Compact Week: New code covers contracts

Full-cost recovery, longer term funding and responsibility for risk are the main new subjects covered in a revised code on government funding and contracts.

The code is being published to coincide with Compact Week, which is intended to boost knowledge and the use of the agreements which regulate relations between the voluntary sector and government.

The week runs until Sunday and involves the launch of a new Compact logo and website and events round the country. Umbrella body the NCVO is urging people to "do one thing to promote or learn more about the Compact in Compact Week".

The revised funding code, the most important of the five codes which form part of the national Compact, is the result of a year of painstaking negotiations in Whitehall.

Richard Hebditch, project manager at the Compact secretariat, said there had been slow progress in reaching agreement because grants and contracts were "the issues government really cares about and the sector has most interest in". He said the document had been completely rewritten. "It sets out a vision of the benefits to the sector and the benefits to the Government, recognises that these are not the same, and says what both sides need to do to make it work," he said.

He said the new document was of fundamental importance because the changing relationship between government and the voluntary sector meant that government was now the biggest source of the sector's funding.

This made it vital to have a relationship which protected the independence of the sector, Hebditch said, partly because government benefited from that independence and public trust when the sector delivered public services.

Asked if people in government understood that argument, he said: "I think some people understand, at policy level - I think the ministers, Fiona Mactaggart and Paul Boateng, understand.

"But I think at operational level, those dealing with the sector on the ground don't always understand how important that question is. Getting the Compact over to them is very important, and this new publication should help."

An earlier version of the code covered only grants, but the Treasury's Cross-cutting Review of 2002 prompted the revision by saying that it should cover contracts as well.

On full-cost recovery, the code says voluntary organisations should allocate overhead costs specifically rather than setting a standard percentage.

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