Edinburgh voluntary sector facing new funding cuts nightmare

COMMUNITY groups in the Capital have been warned they are facing more funding cuts, following a shake-up in the way millions of pounds of grants are distributed.

The city council has stopped receiving ring-fenced money from the Scottish Government to tackle poverty and inequality under the "Fairer Scotland" banner. Instead, the money will go into a central pot for council chiefs to decide how to spend.

Council leader Jenny Dawe has admitted that the number of projects that are supported will now have to be reduced next year, and she said that some organisations may need to be closed or merged with other groups as a result.

It comes just months after the council cut general funding for dozens of voluntary groups by more than 1 million.

Councillor Dawe said: "It was known that the ring-fencing would stop but that does not mean it will be easy because there are a number of organisations out there that will need to face the reality that the funding will not be there.

"We are not sure how much money will come across in what would have been Fairer Scotland funding but we know it will be a reduced sum of money."

The dedicated Fairer Scotland funding was stopped for this year, although the council initially opted to continue to ring-fence money for inequality and poverty projects and a budget of 7.5m was provided for the current financial year.

However, the money will not be ring-fenced in 2011/12, and a new council report has warned of the prospect of "much reduced funding" from 2011 onwards.

"There is no doubt that some organisations will need to merge and some will be subsumed by mainstreaming," said Cllr Dawe. "But all have been made aware of the changes and they should have plans in place to seek money elsewhere or to prove to the council that they are the best people to provide a service."

Among the dozens of groups to have benefited from Fairer Scotland funding in recent years are the Whale Arts Agency in Wester Hailes, which opened ten years ago to encourage regeneration, and the Edinburgh Community Food Initiative, which attempts to improve healthy eating in poorer areas.

Lucy McTernan, deputy chief executive of the Scottish Council for Voluntary Organisations, said: "The voluntary sector plays a massive role in tackling poverty and has an excellent track record of using Fairer Scotland funding.

"We're concerned that the council's proposed approach will allow very little input from the voluntary sector to tackling poverty. What's needed is real partnership between the council and the local voluntary sector."

Labour councillor and MP Ian Murray, whose Liberton/Gilmerton ward includes a number of groups that have been granted funding in the past, said: "The bottom line here is that when you remove ring- fencing it is a bureaucratic freedom to let you spend less.

"Fairer Scotland funding funds a lot of groups doing a lot of good work and they are all really worried about funding."