The Government, local government and key voluntary and community sector national bodies have committed to the principles of FCR.

FCR improves transparency and working relationships between funders and voluntary and community organisations, and also tackles concerns around ‘double funding’ – where funders suspect they might be paying for an overhead cost that is already being paid for by another funder. In other words, they might suspect that the organisation is getting paid twice.

The Compact, which is a framework for relations between the Government and the third sector, sets out the need for FCR in its Funding & Procurement Code of Good Practice.

Since the Government launched a renewed drive to encourage voluntary and community organisations to bid for services, it has made FCR a priority. The Treasury first backed FCR in its spending review in 2002 and issued funding guidance in 2006. FCR has also been supported by recommendations in the Gershon Efficiency Review in 2004.