The public service contracting system is often too focused on the convenience of commissioners and must be fixed, according to Paul Streets, chief executive of the Lloyds Bank Foundation.
Speaking at the launch of the grant-making charity’s report The Value of Small in Westminster last night, he also warned that the government needed to make more of an effort to listen to small charities.
"We need government to get it and not get in the way, and to look at how protracted commissioning is," Streets said.
He said it was good that government seemed to be recognising that grants should have a role in funding and procuring services.
But he added: "We need them to recognise that commissioning isn’t working for the people it’s intended for – it needs to be fixed."
He said he believed that Tracey Crouch, the charities minister, and Matt Hancock, the Secretary of State for Digital, Culture, Media and Sport, did understand the value and importance of small charities.
But he said the enthusiasm shown by Crouch and the DCMS about the work of small charities needed to be communicated with other departments in order to affect their work.
This enthusiasm should be reflected in "the next work programme, in the next big government initiative, so that it is designed for the people it is for and the charities who deliver it, not for the convenience of commissioners as so many of these programmes are", Streets said.
He added: "We want them to recognise that charities are canaries in society’s mine, and we want them to sing much more loudly, and not through gags, frankly."
The Value of Small concluded that small charities often struggled to measure and explain their impact to funders, making the "song" difficult to listen to, but this made it all the more important to pay attention, Streets said.
And he called on government to increase the amount of money given to small charities from dormant assets.
Crouch was initially due to attend the launch event, but was required in the House of Commons to vote on the government’s Brexit bill.
In a pre-recorded video message played at the event, she said: "Government clearly has an important role in supporting small charities to fulfil their potential. This is a key element we will be looking at as part of our upcoming civil society strategy, which we will publish soon."