Children England has made a series of policy suggestions it hopes will trigger debate about the role of civil society organisations.
In its report, Perfect Storms: an analysis of the operating conditions for the children, young people and families voluntary sector, the membership body for children’s charities calls on the government to modernise and simplify Gift Aid.
It also says that statutory force should be given to the expectations in Best Value Statutory Guidance, published by the Communities and Local Government department last year, and says local authorities should avoid passing on "disproportionate" cuts to voluntary and community sector organisations.
A spokesman for Children England said the aim of the report was to develop an understanding among policymakers of the cumulative impact of the financial crisis and subsequent austerity measures on children’s charities and their statutory partners.
It is based on interviews with more than 50 voluntary and community sector leaders and staff from local authority children’s services departments, and on feedback from Children England’s regional and national networks.
The report recommends that central government should try to finalise the local government finance settlement earlier in the year.
It questions whether the changing relationship between charities and government is healthy or sustainable. It says the transfer of social and financial risk from government to charities, fragmentation of public services and loss of workforce skills is damaging for both organisations and the people they support.
The report examines the viability of the government’s big society agenda as voluntary sector organisations struggle with reduced income, increased demand and higher costs. It says that similar strains on local statutory children’s social services, where funding for early intervention services has been reduced, is placing further pressure on already stretched charity and public sector resources.
Maggie Jones, chief executive of Children England, said she hoped the report would act as a catalyst for discussion.
"The report highlights the extremely precarious position that many charities and local areas find themselves in", she said.
"While individual financial and social pressures are damaging, Perfect Storms shows that the cumulative impact of these factors is often worse than the sum of its parts.
"We appreciate the government’s commitment to more open public service markets within which the voluntary sector can thrive, but the way this is playing out both in localities and large national contracts isn’t currently working for any of the stakeholders.
"Identifying solutions requires an understanding of the complex dynamics at work. We hope that this report, by providing that analysis, can act as a catalyst for discussion and a basis for a more nuanced debate about the inter-relationships between charities and state."