WhEn the snow came last Christmas, Veronica Lally was run off her feet. There were meals to be made, hot water bottles to be filled, socks to be located and delivered, as those most afflicted required some basic comforting.

The afflicted in question were elderly residents of Dolphin House, one of Dublin's largest public housing complexes. Living alone through the winter of life, many of these men and women have no kin, certainly not in the city. Contact with the outside work is largely reliant on the local community.

Enter Lally and her colleagues in the Dolphin Park Senior Citizens Project. Fourteen workers, most of them on a community employment scheme, improve the quality of life for the elderly, who live in 44 single-room units.

At times like last Christmas, the work can be the difference between life and death.

"Some of them would even have been afraid to turn on their heating at the time because of the cost," Lally says. "We were going non stop for those few days, at it from morning till night, and you could see how much they appreciated it."

In less frantic times, the work done by the project workers raises lives of drudgery and hardship onto a plateau where declining years can be brightened and even punctuated by joy. It's not the kind of work that can be reduced to a cost/benefit analysis on a spreadsheet.

"There is a very strong community here, a very close-knit community," she says. "Look at our senior citizen complex, which does meals seven days a week. If the cuts come, is all this going to be hit?"

The cuts she speaks of now hang like a dark cloud over communities such as Dolphin House. With the four-year budget plan recently unveiled, and major cuts in public spending expected immediately after this week's budget, thousands who work in disadvantaged communities are fearful for the very social fabric of their areas.

Most sections of society are expected to feel the pain. Politics dictates that cutbacks usually have a much greater impact on those most reliant on services. In places like Dolphin House, the pain, if not managed properly, has the capacity to develop into something terminal.

The complex is located in the south Dublin suburb of Rialto, between the Grand Canal and the South Circular Road. Around 1,000 residents are housed in seven blocks of apartments. The complex was built 55 years ago, when planning took no account of the potential for social problems in large public housing projects. A survey in 2006 found that the level of dependents in Dolphin House was one third, compared to a national average of a quarter.

Physically, the infrastructure is already disintegrating, with problems around waste water smells, and in some cases, waste water coming back up sinks and baths. Overcrowding is also an issue, and dampness is a growing problem.

Yet in the face of adversity, the social fabric remains strong. Community spirit manifests itself in an ability to operate projects like the Dolphin Park Senior Citizens Project. There is also a crèche, vital in an area which has a high proportion of single mothers. Breakfast mornings, homework clubs, young mother groups, drop-in centres – all operate, and all are widely utilised. In more affluent areas such facilities might be regarded as nice. Where the threat of poverty exercises a heavy pull on communities, these facilities provide vital scaffolding.

"We found a lot of depression and stress-related illnesses and a high proportion of people on prescribed medicine," says Susan Lawlor, a community health worker in the complex. She recalls that one young mother in a group she runs used to go to her GP just to have a chat, such was her isolation.

"A lot of that can be addressed by contact work, getting people out of their homes, dealing with basic literacy problems, providing a drop-in centre. These things matter hugely to a community like this. Contact work is hard to value in a number-crunching way."

The glue that holds together much of the services in Dolphin House is the community employment scheme. The scheme underpins the whole social economy in disadvantaged communities, but there are dark mutterings that it might be regarded as an easy target when the axe is wielded.

Marion Kelly is one of the Community Employment (CE) supervisors in the complex. She oversees 27 men and women on CE schemes, most of whom use the three-year scheme to move on to further education. "Most of them will go on to employment," she says. "We have a very good record of being able to put people back to work."

One of the feared cuts is to what is called the double payment. CE workers receive a reduced social welfare payment along with a basic part-time wage from Fás. Eamon Ó Cuív's proposal to put to work some people on the dole for no extra money is regarded as a threat to the scheme. Kelly reckons it would be unworkable and economically nonsensical. "I have women here who pay up to €100 for childminding so that they can come to work. If they weren't getting the double payment, they wouldn't even be able to survive. It makes no sense. Do they not want lone parents to have the chance to get back into the workforce?

"As well, the money they are spending is going back into the community. That activity would dry up.

"Already we're under severe pressure with the cutbacks that there have been to things like the home help service."

Veronica Lally agrees. "Why should the senior citizens who avail of our service have to suffer in these cutbacks?"

It's not as if communities like this haven't enough to be going on with in dealing with the fallout from the bubble years. One boon of the building boom was the opportunities for employment in the construction industry. Work raised many out of poverty, instilled dignity and dispatched legions of young men down a new path. Now, it's back to square one.

"In the last 10 years, young people were able to find employment," development worker Wally Bowden says. "The only thing operating economically now is the drug culture. The community has to compete with that. With masses of young people hanging around some are going to look at that culture. The risk is calculated against what can be got out of it. Before, they didn't have to go over to the dark side."

Across the South Circular Road in St Andrew's Resource Centre, there is a steady stream of people through the doors where the Rialto community drugs team operates.

Team leader Tony Mac Carthaigh has had his own cutbacks. Two members of his staff have not been replaced. He is due to retire himself at the end of the year and he doesn't know if he will be replaced. "Our client numbers have been escalating in the last 18 months," he says. "In this area there would have been a lot of young people working but that's all gone. Now, some of them are being attracted to the dark side."

The Rialto project has been through bad times before. When it was set up in 1992, the drug culture was insidious.

"It was a time of extreme drug use, a lot of intimidation, all that," Mac Carthaigh says. "But we developed over time. We came at the problem from a community development angle. There were other problems during the Celtic Tiger years like cocaine use, but we were beginning to breathe again. It takes a while to turn things around but we were getting there. Now, we're back to where we were."

The link between disadvantage, drugs and crime is well established. Unemployment has reached into many communities, but the hopelessness that exercises a downward pull at the lower rungs of the socio-economic ladder is a powerful force. That so many manage to avoid being sucked into the mire says a lot for the strength of the human spirit. But prevailing conditions will always influence a minority destined for addiction and crime.

Some of the conditions in Dolphin House could be described as Dickensian. A survey earlier this year found that 77% of residents reported dampness in their homes, while 66% reported mould. Over three quarters had had problems with sewage. Waste water backing up into the bath in one of the flats was "highly polluted and had constituents which could be described as harmful to human health", according to a residents' group report to the Human Rights Commission last May.

In some ways, Dolphin House missed a ride on the Tiger. Fatima Mansions down the road completed a regeneration project two years ago in a scheme that now encompasses mixed housing of the highest quality, where once there were drug markets operating in the shadows of a crumbling complex.

The Mansions redevelopment was undertaken in a public-private partnership and is regarded as the optimum way forward. Social problems haven't gone away there, but they are much more manageable within a proper physical infrastructure.

Dolphin House was earmarked for a similar leap before the economy came crumbling down. The same fate has befallen St Michael's estate in Inchicore, and O'Devaney Gardens near the Phoenix Park, which were high-profile casualties of the travails suffered by developer Bernard McNamara.

Regeneration is now the only way forward for these communities. At a time when there is talk of stimulating the economy, the advantages of investment in places like Dolphin House are obvious.

Rory Hearne, who came to the area three years ago as a regeneration worker, thinks it's a no-brainer. Apart from the immediate work opportunities, regeneration would deliver a social dividend, squeezing out the bad stuff that festers when communities stagnate.

"In areas like this you had people working in trades who are now unemployed. They could be put to work if regeneration were to take off. The fear is that these are the places which are in danger of falling apart in times like these. We could go back to the 1980s and the drugs and crime that infested whole communities."

For now, survival is what it's all about. The budget looms like a verdict due from a hanging judge. The depletion of services can come about in different ways.

For instance, the funding for the services that make up the social economy comes from a whole variety of agencies – the HSE, Fás, charities, non-statutory agencies, and the departments of Environment, Health, Social Inclusion. Funding cuts can thus trickle down into a lost post here, the termination of a project there.

The whole edifice is thus constructed on separate building blocks, the removal of any of which could lead to structural problems, or even collapse.

If the social fabric in places like Dolphin House is tampered with further, the fallout will be first and foremost the quality and potential of lives. From senior citizens down to impressionable teenagers, these are people living on the frontline of the recession.