Conservative leadership contender David Cameron has proposed giving voluntary organisations greater freedom from regulation in 'social action zones', which would be based on the commercial sector's enterprise zones.
"In the economic sphere, enterprise zones encourage business development by exempting firms from a whole range of taxes, charges and regulations," Cameron told the audience at the NCVO's annual Hinton lecture last week.
"We should do the same in the social arena, setting up social action zones where the sector can benefit from a lighter regulatory regime."
Cameron proposed that the third sector be granted more freedom by government in order to tackle what he called the "spiritual poverty" that characterises modern society.
He said the voluntary sector can bridge the divide between society's "sharp decline in respect" and the contradictory signs of "compassion and care", as witnessed during the Asian tsunami crisis and the Make Poverty History campaign.
"The voluntary sector offers a bridge between these two shores, linking society's problems with people's desire to do something worthwhile and of lasting value," Cameron said.
But he added: "Government must stop telling the sector what to do and trying to audit its every move."
The Conservative MP for Witney outlined four main priorities for government to help the sector achieve its full potential.
These included offering the sector greater freedom, introducing greater equality in the funding system, extending more trust to voluntary bodies and the awarding of longer-term contracts.
"Government needs to recognise when to let go," he said. "The public sector has to let the voluntary sector take wings and soar.
"Our record is lousy and yours is great - so you should be in charge."
Cameron raised concerns over the inequalities between private and voluntary sector providers when competing for government contracts. He pointed out that, whereas private sector firms were able to recover full costs, third sector organisations struggled.
"Bidders from the social sector have to disclose every last penny of their budgets, while public sector bidders have no equivalent requirement," he added.
He also said that government had to learn to see voluntary sector failures as "learning opportunities, and not always as evidence of incompetence or fraud".
See Editorial, page 22.