A raft of strategic changes including wage cuts and supplying welfare services to the non-Jewish community are being implemented by Manchester's largest Jewish charity to cope with local authority cuts and welfare reform.

Heathlands Care Village, one of the largest care homes in the country, is predicting further slashes to public funding due to proposed Government plans to replace NHS primary care trusts with GP-led consortia.

Karen Phillips, chief executive of the Federation of Jewish Services, which runs Heathlands, told a meeting of communal leaders on Sunday that the move stands to reduce the charity's local authority incomes further. Earlier this year the charity suffered reductions in some elderly supported living grants of 70 per cent, while the charity loses £1.5 million a year through shortfalls in public funding.

"We are negotiating with PCTs and trying to diversify our services to sustain what we do. We can be aggressive and lobby, but if there just isn't enough public money we have to do our best to work with local authorities," she told the Manchester Jewish Representative Council. Delegates held their monthly meeting at Heathlands in Prestwich to see the charity's work on the ground.

Mrs Phillips told delegates that a "business model" will see FJS providing services to the non-Jewish community in order to win local authority contracts. They would provide income to sustain Jewish services and would stave off funding shortfalls. More collaboration between Jewish communal organisations to avoid duplication of welfare services would also be sought.

Mrs Phillips reported that FJS had introduced wage cuts for a third of its staff and frozen wages for two years. But she said the changes were part of a five-year strategy, which will see 12 new staff and four clinical experts being hired over the next four weeks. It is an effort for Heathlands to be one of the first care homes to achieve the Care Quality Commissions' newly introduced gold standard. The recruits will improve care staff to resident ratios and introduce qualified nurses to lead specific areas of residential care.

But improvements came with a plea to Jewish families to contribute more for the care of elderly relatives. "We have to ask them to contribute to care otherwise this organisation won't be here in 20 years' time," said Mrs Phillips.

Representative Council president Lucille Cohen told delegates that discussions with Manchester City Council chief executive Sir Howard Bernstein had focussed on the possibility of launching a communal chest to fund Jewish charities. She said: "There needs to be an enormous sea change in outlook to welfare funding here in Manchester."