Citizens Advice Bureau under threat because of spending cuts

The head of the Citizens Advice Bureaux (CAB) has warned that cuts will force the charity to close many of its centres.

Gillian Guy, head of CAB, told the BBC that: "We are facing a real threat to vital funds at a time when demand is increasing, and will continue to increase, as all the financial and social changes come into effect.

"Hundreds of thousands of people may not be able to get much-needed help next year."

With all local authorities having to make tough decisions about their budgets, CAB is the latest victim of the spending cuts. This begs the question whether the charity can feasibly take over the work of organisations such as Consumer Focus, which is one body that has been earmarked for the axe under the spending review, and also  run the Office of Fair Trading's Consumer Direct helpline.

Computeractive has learned that Nottinghamshire County Council proposes to slash funding from £300,000 a year to £100,000.

The council will vote on this proposal next week, but councillor Kay Cutts said: "We ... need to reinvest £39m next year on vulnerable adults and children. There will be no easy decisions."

In another case, Birmingham city council funding has ended completely leading CAB to announce that the city's five centres will close down this month.

A representative for the council said CAB had been given plenty of notice that existing funding arrangements were ending.

"We've always made it clear to agencies that funding was not guaranteed beyond any single year, up to a maximum of three years. It was never our intention for agencies to become dependent upon this source of funding, or that it form their sole source of income," he said.

We are still waiting to hear back from other local authorities to get a clearer picture, but many more CAB centres around England and Wales may also be affected; with CAB claiming that up to 45 per cent will shut down.

The charity's funding is complex. Much comes from local authorities, and county, city and parish councils. And the way CAB is funded by these bodies differs from area to area.

In a statement Birmingham City Council explained how it funded agencies. "The council's contracts with the current providers ceased in March 2010 and were rolled over until 31 December.

"From 31 December a funded notice period of 90 days was in place to provide some protection for the providers and CAB was paid £150,000 notice payment to enable them to continue to offer services in the interim period.

"Individual meetings are being held with the service providers, including the CAB, to engage them with the recommissioning process."

We asked CAB for futher comment and also if it had heard from the Cabinet Office about additional funding to run services such as Consumer Direct. We are still waiting to speak to the charity and for a reply from the Cabinet Office.