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Third Sector Organisations

The Office of the Third Sector in the Cabinet Office leads on third sector issues for Government, and is conducting a Third Sector Review, in partnership with HM Treasury's Charity and Third Sector Finance Unit. OGC is working closely with the lead department to provide advice and guidance on issues relating to the participation of third sector organisations (including voluntary and community organisations and social enterprises) in the Government marketplace, in line with European Union procurement rules and domestic value for money policy.

The term 'Third Sector' is used to describe a range of institutions, which occupy the space between the State and private sector. Third sector organisations share common characteristics in the social, environmental or cultural objectives they pursue; their independence from government; and in the reinvestment of surpluses for those same objectives.

The Third Sector is well placed to deliver key public services because of its resourcefulness, community links, specialist knowledge, and the passion it has for its agenda. However barriers, such as public sector funding practices, can prevent the sector from fully engaging in public service delivery. As a result, Government is keen to support the sector to overcome these barriers as well as promote the sector and what it has to offer.

Sir Peter Gershon's report 'Releasing Resources to the Frontline' outlined recommendations for Government to improve its funding relationship with the Sector. These related to longer-term funding, balance of risk between funder and Third Sector organisation, full cost recovery and rationalisation of monitoring and reporting requirements. OGC is contributing the outcomes of the Third Sector Local Area Pathfinder Project as part of a cross-Whitehall team to identify common problems that exist in local commissioning and procurement chains, and identify solutions that could be implemented. The Pathfinder Team is working with five local authorities to assist them in achieving four objectives:

  • Commit to full implementation of Compact (funding and procurement code of good practice) principles
  • Evaluate the support needed to build the capacity of local third sector organisations
  • Realise the potential for enhanced public service provision by the sector
  • Test and implement a mechanism through which they can monitor their spend on public services delivered through the third sector

OGC has collaborated with other Government departments to produce the following guidance:

OGC/Home Office 'Think Smart _ Think Voluntary Sector' (PDF, External)
HM Treasury's 'Guidance to Funders'
National Audit Office Decision Support Tool

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