SIX hundred desperate Wyre Forest families face losing a financial lifeline as a Government-backed agency slashes funding to a local debt advice service by half, it is claimed.

Wyre Forest Citizens’ Advice Bureau (CAB) warns the move leaves people at risk of losing their homes and suffering marital breakdowns, domestic violence and mental health problems.

At the same time as the local CAB debt counselling service is set to lose £25,000 a year, the Money Advice Service (MAS) is increasing its funding for similar services nationally by £3.6 million.

The CAB is appealing against the decision to halve its annual £50,000 funding from the end of September but if the cut still goes ahead, it will have to make one of its two part-time case workers redundant.

The branch, which helps 1,200 families a year, is challenging the MAS about the figures on which it is basing cuts in Wyre Forest and South Worcestershire.

Kate Bennett, Wyre Forest CAB manager, said: “We are asking for copies of the MAS data.

“Six thousand families have been helped by Kidderminster food bank and it is beyond belief that cuts are proposed to the only local community charity providing independent and confidential advice to vulnerable people in Wyre Forest.”

Mrs Bennett added: “The MAS does not realise the extent of deprivation in Wyre Forest, which is in the worst 10 per cent of deprived areas in the country and has three of the most deprived wards in the county.

“Wyre Forest has no law centres, no solicitors specialising in social welfare law and no funded debts centres.

We are the only port of call for vulnerable people.

“Even the County Court has moved to Worcester and we are reduced to using fax and e-mails to suspend warrants and make applications.

We handle five debt cases a day - 30 per cent of our total cases.”

Last year, the CAB branch completed 60 debt relief orders and 14 bankruptcy petitions.

Mrs Bennett said: “If interest rates rise, this problem will get worse, not better. The trouble is that when people are in a panic or dire straits they don’t make the best decisions and turn to high-value loans they can’t afford to pay back.

“This can lead to families being unable to pay their mortgages losing their homes and financial problems can lead to marital breakdowns, domestic violence and mental wellbeing is affected.”

Caroline Siarkiewicz, head of the UK debt advice programme at the MAS, said: “We are pleased that our funding for free face-to-face debts advice is increasing nationally, with an addition - al £3.6 million being spent this year that will help more over-indebted people.

“It’s vital that the money is targeted at those people and those areas that are most in need. This means that a few areas will, unfortunately, see a reduction in funding.”