Chesterfield council in ‘sad situation’ as it considers ceasing funding for advice agencies

Labour-led Chesterfield Borough Council’s Scrutiny Select Committee on Economic Growth and Communities met on January 18 to discuss the proposed withdrawal of funding as a saving proposal as part of efforts to balance its forecast £4m budget deficit for the 2024-25 financial year.

The council currently pays out a total of £217,755 a year in discretionary funding grants for the Citizens Advice Bureau, the Derbyshire Law Centre, Derbyshire Unemployed Workers Centre, and Links CVS and it has done so for many years without any statutory obligation.

Scrutiny committee chairperson, Cllr Jenny Flood, said: “What is important is that we have supported them for a very long time and a lot of our constituents have benefited immensely from that support.

“We recognise it is difficult for both the council and these agencies but they have become more robust in getting additional funding from elsewhere as we have seen in the work they have been doing.

“And from that point of view they can see the problems we have got and they understand that.”

Cllr Jonathan Davies, Cabinet Member for Health and Wellbeing, pointed out that the council is facing an estimated £4m budget shortfall which it needs to meet with tough decisions to avoid issuing a Section 114 notice and falling into ‘bankruptcy’.

The council has cited that its financial plight, like so many other local authorities, has been down to many factors including reduced Government funding, the cost of living crisis, the impact of Covid-19, growing demand upon its services and inflation.

Cllr Davies explained that if the worst case scenario was to happen under a Section 114 notice the council would lose a lot of control and there would be no new spending allowed on behalf of the council and no new contracts.

He said: “If we get a Section 114 there would be an immediate cut-off and we do not want that to happen and we do not want to lose control of the council.”

Cllr Davies added: “There has been a lot of work going on in the last 14 years to make the council more lean and more efficient.”

He said: “It leads us to a space where we have to reduce services or make cuts.”

The council has been engaging with the four voluntary sector agencies and despite the current funding contracts formally completing on March 31 a subsequent two-year tapered transition of payments is being proposed if it is agreed to withdraw funding.

A formal 12-week consultation with advice agencies was also launched on November 27, last year, and will run until February 19 and the agencies were also invited to take part in the public Budget Conversation survey between November 20 and December 15, last year.

The council’s cabinet is expected to make an overall decision on the best way forward for the proposals by its meeting on March 19.

A council report stated the authority is seeking to avoid a ‘guillotine position’ which would remove the funding within just the minimum three notice periods and it is instead seeking to establish a transition period which is affordable to the council but enables adjustment for the advice agencies.

Cllr Davies said: “We do not want to stop it right away. We know that it would make it difficult for them to plan.

“We are looking at a two-year period to help them bid for other funding.”

Cllr Davies stressed that the council has stood by these agencies for decades and despite the tough proposed changes he said the agencies had been ‘generous’ in how they are engaging with the council and the situation.

He said he hoped the proposed changes might also provide an opportunity for the agencies to consider a different way of moving forward.

Corporate Service Director Donna Reddish said the support for the agencies is discretionary and there have been discussions as they work towards what is hoped to be a ‘negotiated position’ with a preserved relationship.

Cllr Flood said: “We decry the fact we are in this position that the Government has placed us and the losers in this are the people of Chesterfield who have benefited from a lot of work with the agencies.”

She added: “All of them do some amazing work and the council has assisted them over a long period but it’s a sad state of affairs that we find ourselves in but as we say many councils have never had this relationship and put funding in and it’s an accolade to the council that we have done that. But as I say it is a sad situation we find ourselves in.”

During the current financial year the council allocated £120,375 to the Citizens Advice Bureau, £41,697 to the Derbyshire Law Centre, £39,681 to the Derbyshire Unemployed Workers Centre, and £16,002 to Links CVS – the Chesterfield and North East Derbyshire Council for Voluntary Service and Action Limited which supports community groups and voluntary organisations.

This current annual funding for the four agencies which all help the public and those in need of extra support was provided via the council’s advice agency grants provision.