Navigating local government financial difficulties - new guidance

Last week, we published new guidance, in partnership with Lloyds Bank Foundation for England and Wales, for voluntary sector organisations affected by local government financial difficulty, sometimes leading to the issuing of a section 114 (s114) notice. Keep reading to find out more about the project.

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As government funding fails to meet the growing costs of delivering essential services, pressure on local authorities is mounting. Many are already cutting services and funding to the voluntary sector, and several councils are on the brink of issuing an s114. That’s why we worked with Counsel and Lloyds Bank Foundation for England and Wales to produce guidance for local and smaller VCSE organisations operating in areas experiencing a section 114 or that may be likely to in the future.

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To create the guidance, we interviewed organisations from the local government sector and a range of voluntary, community and social enterprise (VCSE) organisations, including local infrastructure organisations (LIOs). We also engaged with local authorities who are under (or have been under) a section 114 notice, those at risk of it, and those where finances appear relatively strong but may enter into these phases in future.

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We know that good relationships and communication between councils, local infrastructure organisations and the VCSE sector are vital. Voluntary organisations are key partners, and collaboration with the sector, facilitated by LIOs, can be an opportunity to reshape ways of working. The guidance makes some key recommendations for voluntary sector organisations in the event of an s114, or in anticipation of one:

- Evidence the VCSE’s role and its local contribution using data, demonstrating why it would be missed if funding were cut.

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- Build relationships with council and with other sector partners using a collective voice, identifying how information can be shared across local VCSE networks to develop a collaborative approach to support the community.

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- Reframe the external narrative to highlight the impact of cuts on beneficiaries and the wider community.

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The guidance outlines six key stages that you might expect to see if your local council is experiencing financial difficulties, based on interviews with VCSE organisations, but you might see something different in your local area.

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You can download the guidance here, and we encourage you to share with your local networks.

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