Finance: Government 'fails on cost recovery'

A survey by Sue Ryder Care has discovered that not one of the charity's statutory commissioners pays the full cost of the services they commission.

The survey is being published to coincide with the passing of the April deadline for the voluntary sector to achieve full cost recovery in contracting.

This deadline was set by the Treasury in 2002, but Sue Ryder says it is still subsidising the state to the tune of £7m a year.

"We continue to hear the same rhetorical messages from the Government," said Stephen Collinson, the charity's director of healthcare. "We've had two issues of the Compact code of practice as well as the Third Sector Taskforce - but on the ground there has been little real change in practice.

"We have serious concerns that, without a firm commitment from the Government to place the onus on local commissioners to change the way in which they contract with charities, increasing the sector's cap-acity to provide services in support of national health reform will be extremely difficult."

The charity said that donated income that could be used to pay for new care services in areas such as bereavement was being diverted to pay for the state's own shortfall.

In 2002, the Treasury's cross-cutting review of the role of the voluntary sector in public service delivery promised that charities would have attained full cost recovery by this year.

The Government has said that all departments now accept the principle.

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