The Treasury's 2002 Cross Cutting Review stated that all statutory funders should recognise a legitimate proportion of a service provider’s overheads by implementing a policy of FCR by April 2006. Out of 151 of the organisation’s members interviewed, 97% felt that this deadline would be missed, leading them to question the government’s commitment to the sector.

“The government set this deadline but frankly our members don't believe it will be achieved,” said Stephen Bubb, chief executive of acevo. “They are asking: ‘what’s the point of the government making promises if it won’t keep them?’ I am saying to government: let’s work together on an action plan to make sure we deliver on FCR.”

In an attempt to hold the government to account over this issue, acevo has launched a campaign which it hopes will raise awareness of the importance of FCR. It says that without it, the quality and sustainability of the third sector’s work will be impeded. It is calling on the sector organisations to not only adopt an internal strategy of FCR, but also to share best practice with others.

The survey also highlighted how charitable and voluntary organisations feel that the Compact is still not understood or acknowledged by local authorities, many of which say they cannot afford to cover core costs.

To help the sector implement FCR, acevo and NACVS are to launch a three year education and training programme, funded by the Big Lottery Fund and aimed at infrastructure organisations operating at sub-regional and local levels.

Kevin Curley, chief executive of NACVS, said: “All CVS and local infrastructure organisations should ensure that they understand the principles of full cost recovery and can advise front line organisations on how to implement them.”

For more information visit www.fullcostrecovery.org.uk