Citizens Advice Bureaux (CABs) may be forced to close and reduce services because of cuts in funding from both local councils and central government.
Ministers were urged last night to throw a lifeline to CABs as they provided vital support to people struggling to cope with the impact of the recession.
All the main sources of income for the 394 bureaux in England and Wales, which received £179m in funding last year, are threatened as the Government's austerity measures begin to bite.
Just under half their income – and the money usually used for their buildings and staff costs – is supplied from town hall budgets.
But with local authorities' grants being squeezed by more than one-quarter over the next four years, there are fears that cash allocated to advice services will inevitably suffer a similar cut.
The Independent has learnt that CABs, which dealt with 2.1 million customers in 2010, fear their income from councils could fall next year by an average of 12 per cent, leaving a question mark over the survival of some offices.
Birmingham City Council provoked uproar this month when it announced it was withdrawing £600,000 of funding used to run five CAB offices in the city. They are to remain open for the moment after emergency talks, but the episode was a foretaste of threats to CAB offices certain to arise over the next year.
John Denham, the shadow Business Secretary, said last night: "CABs, and many other respected local organisations, face a real crisis, which means they will no longer be there to help families facing tough years ahead.
"When prices are rising and jobs disappearing, people need the support of an independent, effective advice agency more than ever."Reuse content