HM Treasury

Public spending & reporting

Charity and Third Sector Finance

The Government is committed to creating a fair and enterprising society, and strongly supports the role that the third sector can play in building strong and vibrant communities, including through delivering public services and encouraging voluntary participation in the local community.

The third sector comprises non-governmental organisations which are value-driven and which principally reinvest their surpluses to further social, environmental or cultural objectives. It includes voluntary and community organisations, charities, faith groups, social enterprises, cooperatives and mutuals. The third sector is large and growing, particularly in the area of social enterprise, and plays an increasingly important role in both society and economy.

The Government has put in place a wide range of support to the sector, both through the tax system and through public spending on policy initiatives designed to build capacity and provide the sector with the means to help to provide public services. For example: the 1998 Compact set out the agreement between Government and the third sector on how best to work together; in 2000 the Getting Britain Giving package increased and enhanced the tax reliefs available on charitable gifts; the 2002 and 2004 Cross Cutting Reviews set out measures to give the third sector a stronger role in public service delivery, leading to increased public expenditure through initiatives such as Futurebuilders and Change Up; and the Government has promoted increased levels of volunteering through the 2005 Year of the Volunteer and support for the implementation of the Russell Commission recommendations. The Government has now undertaken the largest consultation it has ever done with the third sector to uniform future policy as part of the 2007 Comprehensive Spending review.

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