The heads of more than 130 charities have written to David Cameron, the Prime Minister, urging him to reconsider plans to insert a new clause in all grant agreements to prevent such funds from being used by charities to lobby government.
The Cabinet Office announced on Saturday that all government departments will be required to include a clause in all new or renewed grant agreements from 1 May spelling out that the funding cannot be used to fund activity intended to attempt to influence parliament, government or political parties.
The National Council for Voluntary Organisations said the move was "tantamount to making charities take a vow of silence", and Labour said it was "an outrageous attempt to further curb the independence of charities".
A joint letter sent to Downing Street yesterday by a range of charities and umbrella bodies says the proposals are "flawed in principle, for they may actually cost the taxpayer more money through limiting the range of insight that policymakers can draw upon".
The document, which is signed by the heads of charity umbrella bodies including Acevo, the NCVO, the Charity Finance Group and Navca, has also been signed by Campbell Robb, chief executive of Shelter, which was held up in the government’s press release at the weekend as an example of a charity that had been operating under the new rules in a pilot with the Department for Communities and Local Government.
The letter says that, in his first speech as leader of the Conservative Party, Cameron said he wanted to "set free the voluntary sector and social enterprises to deal with the linked problems that blight so many of our communities, of drug abuse, family breakdown, poor public space, chaotic home environments, high crime".
It says: "You have repeatedly reiterated your commitment to social justice, which depends upon building alliances of grass-roots organisations. To say to those organisations that government will work in partnership with them but, if they do, they will not be heard, is surely contrary to those commitments."
It says the plans are at odds with the Compact, the agreement that sets out how government and voluntary sector organisations should behave towards each other, and that government will "respect and uphold the independence of civil society organisations to deliver their mission, including their right to campaign, regardless of any relationship, financial or otherwise, which may exist".
It cites examples of government grant schemes such as a £5m grant fund announced in October as part of the government’s counter-extremism strategy.
The letter says: "As currently drafted, the new clause will undermine the ability of these charities to feed in valuable insights that may help government – those working on programmes receiving any grant funding would be prohibited from speaking to MPs about developments in their local area, suggesting improvements to policy or legislation, responding to your government’s own consultations, meeting ministers to discuss broader issues and evidence from their programme or even from giving evidence if called by a select committee."
The letter concludes: "We believe that a strong, effective working relationship between voluntary organisations and the state, based upon mutual respect and understanding, is beneficial to the people of this country and beyond.
"The ability of voluntary organisations to campaign, regardless of any financial relationship, is a defining characteristic of this relationship. Abandoning this protection is surely not the intended consequence of these proposals, as their impact runs contrary to the relationship you have sought to develop.
"As such, we urge you to reconsider them and work with the voluntary sector to find a constructive way forward."
Rob Wilson, the Minister for Civil Society, said: "We need proper checks and balances to ensure public money is not wasted on political lobbying.
"This clause has not to date and will not prevent charities or any of the other funded organisations from carrying out valuable work or making representations to government.
"Grant recipients are still free to engage in lobbying but should use other sources of funding unless it is specifically part of the terms of the grant."