East London advice agencies have been left fearing for their future after an expected six per cent budget cut was — without warning — accelerated to 60 per cent by Tower Hamlets council, writes Elizabeth Davidson.
The cut potentially affects a dozen advice agencies – including Bromley by Bow Centre, East End Citizens Advice, Tower Hamlets Law Centre and Toynbee Hall — plus four smaller community groups which provide advice to specific communities such as Somali or Chinese residents. They were told in an email on 27 September that the six per cent cut they had been consulted on and were preparing for was to be increased to nearly 60 per cent – a cut that could lead to the loss of whole services as well as multiple redundancies.
Michael Ashe, director, East London Advice Co-operative, said: ‘The impact of this will be that some of the advice agencies will have to close. Others will have to close whole services, for example, their debt or benefits services. Others will cut back on their services.’
‘There will certainly be redundancies and some closures. These advice agencies help people from falling further into poverty, for example, people facing homelessness. These are often people who can’t afford to eat or to heat their homes. 50 per cent of pensioners in Tower Hamlets receive means-tested benefit supplements because otherwise they wouldn’t be able to meet basic living standards.’
On 4 October, the agencies affected were given seven days to write to the Mayor of Tower Hamlets explaining how the decision will impact on them in no more than a thousand words, and requesting a review of their grant share.
Ashe said the agencies want to work with the council where possible, but are also considering the option of judicial review and are looking at two possible grounds – that no equality impact assessment was available when the decision was made; and that the council did not follow proper consultation procedures.
The agencies say they were not consulted on the increase in the cut and were given no warning about the change. Some have questioned the wisdom of the cuts, with universal credit on the way, as councils are likely to face rising costs as they deal with the fallout. They make the point that legal advice at an early stage can nip problems in the bud or prevent them from escalating.
In August, Tower Hamlets Councillor Rabina Khan, lead member for housing in the Borough, warned MPs that changes to benefits and the benefits cap ‘have real potential to massively increase homelessness as housing becomes less affordable to those on benefits’.
Giving written evidence to the Work and Pensions Select Committee, she said the Council’s own analysis suggested about 4,000 households would be affected by the benefits cap. This would have a ‘knock on impact’ on other council services. As the council has a duty to house homeless families, it will face increased costs. Adult social care and mental health services will also come under pressure.
Meanwhile, the agencies are contemplating an uncertain future.
Sue Brown, Centre Manager, Tower Hamlets Law Centre, said: ‘After many months of working side by side with the Council and our partners in the Tower Hamlets Community Advice Network to produce an effective advice strategy, the sudden change of direction and proposed 60 per cent cut is a huge shock for all of us.’
‘It comes at a time when we are already trying to cope with huge legal aid cuts happening in April, and the loss of substantial support from the London Councils grants scheme, so it feels like the last straw. The Council has really valued advice over many years because they recognize that it costs a lot less than the results it achieves, in terms of benefits gained, homelessness prevented, debts written off or made manageable, employment disputes resolved.’
‘Add to that the costs to people’s mental and physical health when they don’t have a safe place to live, or enough money to feed and support themselves and their families, and funding advice services is a no-brainer. We can’t understand what has happened, why the goalposts seem to have shifted without any consultation or warning,’ said Brown. ‘Two weeks ago everyone was planning to cut their cloth in line with a six per cent reduction in the budget – that was £10,000 a year: now we are trying to work out how to save £64,000 a year. At the very least it will mean making expert staff redundant and turning away hundreds of people who desperately need help. At worst it could mean closing a service that has been giving access to justice to the community since 1974.’
A council spokesperson responded: ‘The council has been supporting the Tower Hamlets Law Centre for more than ten years. The Law Centre provides free legal advice and assistance to residents providing vital support to those on low incomes. We are currently providing a grant of £145,207 (per annum) which was commissioned from April 1 2008 and runs till December 31 2012. The Tower Hamlets Law Centre has been recommended a grant of £145,287 for the next 27 months from January 1 2013 to March 31 2015′.
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