Big society: Many charities face closure as cuts hit home

MORE than a third of charities have no cash reserves and drastic cuts could lead to many going bust, researchers have said.

Prime Minister David Cameron hailed the potential for "the biggest, most dramatic redistribution of power" from the state to individuals as he launched his Big Society agenda last month, signalling that voluntary groups and social entrepreneurs may take over some public services from the state.

But charities, unions, and Labour politicians raised doubts about how the plans would be funded while budgets were being slashed.

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Figures released by the National Council for Voluntary Organisations yesterday showed 36 per cent of "operating" charities, those that provide services, have no cash reserves to help them survive any cuts.

This includes one in five major charities, who are household names with yearly incomes of more than 10m, the organisation's figures showed.

Among small charities, those whose yearly incomes are between 10,000 and 100,000, the situation was even worse with more than half having no reserves.

Sir Stuart Etherington, the council's chief executive, said: "These figures show how vulnerable many community and voluntary organisations will be in the testing and unpredictable times ahead.

"Without a financial safety net, vital services for local people and communities will be at risk."

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