Plans to give individual London boroughs control of a large tranche of funding for the not-for-profit sector could see hundreds of projects axed, Unite, the largest union in the country, warned today.

Unite believes that proposals for the London Councils’ Grants Committee (LCGC) to repatriate a significant proportion of their funding to individual councils will see projects closed down, as there will be no ‘ring fencing’ of the cash.

Doug Nicholls, Unite national officer for the not-for-profit sector - which has 20,000 voluntary sector members in the capital - said: "Plans by the LCGC will let Londoners down and be another nail in the coffin of a strategic shared approach to solving some of the capital’s most entrenched social problems.

"A worst case proposal could see funding for 400 projects end on 31 March next year and future funds disappearing into the overall councils’ budgets with no ring fencing or guarantee that it would go to the voluntary sector to support the most disadvantaged."

Unite is calling on all London councils to retain a London-wide funding scheme for a range of vital services provided by voluntary sector organisations.

The LCGC is likely to take a decision on its future on 25 November, after the present consultation process has ended.

Unite has written to London’s Mayor, Boris Johnston and Labour’s candidate for the 2012 mayoral elections, Ken Livingstone seeking their responses to this proposal.

Currently, London councils invest £28m a year in voluntary organisations on behalf of all the London councils.

They fund more than 400 organisations, with individual grants ranging from between £5,000 and £500,000.

This council’s funding is provided by the London Boroughs Grants Scheme, which was established by the 1985 Local Government Act.

The scheme is funded and governed by all 32 London boroughs and the Corporation of London.

It enables London’s local authorities to fund voluntary organisations working in more than one borough, sub-regionally or across the capital to meet the needs of London as a whole.

The operation of the scheme is managed by the Grants Committee which comprises 33 representative members, one from each of London’s local councils.

Nicholls said: "Our members have worked with this excellent grant scheme for 25 years and it has made a real difference to Londoners, for example:
reduced social exclusion, poverty and disadvantage, particularly through funding for projects working with children and young people and people with multiple needs, providing legal and advice services, promoting employment and decision making opportunities.

"With the Comprehensive Spending Review having created a hole of about £1.5 billion for local authorities, you can see they will be tempted to claim back any penny from anywhere. But this will only lead to the further fragmentation of essential services in London. It will not be cost effective.’

"To retreat from this would be to retreat into a callous, chaotic postcode lottery and to abandon some of the most cost effective support services for our capital."

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