Last month we wrote that small charities need more help and that government needs to put its money where its mouth is. Since then, the debate about who supports the voluntary sector (and who pays for that support) has moved on quite quickly, so we thought it was worth looking more closely at what government, central and local, is actually doing.
The national picture
When the Civil Society Covenant was launched in July 2025 we admitted to some scepticism, having seen plenty of compacts and covenants come and go over the last 40-odd years. To be fair, there has been progress. A Civil Society Council has been appointed to oversee implementation, a forum with the Treasury has been set up and DCMS has launched an £11.59m Local Covenant Partnerships Fund to help 15 areas of England agree local covenants. Some councils, such as Blackburn with Darwen, have formally endorsed their own.
But look at the numbers. £11.59m spread over three years across 15 places works out at roughly £250,000 per place per year. That money goes into partnership arrangements, not into the sector's capacity. Principles are good, but they don't pay for a volunteer centre, a trustee recruitment service or a development worker helping a tiny group write its first funding bid.
There is some good news on procurement. New Cabinet Office guidance tells commissioners that contract selection should not be "overly complex or burdensome" for voluntary organisations and recognises their "inherent social value". That's welcome, but it applies to central government contracts, and the higher social value weighting only applies above £5m. As we've said before, we don't think small charities should be trying to replace the state anyway, and the Charity Finance Group is right that contracts should cover the full cost of delivery.
Locally its worse
The LGA says councils face a £7bn funding gap by 2028/29, and changes to how funding is shared out are already prompting drastic proposals. Wandsworth, for example, has proposed suspending voluntary sector grants for four years. NAVCA's latest research found that 53% of local infrastructure funding is awarded for just one year. Nobody can build anything lasting on that.
Its different in Wales
The Covenant mostly applies in England. Wales has had a statutory Third Sector Scheme since 2014, a Third Sector Partnership Council and a funding code of practice that supports multi-year funding and full cost recovery. Crucially, the Welsh Government actually pays for infrastructure: almost £11m in 2025-26 for WCVA and the 19 county voluntary councils. It isn't perfect. When the new Deputy First Minister announced a review of the scheme this week, one Member of the Senedd described it as "a lot of warm words" with "remarkably few targets, deadlines or measurable outcomes". But in Wales infrastructure is treated as part of the system rather than an optional extra.
Can the sector help itself?
Back in England, the sector is starting to face up to its own future. NCVO, ACEVO, the Charity Finance Group and NAVCA have proposed an independent commission on the future of charity infrastructure. ACEVO's Jane Ide has said infrastructure bodies have no "God-given right to exist", and NCVO's Kate Lee has said it would be a win if NCVO no longer existed in five years, but the sector had an infrastructure system that worked.
We find that honesty refreshing, and we've long argued that mergers can be a great thing. But we have two worries. First, small charities often tell us that national infrastructure feels irrelevant to their needs, so the commission has to hear from the smallest and most local groups, not just the usual suspects. Second, a commission on how the sector reorganises itself could easily let government off the hook. The question isn't only which bodies survive, it's who pays. Public services benefit most from a strong local voluntary sector (particularly when it comes to prevention), so public bodies should help fund it.
What would we like to see?
A Covenant backed by money, including long-term funding for local infrastructure (England could learn a lot from Wales here).
New unitary authorities (if we get them) building voluntary sector support into their plans from the start, not treating it as the first discretionary budget to cut.
Something like the Welsh funding code in England, with multi-year, full-cost funding as the norm.
A genuinely independent commission that treats government as a funder, not a bystander.
In the meantime, our advice to small charities is the same as ever: don't wait. Join your local networks, work with your neighbours and be bold about the difference you make. That's the best case anyone can make for investment.
As ever, if you'd like to talk through what any of this means for your organisation, we'd love to help.
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Want to find out more? Contact us at julian@almondtreeconsulting.co.uk to discuss your organisation's needs.
