Briefing No:2 Voluntary Sector Cuts in Manchester

This briefing will be updated as we receive new information. The latest version can be downloaded from Manchester Community Central Cuts Pages.

Impact on the Voluntary and Community Sector (VCS)
The table below shows the proposals for budget cuts detailed at the Manchester City Council (MCC) meeting for the VCS held on 1st December and other MCC cuts that are likely to impact in the period 2015 to 2017. You can download the slides from the Council’s presentation at the event on 1 Dec here.

We have tried to be as accurate as possible but the figures in the table below may change as new information is received. They are intended to give an approximation of the overall impact on the VCS of cuts. Organisations who want to find out the extent of the cut their organisation is facing should contact MCC directly.

Some important points to note about the following table:
• All figures in the table are in £1000s
• Some areas have one proposed option. Some have a lower and higher option
• Some cuts have been estimated based on a pro-rata cut as the VCS receives part of a larger budget
• Some of the proposed cuts will not take place until the financial year 2016/17

The total cuts so far detailed amount to between £6.1 million and £7.5 million, however, there are a number of areas of funding that we do not yet have information on that will impact on the VCS including:
• Immigration Advice
• Support for Children Leaving Care
• Youth and Play Services
• Spot-Purchased Advice Services
• Home Improvement Agency
• Short Breaks
• Troubled Families Framework
• Loss of rent from council services using VCS premises

A conservative estimate is that this will add a further £1 million, increasing the levels of cuts to the VCS to between £7.1 and £8.5 million.

Impact on the City’s Economy
Using a conservative multiplier figure of 2:1 for the extra income that the VCS brings in through grants and contracts then the direct financial loss to the city will be between £21and £25 million.

Full time equivalent job losses are estimated to be between 190 and 230 but as many VCS staff are part-time this equates to between 310 and 380 staff. The VCS is generally better than other sectors at employing local people and employing a more diverse workforce.

There will also be an impact on volunteers, as many of these staff will have a role in supporting volunteers. Estimated volunteers losses are between 1500 and 1800.

Many VCS organisations support other VCS organisations and so the impacts will be multiplied particularly for smaller VCS organisations. At least 150 VCS orgs will be directly impacted by cuts and at a conservative estimate a further 300 organisations will suffer knock-on impacts.

Impact on Communities
In general VCS organisations tend to have a high level of social value in addition to the direct services that they provide, which is much higher than that of private or statutory organisations.

Among other benefits they improve the lives of their volunteers, their environment, their communities, other organisations, and are more likely to spend money in the local economy. This amplifies the impact of cuts in the VCS by a significant amount.

As the VCS works with many of the most vulnerable people living in Manchester and the most disadvantaged communities then the cuts will impact disproportionately on those that most need help. The VCS also plays a huge role in preventing future problems.

How the Cuts will be implemented
Where possible MCC will wish to avoid re-procurement due to the high cost. All the cuts have to be realised between April 2015 and March 2017. There are 3 ways in which cuts can be implemented:
• Termination of contract/grant: The contract or grant agreement is terminated either at the end of the intended term of 1-3 yrs (usually) or earlier with 3 months’ notice.
• Renegotiation of contract/grant: A negotiation process is held with each organisation to agree a reduction. If a reduction cannot be agreed by both parties then the contract/grant may be terminated and there will be a new procurement process.
N.B. Renegotiation is about the entire terms of the contract or grant not just about the amount. See What to offer 
• Re-Procurement: At the end of the intended term of the contract or the grant agreement or earlier if renegotiation fails, there is a new procurement exercise at a reduced amount.

Decommissioning and Impact Assessments
MCC has to assess the impacts of any cuts it makes and is sending out impact assessment forms to all organisations that may face cuts. This is an important opportunity to communicate the impact on your organisation, your community and your service users of potential cuts, not only to your own organisation but of other organisations on which your users rely.

MCC’s De-commissoning Guide is available here. This sets out the legal framework within which the council must act (including the Equality Act), the types of impact it should consider, and the process of decommissioning.

Lobbying, Consultation and Consultation Events
MCC is required by law to carry out a consultation and take into consideration the feedback it receives. VCS organisations should encourage their staff, trustees, supporters, and people who use their services to make their views known.

There are a number of online questionnaires which are split up into a confusing set of themes. The one entitled “voluntary and community sector” in fact only covers a small proportion of voluntary sector services which have been oddly lumped together. There are also areas which are missing entirely. At present some of the forms do not appear to be working properly.

There will be a number of targeted events around particular themes and the impacted organisations will be contacted directly. Details will be available from Macc as we get them.

Actions you can take include:
• Lobbying individual councillors – see our Guide to Lobbying
• Asking to speak at scrutiny committees (16-18 Dec) or the Council Executive - Guide to Scrutiny Committees
• Councillor Sue Murphy – Deputy Leader and Executive Member who leads on the VCS said at the Council briefing for the VCS on Dec 1st that VCS organisations should feel free to contact her directly with their concerns. [email protected]
• If you wish to discuss how the cuts may impact your organisation then contact Nathan Atkinson at MCC by email at [email protected] or by tweeting to @MCC_ComHub

The consultation ends on 26 January 2015.

Key Dates
• 11 December: Emergency Voluntary Sector Assembly to Discuss Cuts, Mechanics Institute, 1.30pm
• 16-18 December: Scrutiny Committees
• 26 January: End of Manchester City Council public consultation
• 13 February: Executive meeting following the end of consultation period
• 6 March: Full Council meeting to confirm budget

Support from Macc
Macc is working to ensure that the VCS makes clear to the Council the full impact these proposed cuts would have. We want to know about how the cuts are going to impact you, your organisation and the people you support, email [email protected]

We encourage all VCS chief execs to join the regular meeting for Chief Executives of local groups which Macc coordinates. Please contact us to join this group.

Key Resources
• Macc’s new webpages with resources and updates on the cuts
• Read Mike Wild’s blog Today We Are Angry, Tomorrow We Must Talk 
• Budget Savings Options for the Children and Families Directorate
• Budget Savings Options for the Growth and Neighbourhoods Directorate
• What to offer (guidance on negotiating a cut in a contract)

Further information as we get it will be published in the weekly ebulletin and on our cuts webpages – link above.

If you’re on twitter you can follow us on
@PolicyVoiceMacc
@McrCommCentral
@NigelMacc
@MikeWildMacc

Please use the hashtag #McrFundingCuts

Please send comments, additions, and corrections on this briefing to [email protected]

Click here to download this briefing