# Guidance issued to help organisations navigate local government financial difficulty

- Link: https://fundraising.co.uk/2024/10/23/guidance-issued-to-help-organisations-navigate-local-government-financial-difficulty/
- Published: 2024-10-23T09:00:00+01:00
- Author: Melanie May

**NAVCA and Lloyds Bank Foundation for England and Wales have set out recommendations
for community and volunteer organisations affected by local service cuts, and published
a report urging central government to provide guidance for councils that are in 
financial difficulty or have issued a section 114 notice.**

Since 2018, eight councils in England have issued 13 section 114 (s114) notices.
Prior to this, two had only been issued, both nearly 25 years ago. An s114 is issued
when a local authority cannot balance its books.

[The report](http://www.navca.org.uk/s114) calls on the new government to issue 
updated guidance for councils in financial difficulty or working through a s114 
notice and to provide greater oversight, advice, and support to councils pre-s114
to anticipate areas that could become vulnerable.

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Jill Hopkinson, Policy Manager at NAVCA, said: 

> “Financial instability is affecting many councils, and this is having an immense
> impact on communities. When councils are taking hard decisions to balance their
> budgets and cutting funding for voluntary and community sector (VCS) organisations,
> it can produce cliff edges which are detrimental to people and communities. Good
> relationships and communication between councils, local VCS infrastructure support
> organisations (LIOs) and the VCS are vital. Voluntary organisations are key partners,
> and collaboration with the sector facilitated by LIOs, can be an opportunity to
> reshape ways of working.”

#### Guidance for voluntary organisations

Guidance for the voluntary sector working with councils in financial difficulty 
includes that organisations should:

 * Evidence the VCSE’s role and its local contribution using data, demonstrating
   why it would be missed if funding were cut.
 * 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.
 * Reframe the external narrative to highlight the impact of cuts on beneficiaries
   and the wider community.

NAVCA and the Foundation urge local government to build relationships with voluntary
sector organisations, involving them early in the challenges and engaging strategically
in shaping new operating models.

Gary Beharrell at Lloyds Bank Foundation, said:

> “Small frontline charities are already picking up the pieces of more than a decade
> of local government funding cuts by subsidising contracts that don’t cover the
> full cost of delivering services and absorbing increased demand due to reduced
> support elsewhere. The pressure on small charities is further exacerbated when
> a section 114 is issued. Some of this pressure on small charities, and the eventual
> impact on communities, can be alleviated if local authorities and the voluntary
> sector collaborate and develop a strategic approach. For this to be achievable
> Government must provide greater support for local authorities struggling financially,
> and ultimately, for a review of local government finance arrangements.”

A [free webinar](https://us02web.zoom.us/meeting/register/tZYqceCpqj8qE9Z2ZfRb0VIoXZDuhT853s3l#/registration),
_How the voluntary sector can navigate local government financial difficulty_**,**
will take place on 20 November, at 11am.

 * **[Charity leaders write to Chancellor with sector asks ahead of next Spending Review](https://fundraising.co.uk/2025/01/21/charity-leaders-write-to-chancellor-with-sector-asks-ahead-of-next-spending-review/)**(
   21 January 2025)
 * **[CharitiesDirect publishes charity data online](https://fundraising.co.uk/1997/06/29/charitiesdirect-publishes-charity-data-online/)**(
   29 June 1997)
 * **[Star guide for donors](https://fundraising.co.uk/1997/09/20/star-guide-donors/)**(
   20 September 1997)