11 posts.
Members of trade union Unite, which represents the charity's staff, have been lobbying opposition councillors - 31 of the 59 council members - to oppose the new centre. Rosemary Pantelakis, Unite's representative at Hull CAB, said many were unaware of the impact the new funding arrangements would have on the CAB.
She said the launch of the new advice centre had already been delayed because the council had failed to carry out a proper consultation on the matter.
A spokeswoman for Hull City Council denied that this was the case, but was unable to say why the centre, which was due to begin operating in May, was now not expected to open its doors until at least July.
She said the final decision on the contract would be made at the authority's contracts committee in May.
"Since 2006, we have undertaken research and continually consulted the people most likely to use the service, as well as other local agencies," she said.
"The CAB has been kept informed at every stage of the process. Once the tender is awarded, there will be further consultation on how the community legal advice centre can best deliver its service to meet local needs."