This section looks at the impact of Treasury and other funding rules and guidelines. These apply to all funding from government, whether central government departments or local government, and includes the NHS.

Charities and voluntary organisations receive significant amounts of funding from many different parts of government and so it is not surprising that there are some problems with funding arrangements. However, some of these problems were highlighted in a Treasury report 2002 as obstacles to greater use of the voluntary sector to deliver public services. Since then, there have been a number of initiatives to improve the funding arrangements. One of these is guidance for funders produced by the Treasury in 2006 to clarify what the Treasury rules are, as they found that these were being cited inaccurately as the basis for certain practices by funders. Good practice is also supported by the Compact, an agreement backed up by codes for areas such as funding.

In particular, the terms of funding relating to finance that often cause problems are:

• The timing of payments
• The basis of funding - is it fair if this is based on outputs?
• Any requirements to spend the funding in a particular timescale
• The right of clawback
• The reporting requirements and the right of audit