The Oswaldtwistle Area Forum has been disbanded after council bosses emptied their bank account to pay for new projects.
Chairman Peter Britcliffe said they are ‘very sad and angry’ to close the forum but are now planning to set up a welfare and support group which is separate to the council.
The Observer revealed in July how £24,000 had been removed from the area forum’s account leaving them with a balance of just £16.
The monies had been earmarked to support the town’s organisations and charities with an allocation of around £5,000 every year until 2023.
Hyndburn council leader Miles Parkinson said the money was used to pay for improvement projects in Oswaldtwistle and the forum would not be reimbursed.
A meeting was held with residents at Oswaldtwistle Social Club to disband the forum and ‘rethink the way forward’.
County councillor Peter Britcliffe said: “It was a very successful meeting and despite the fact that people were shocked at how the money had been taken from us quite undemocratically they were very supportive of the idea of moving forward with a new group that isn’t tied to the council.
“The area forum which was linked to the council is, as far as we are concerned, finished and we move forward with a new group which isn’t linked to the council.
“Because of that we can now apply for charitable status and it makes us eligible to apply for grants.
“While we are very sad and quite angry at what’s happened we are very positive about how we are going to move forward.”
A fundraising evening will be held at Reena Tandoori in Oswaldtwistle on Thursday, November 22.
Speaking at a recent council meeting, Oswaldtwistle councillor Marlene Haworth said leader Miles Parkinson had shown a ‘complete disregard’ for their constitution and urged him to re-instate the funding.
Coun Parkinson said the decision was made while he was away on holiday and that he was ‘not consulted’.
However he was ‘pleased that it has all been spent in Oswaldtwistle’ including land on Harvey Street, West End gardens, replacement wireless CCTV and planters.
He also agreed to support other projects at West End Methodist Church, White Ash School and Jubilee Gardens which had been already been bid for.