A new quango for voluntary sector loans and grants should be created by merging Capacitybuilders and Futurebuilders with the Big Lottery Fund, according to Stuart Etherington, chief executive of umbrella body the NCVO.
His call follows the suggestion by former cabinet minister David Blunkett last week that Capacitybuilders and Futurebuilders should be merged.
Etherington told Third Sector: "Blunkett spoke about protecting the BLF - I would go further than that. We need a new non-departmental public body to deliver loans and grants through one sector funder."
Stephen Bubb, chief executive of Acevo, said the merger would be a great advance that would cut bureaucracy: "But it is vital it is not a quango. We need the freedom to run the new body as an independent third sector body."
Kevin Curley, chief executive of local umbrella group Navca, said the three-way merger with the BLF would make grant applications simpler, but the business case for it should be examined.