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					                                                                           APPENDIX 2


Draft letter from Andy Roper, Chair of Ealing Community Network (ECN) on the Council’s /
NHS Ealing latest Funding Proposals.

Note that this letter is subject to discussion at the next ECN meeting on 18 th January 2011.


                                                                          Ealing Community Network
                                                                          The Lido Centre
                                                                          63 Mattock Lane
                                                                          London W13 9LA
                                                                          Tel: 020 8280 2237
                                                                          Fax: 020 8280 2289
                                                                          Email: ecn@ealingcvs.org.uk
                                                                          www.ealingnetwork.org.uk

To: Councillor Julian Bell Leader Ealing Council,

cc LBE Cabinet Members, Martin Smith Chief Executive, Brendan Walsh, Nigel Fogg, Leanda
Richardson, Maggie Wilson

cc ECN Steering Group

19 January 2011

Dear Councillor Bell

Voluntary Sector Funding Cuts

I am writing as ECN Chair to put some further comments to the LBE Cabinet prior to this issue
being considered at the Cabinet meeting on 25 January. These proposals were discussed at the
open ECN meeting on 18 January

ECN understands at this stage the issue is for Cabinet to consider revised proposals from
Officers on VCS funding reductions for a further round of consultation.

ECN recognises the severe financial pressures facing Ealing Council and that you are having to
make very difficult decisions across a range of areas. As voluntary sector reps we have agreed
to play our part and that, if necessary, voluntary sector funding may have to be cut by the same
level as overall cuts to other Council services. This is, we feel, a responsible position by the
voluntary sector in Ealing

ECN welcomes the open approach to date in terms of consultation and would like to place on
record our appreciation of the efforts made by LBE Officers and in particular Nigel Fogg,
Brendan Walsh, Leanda Richardson and Maggie Wilson

ECN also welcomes positive developments achieved to date through consultation and the



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setting up of the joint LBE/PCT/ECN VCS Funding Panel. The proposed rollover of existing
community grants and health and social care grants to September 2011 is very helpful (though
earlier decisions will be needed in relation to currently ABG grants which end in March)

We also welcome many elements of the revised proposals from LBE Officers and in particular:

       One year transitional funding to support local VCS groups to develop revised business
        models and new forms of income generation
       One year transitional assistance to groups facing loss of major ABG funding
       One year assistance to dampen the impact of cuts on health and social care groups
       Continued support for ECN as a collective forum for the local VCS sector
       New local funding for area based VCS activities (covering all areas of the borough)
       Increased funding for local VCS advice services and continued support for local
        domestic violence projects

ECN recognises that final decisions have not yet been made and that there are issues still to be
addressed as a result of changes to local authority funding and the roll up of previous ABG
funding streams into formula grant or the new special grants. We also recognise there are many
hidden cuts within these funding areas despite national headline announcements.

We hope LBE Councillors will recognise these will also be extraordinarily difficult times for
the local voluntary sector. In addition to very large cuts in local funding through Ealing
Council and Ealing PCT many local VCS groups are faced with a drying up of national and
charitable sources of funding at a time of increased demands for VCS services as a result of
economic conditions, reductions in welfare support and rising unemployment.

Ealing has always had a strong local VCS (supported by the Council), a good record in
securing external funding and been repeatedly recognised as a regional and national model of
good practice. We hope LBE will work with us to maintain a reasonable core of local VCS
services which can be built up again as and when the financial environment improves

Decisions made now by LBE will determine the shape of the voluntary sector in Ealing for
many years to come. On that basis, ECN does have some significant concerns regarding
current proposals from LBE. In summary, our major concerns are:

1 That, as things currently stand, LBE is proposing significantly bigger cuts in local VCS
funding than in the overall LBE budget

2 That LBE are proposing bigger cuts in VCS funding than other West London boroughs

3 That LBE are proposing to cut VCS funding more quickly than cuts in other Council
frontline services

4 That there are inconsistencies in the treatment of health and social care grants and in
community grants

5 That LBE needs to consider VCS funding in the round and other current budget savings
proposals around cuts in discretionary rates relief and around current ABG funding would
involve additional major cuts on local VCS groups



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6 That in addition to current consultation around cuts in direct grants a similar open dialogue
needs to take place with the local VCS around the cuts in formula grant and uses of new
special grants

To explain these points:

1 ECN has recognised that the VCS needs to share the burden of funding reductions on the
same basis as cuts elsewhere in the LBE budget. This policy was agreed over a year ago and as
you know ECN wrote to all local parties prior to the recent elections in May

However, at present the LBE Cabinet has approved cuts over 3 years of 25% while current
proposals are to cut health and social care grants by 35% and community grants by 30%

ECN recognise the LBE position may change as a result of the national funding announcement
and final decisions are not until March

ECN recognises that should VCS funding eventually be cut by the same level as the overall
LBE budget this will have been driven by national decisions. However, should the Cabinet
agree to make higher cuts in VCS funding, this will be a local choice which VCS groups would
find hard to understand

2 Equally we would look to LBE to support its local VCS to at least the same degree as other
West London boroughs who are all facing similar budget pressures (especially since Ealing
Council has had a better track record on VCS support to date)

Based on information we have received, ECN understands one West London borough is
planning VCS cuts of 16% and another of 10%. In addition, Hounslow Council is currently
consulting on cuts of £21m in 2011/12 but is not currently planning any cuts in direct grants.
These proposals in other neighbouring boroughs are well below current Ealing Council
proposals for VCS cuts of 35% (health and social care) and 30% (community grants)

ECN recognises this information is not yet complete and the position could change in some
boroughs. We will aim to collate full information prior to final decisions by the LBE Cabinet in
March

However, VCS groups in Ealing would find it difficult to comprehend should LBE eventually
decide to cut support to its local voluntary sector by much more than in other areas of West
London

3 In November the LBE Chief Executive wrote to local stakeholders to advise that cuts in
frontline LBE services would form a minority of budget saving proposals and that direct
frontline cuts would be “implemented as late as possible”

Based on current LBE proposals, cuts in community grants would be phased over two years
but the full annual 35% cut in health and social care funding would come into effect after the
rollover in September 2011(ie 17.5% in the second six months of 2011/12).Why are cuts in
frontline voluntary sector services being implemented more quickly than in the overall Council
budget?




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4 The current LBE proposals would (a) involve different levels of cuts in health and social care
grants than in community grants and (b) cuts in health and social care grants would be phased
in more quickly than in community grants

There is no valid reason for this (many Councils do not have separate budget arrangements for
health and social care and other grants) and it seem this is simply because these grants are
managed by different LBE departments and reflect different budget pressures in these two
specific departrments

5 The proposed ringfencing of returned London Councils funding for VCS support in 2011 and
other proposed one year transitional measures are a very positive step by LBE. However, under
current proposals from March 2012 this funding would fall off a cliff and returned London
Councils VCS funding would also be cut by 30%

It is important for Councillors to recognise that cuts of 35% /30% implemented too quickly
will not simply lead to a 35%/30% cut in voluntary sector services for local people, for many
VCS groups (especially smaller VCS groups) this pace of cut would mean they will collapse
completely.

Local VCS groups may be able to survive large funding cuts and develop alternative income
generation models (such as new social enterprises or offering new care packages to holders of
personalised budgets) but they will need time and support to do this.

ECN is aware that some London boroughs have already committed to ringfencing returned
London Councils funding for long term VCS support and we would strongly urge LBE to
adopt a similar policy

6 ECN would also strongly urge LBE to consider the overall impact of other budget savings on
local VCS groups. Two areas in particular are of concern:

       For many local VCS groups ABG funding is now as significant as direct LBE grants
        and some key VCS groups only receive ABG funding and not direct grants. If this
        funding is now also lost through new formula grant arrangements it would involve
        major additional local VCS cuts

       LBE is currently consulting local VCS groups on large cuts in discretionary rates relief.
        ECN recognises that any reductions would only apply from April 2012 but current
        proposals would involve an 80% cut on current LBE support and an additional loss of
        some £300,000 for local VCS groups. The proposals would badly hit many very small
        VCS groups who do not get any other form of LBE funding as well as some larger
        groups who offer services to vulnerable people at different premises across Ealing

Both these areas are now at the discretion of LBE. Cabinet members need to be aware that if
these additional major cuts do proceed the overall reduction in local VCS funding will be much
higher than the already severe 35%/30% headline cuts in direct grants

7 ECN is aware that changes to formula grant and new special grants are complex and require
detailed analysis compared to current ABG grants. ECN is also aware that additional
information is needed in some cases. In particular:



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       It is not entirely clear what the new Learning Disabilities and Health Reform Grant
        covers and how it compares to current ABG grant streams (eg carers grant, mental
        health grant)

       The Home Office is due to announce local allocations in January to replace current
        ABG grants around community safety

ECN is also aware that the new allocations involve reductions on current ABG and other
funding and in many areas the Government is expecting local councils to do much more with
much fewer resources

Nevertheless these still involve significant sums. Taking just two key funds which in part
replace previous ABG streams, Ealing will receive £6.5m Learning Disabilities and Health
Reform Grant and £15.4m Early Years Intervention Grant in 2011/12-around £22m in total

We hope, as it has done to date, LBE will consider value for money and services to vulnerable
users in commissioning at least some of this funding through the local VCS. If just 10% was
used to purchase services through the VCS (not unreasonable as 90% would still be delivered
through direct LBE provision) the £2m or so per year commissioning income would
significantly mitigate local direct grant cuts

But it would have the additional advantage of supporting local VCS groups to develop new
business models open up new income streams and encourage the development of new local
social enterprises, co-ops and mutuals


In summary, ECN wishes to put the following points and proposals to the LBE Cabinet

1 ECN has said it will share the burden of local funding cuts and we stand by that commitment.
We hope however when final decisions are made LBE grants budgets are cut by no more than
the overall cut in the LBE budget

2 At the same time we hope LBE will have the same level of commitment to the local VCS as
in other West London boroughs. We would ask LBE Councillors to at least consider a
commitment to a maximum 20% cut in grants budgets (on current information still potentially
a higher cut than elsewhere in West London)

3 We would ask LBE to phase VCS funding cuts on an equal basis with overall LBE cuts over
3 years (not the current 1 year proposed for health and social care grants and 2 years for
community grants)

4 We would ask LBE to amend current proposals so both the level of cuts and phasing are
applied equally and fairly in health and social care grants and in community grants

5 We would ask LBE to extend the ringfencing of returned London Councils funding for 2
years not 1 year as currently proposed to allow VCS groups sufficient time to adjust, develop
new business models and secure additional income to mitigate direct grant cuts




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6 When the Cabinet considers final proposals in March we would ask that Officers identify
overall levels of cuts in local VCS support- including potential cuts in current ABG funding
and in discretionary rates relief as well as direct grant cuts- so Councillors have the full picture

7 We would ask that relevant LBE Officers meet urgently with ECN reps to discuss LBE
proposals on future uses and allocation of special grants-especially the Learning Disabilities
and Health Reform Grant and Early Years Intervention Grant and revised Home Office
community safety allocations once these are known

We will await the final LBE proposals for consultation but in the meantime I am happy as ECN
Chair to discuss any of the issues in more detail. You can contact me on
andy@ealingcvs.org.uk

Yours sincerely

Andy Roper
Chair, ECN




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