Voluntary Sector

When he arrived at Number 10 in 1997, then prime minister Tony Blair had the reform of local government and the improvement of public services firmly in his sights. He believed they had failed the people most in need, those who New Labour termed ‘socially excluded’.

In the following years, the government pushed to improve the lot of society’s most disadvantaged by looking to the voluntary sector to begin providing public services on a broader scale.

Behind this drive is the belief that with its links to grassroots the sector has a better chance of identifying and providing what people need in a way public authorities, such as councils, cannot.

About half a million organisations ranging from those who operate with a handful of staff to the multi-million pound charities make up the voluntary and community sector. 

Its involvement in delivery of public services dates back to the 19th century, when services were provided mainly to alleviate ill-health and poverty.

But in 2002 the government published a Treasury Cross-Cutting Review setting out how it would equip the sector to deliver services on a much bigger scale backed by £193 million.

Opinion on the public service delivery agenda is divided among those in the sector. Some worry that it will be surrendering its much cherished independence and the ability to challenge government policies, as well as lose touch with people at the grassroots. Others believe it is ideally placed to deliver services and welcome the new financial security promised by contracts.

Treasury cross-cutting review

This document, published in 2002, outlined how the sector would be developed by 2006 to increase its ability to deliver public services.


Charities Bill

Introduced in the House of Lords in December 2004, this bill is broadly welcomed within the sector because many feel the 400-year-old charity law is in dire need of updating. Measures included in the bill are a new definition of charity and increased powers for the sector’s regulator The Charity Commission.

Big Lottery Fund

The New Opportunities Fund and Community Fund, which provided grants for the voluntary sector providing a broad range of services, were merged in June 2004 to form the Big Lottery Fund. Voluntary sector leaders warned beforehand that smaller groups whose activities did not complement government policies could lose out under the merger. Heavy criticism was leveled at the government when it announced the key themes for funding rounds before consultation on them had ended.

Facts and figures

There are 500,000 voluntary and community organisations

185,000 are charities registered with the Charity Commission

156 general charities

1 in 50 are paid employees

569,000 are paid staff

A quarter of the population volunteers once a month

Two thirds of the population gives once a month and the average donation is £12.93

Source: National Council for Voluntary Organisations


A £125 million pot of cash allocated by the government to help voluntary organisations become more sustainable. In February it awarded £4.2 million of the cash to 15 organisations. The Who Cares? Trust received £1.3 million, the largest award, to develop CareZone, a package of online services.


A programme to develop the capacity and infrastructure of the voluntary sector. It has around £80 million to distribute, which will be spent developing areas such as IT and governance. More than two years after the money was announced it still has not been distributed, much to the frustration of the sector.

The future

The National Audit Office is examining the 2002 Treasury cross-cutting review The Role of Voluntary and Community Sector in Service Delivery to see what progress has been made in implementing the recommendations by Spring 2005. It is looking at:

Departmental progress towards increasing the volume of work they fund through the voluntary and community sector

Progress in streamlining access and performance management requirements for multiple, often small, funding streams

Steps to improve the funding arrangements for the voluntary and community sector, including funding on the basis of full-cost recovery, moving away from payment in arrears and more stable funding arrangements where possible.

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