Charities face a growing threat to their independence, according to the first of five annual assessments by the Panel on the Independence of the Voluntary Sector.
The panel, which was established last year with £99,000 from the Baring Foundation, identified charities’ growing dependence on statutory funding as the main source of concern.
According to the report, published today, there are worries about the move from grants to contracts and the "unnecessarily restrictive" terms of many contracts that tend to favour large, private firms.
Dame Anne Owers, chair of the panel, said in the foreword to the 32-page report that there were "real and present risks" to independence of voice, purpose and action that needed addressing.
"Statutory funding, and the way that public services are commissioned, is the source of much current concern," she said.
The report said there were indirect and sometimes direct pressure towards self-censorship by charities. It also raised fears about the blurring of boundaries between sectors and the dangers of boards becoming more business-minded without giving due concern to independence. Cuts, the report said, were compounding problems.
Owers, who is chair of Christian Aid and a former chief inspector of prisons, said 2012 would be crucial because it presented opportunities to strengthen safeguards to independence, such as the review of the Charities Act 2006 and the chance to embed social value in contract terms.
She said governments of all political parties had stressed the voluntary sector’s importance but there needed to be "more than a soft, unfocused admiration for a big society or third sector".
Owers added: "Central and local government and private sector partners have to recognise the sector’s hard edge: its independence, distinctiveness and ability to speak out from experience.
"If the voluntary sector is perceived to be simply the delivery arm of the statutory or private sector, or appears indistinguishable from either, it will lose the public trust on which it depends for volunteers, donations and tax benefits. Everyone will be poorer."
The panel, whose members include sector luminaries Nicholas Deakin, Andrew Hind and Sir Bert Massie, also looked specifically at the Department for Work and Pensions’ Work Programme.
It said the programme’s commissioning arrangements appeared to have had "an implicit bias" against the voluntary sector, such as the complexity and cost of the process.
The report said these barriers had forced many charities to operate as subcontractors, "but this has not been an entirely positive experience" due to factors such as low referral levels and the transfer of risk down the supply chain.
More than 50 organisations and individuals contributed to the study. Not one large national charity submitted a response.
The report says this might have been because "independence has slipped down their order of priorities" and that talking to large service-providing charities would be a key part of the panel’s work this year.