New practical guidance published by the National Audit Office aims to save charities and other voluntary and community organisations time and money by reducing the paperwork they are currently required to collect when providing public sector-commissioned services.

The guidance, published by the NAO along with the Office of the Third Sector (OTS) and the Treasury, will help government cut paperwork while still enabling it to monitor the £12 billion it gives to charities and other voluntary and community organisations each year.

OTS has also unveiled principles for the monitoring of funding for the third sector.

Charities that receive public funding have to account to government funders for how they have spent this money and should show the impact they have achieved with it.

The cost of producing this information, however, must be proportionate to the risks and benefits involved. Cutting unnecessary red tape can free up time and money that would be better spent focusing on the key services charities and others provide.

The term for achieving this balance and avoiding poor practice is ‘intelligent monitoring’.
The NAO guidance, Intelligent Monitoring, provides practical, step-by-step help for government funders.

Alongside this, the OTS has launched its Principles of proportionate monitoring and reporting.

The aim of the principles and guidance is to lessen the unnecessary burden of monitoring on charities, social enterprises and voluntary organisations and help them and departments gain better value from it.

The OTS’ principles commit Government departments to understanding the cost of reporting for third sector organisations and to working closely with them when establishing monitoring requirements.

The principles will apply to all new funding streams.

Rob Prideaux, director of Third Sector Value for Money studies at the NAO, said: “Government departments have a responsibility to make sure that public money is being spent properly. However, when monitoring goes from being a safeguard to a hindrance to those delivering services, often to the most disadvantaged in our society, it no longer provides value for money.

The aim of this practical guidance, which supports OTS’s new principles on monitoring, is to help Government, taxpayers, the third sector and service users to benefit from better and more reasonable monitoring of expenditure.”

Angela Smith, Minister for the Third Sector, added: “Across public services, we are sweeping aside the barriers that hold back the third sector’s potential to play a central role in modern public services that respond to the needs of individuals.

"The new monitoring principles and guidance will save charities, voluntary groups and social enterprises time and money that can be spent on doing more good for those who need support.

“Charities, voluntary groups and social enterprises have particular strengths like reaching out to the most disadvantaged people, taking risks and finding new innovative ways of doing things. This announcement is one step in a programme of reform to bring the third sector’s strengths into public services.”