Chai Cancer Care is joining forces with Manchester welfare charity, the Fed, to set up its first satellite service outside of London. A Manchester branch is expected to open in early 2009, but some counselling and therapeutic services could be on offer within weeks.

The collaboration was revealed by the Fed's new chairman, Mark Adlestone, at its AGM last week. Mr Adlestone also disclosed that an offer to house the Chai service has come from Heathlands Village, Manchester's other major welfare facility. The offer was made after Heathlands and the Fed announced plans to amalgamate just over a month ago.

Chai chief executive Elaine Kerr said a Manchester branch had long been needed. "We have always provided some support with telephone counselling. In the future we will offer a full range of services face-to-face."

Its partnership with Chai reflects the Fed's determination to expand activities. The charity is increasing expenditure by 10 per cent to £1.57 million, despite an operating deficit.

Fed chief executive Karen Phillips maintained that the credit crunch should not scare charities into playing safe. "You have to make a decision on whether to sit on your reserves." In the Fed's case, demand for its services was too great for it to do so.