Charity umbrella bodies have said they are "deeply disappointed" by a reply from Matthew Hancock, the Minister for the Cabinet Office, to a joint letter calling on the government to scrap the anti-lobbying clause.
The heads of more than 150 charities and sector bodies wrote to David Cameron, the Prime Minister, on 10 February urging him to reconsider plans to insert a new clause in all grant agreements from 1 May that will prevent such funds from being used by charities to lobby government.
A four-paragraph reply from Hancock, sent to Sir Stuart Etherington, chief executive of the National Council for Voluntary Organisations, on 30 March said the new clause was about ensuring government grant funding was spent as intended.
"Grant funding should not be diverted from its intended purpose to be used instead for campaigning and lobbying unless that is specifically authorised in the grant agreement," he wrote.
He said Cabinet Office guidance would help departments to implement best practice when drawing up grant agreements and insisted the clause was compatible with the Compact because "there is nothing in it to prevent grant recipients using their own resources for campaigning as they see fit".
He concluded by saying he valued the work that voluntary sector organisations did, and said that if any grant recipient had specific concerns about the clause, they should speak to their grant manager.
In a joint statement, Asheem Singh, director of public policy at the charity chief executives body Acevo, and Charlotte Ravenscroft, head of policy and public services at the NCVO, said Hancock’s response was "deeply disappointing" and failed to address the concerns raised by the original letter.
"Matthew Hancock talks of the paramount need for the efficient use of public money, but the result of the clause will be an increase in cost to government as services disappear and inappropriate policies remain in place for lack of sector advice to government," they said.
"It is a sad indictment of the government's position that Mr Hancock says that concerns can be addressed by individual charities talking to their grant managers.
"It is ironic that he suggests charities endeavour to resolve problems by discussing them with government, when the purpose of his clause is to deter charities from doing precisely that."