Enable councils to work in partnership with third sector, say charity finance chiefs

The government should enable councils to work in partnership with the charity sector, ensure there is a more consistent commissioning process and reduce the regulatory burden on the third sector, charity finance directors have urged.

In a submission to the Treasury’s comprehensive spending review, the Charity Finance Directors’ Group (CFDG) said: “Local authorities should be enabled and encouraged to work in partnership with the charity sector, rather than simply ‘turning off the tap’, transferring the bulk of spending cuts onto the services currently delivered by charities.”

The group argued that greater consistency in the commissioning process, allowing full cost recovery and removing some of the barriers to participating in public service delivery would help to level the playing field for charities in bidding for contracts.

Other key recommendations included:

• Longer-term contract periods should be provided wherever possible to enable services time to develop, deliver real value for money and produce real outcomes
• Accountability and transparency – incorporating effective cost-benefit analysis – should be applied to the cutting of services as it is with service procurement. This should also be reflected at a local level
• The regulatory burden for charities should be cut down. This replication of information and unnecessary governance and administration costs should be reduced
• Government departments should be aware of wider implications of public funding cuts on sector sustainability, community cohesion and service delivery
• The Big Society is undermined when projects which are already underway or have had initial funding for set-up costs are not continued. “This ultimately wastes resources and impacts negatively on communities,” the CFDG said
• The gift aid regime should simplified and updated
• The government should consider how the sector can be best supported in terms of the tax and regulatory environment it works in. “Charity trading regulations and the impact of VAT need to be addressed as burdens for the sector in seeking different sources of funding.”

The CFDG said charities have a significant part to play in bringing the government’s Big Society to life within communities.

Calling on the government to take into account the longer term impacts on the charity sector of any cuts, it added: “Furthermore, while the government has expressed that frontline services will be protected, there also needs to be recognition of the role that charities play in identifying local needs and in working with vulnerable and difficult to reach groups.”