The 'Big Society' crisis on Cameron's doorstep

Special report: Across Britain, record numbers of vulnerable people are turning to Citizens Advice – just as the organisation faces cuts. Sean O'Grady finds the Prime Minister's constituency among the hardest hit

Britain's Citizens Advice Bureaux face a funding crisis just as they are being hit with an unprecedented increase in demands on their resources, especially by people finding themselves in debt.

Some are seeing their local authority funding cut by two-thirds at a time when the number of clients seeking help with debts, benefits and homelessness has as much as doubled. The West Oxfordshire bureau, in David Cameron's constituency of Witney, is one of those badly affected.

Speaking to The Independent, Gillian Guy, the chief executive of Citizens Advice, warned that there was definitely a risk to the most vulnerable from benefit changes that were being introduced too quickly, with "unintended consequences". She also said cuts to legal aid would affect the bureaux.

She urged ministers to "pause for breath" and delay implementing some of the most controversial reforms, especially to housing benefit. Consumers also face the biggest setback to their cause in decades, she warned, as Citizens Advice was under no obligation to take on the work of Consumer Focus, the soon-to-be abolished quango, as ministers had planned.

Ms Guy's social concerns centred on the "cumulative effect" of changes to housing and council tax benefit, which will prompt many people between the ages of 25 and 35 to share homes. She urged ministers to "please be cautious and delay or phase changes, to housing benefit in particular". She said: "There isn't sufficient evidence that all the cumulative impact of the different measures have really been looked at."

Public-spending cuts could mean a family loses its main breadwinner and becomes reliant on someone working part time. That will affect the kind of benefits they would get, especially with the cap on housing benefit, Ms Guy said. "If someone finds themselves without a job because they are incapable of working due to health reasons, they'll find that after 12 months their benefits will be reduced, even though they are on jobseeker's allowance," she said. "It is those different impacts coming together that need to be analysed so there are no unintended consequences."

In the Prime Minister's West Oxfordshire constituency of Witney, Citizens Advice said that in the past year it had been made aware of an increase of almost 50 per cent in debt problems. As a volunteer-based, independent charity – albeit partly reliant on public money – Citizens Advice is just the type of Big Society institution the Prime Minister says he wants to build up.

But for consumers seeking redress against scammers, fraudsters, arrogant utilities or a confusing and bureaucratic benefits system, help may soon be harder to obtain.

In the review of quangos, ministers said they intended to abolish Consumer Focus and that its functions would be taken over by the Citizens Advice Bureau. While in favour of the move, and confident that her organisation could offer better value for money, Ms Guy was clear that there was no guarantee the organisation will take on the watchdog's work.

"We can't make offers to consumers on what we can do for them and then fail on the offer," she said. "That is worse than not doing it in the first place. There are limits." Funding was the crux. Ms Guy said some local authorities were maintaining or reducing their funding only slightly, whereas others believed it was easier to cut grants to bodies such as Citizens Advice, rather than make their own staff redundant.

Without advice on hand, small debt issues spiralled into bigger problems such as poor health and homelessness – which meant bigger bills for the state. The number of people aged 25 and under seeking debt help from the Citizen's Advice Bureau has increased by 21 per cent in the last 12 months.

Ms Guy's message to the Department of Work and Pensions, the Treasury and No 10 was clear: "We would say hold the press and think about analysing information and be clear about the consequences.

"We have also talked about the possibility of delaying some of the implementation so that we can just phase the impact a bit, so families have time to move, for example, if they can't afford the accommodation they are in. That makes the impact easier to bear. If it is sudden, then it is very difficult.

"And, of course, we ask to keep pushing resources into advice services such as CAB, because they will pick up the consequences of the measures."