Angela Smith, the Minister for the Third Sector, has admitted she "regrets and apologises for" breaching the Compact, but insisted her decision to cancel a £750,000 fund for campaigning by small charities and divert the money into recession support was the right one.
Speaking during Cabinet Office questions in the House of Commons yesterday, Smith said she regretted any damage done by what she called an "isolated breach" of the Compact last month, when the Office of the Third Sector cancelled the Campaigning Research Programme despite funding having already been promised to 32 small campaigning organisations.
Smith reiterated her commitment to the Compact, which sets out how public and third sector organisations should treat each other. "It was a difficult decision to make, particularly because it was not Compact-complaint, which I regret and apologise for," she said.
But she said visits to voluntary organisations around the country that had been hit by the recession had convinced her that the money would be better employed if added to the £16.7m Hardship Fund.
Jenny Willott, the Liberal Democrat spokeswoman on the third sector, said during the debate that the decision to cancel the fund after offers of grants had already been sent out had "not only damaged the charities directly affected but also undermined the confidence of the sector as a whole in the Government's commitment to the Compact".
Nick Hurd, the Conservative spokesman on the third sector, said: "With this one decision the department that is meant to champion the sector has made a mockery of the Compact and send out a signal that it is all right for public grant-makers to treat charities in this shabby way."
Smith rejected a claim by Francis Maude, the shadow Cabinet secretary, that the volunteer brokerage scheme, which was launched earlier this year with the aim of providing 40,000 volunteering opportunities, had been a "flop", having so far created only 2,500 placements.
Smith admitted the scheme had been slow to start, but said it was too early to make assessments of success or failure. She said 930 people on Jobseekers Allowance had taken up places in August. "To me, that is important and successful," she said.