Parliamentary
Government support for full cost recovery
“The Government remains committed to the principle of full cost recovery”
HM Treasury, 2007, ‘The future role of the third sector in economic and social regeneration’
“There is no reason why service procurers should disallow the inclusion of relevant overhead costs in bids. Furthermore, funders or purchasers should not flatly reject or refuse to fund fully costed bids. Funding bodies must recognise that it is legitimate for third sector organisations to recover the appropriate level of overhead costs associated with the provision of a particular service.”
HM Treasury 2006, Improving Financial Relationships with the Third Sector: Guidance to Funders and Purchasers
“Councils support moving to full cost recovery as quickly as possible, and propose that all councils should routinely address three-year contracts to allow the voluntary and community sector to plan ahead. Procurement practices should be reviewed to ensure they are proportionate to the type and size of contract.”
Sandy Bruce-Lockhart, Chairman of the Local Government Association (Speech on 22nd June 2006)
"Trustees have a duty to use charity assets as effectively as possible. Charities should always aim to recover the full cost of delivering services for public authorities, including administrative and overhead or "core" costs. It is reasonable for a charity to expect an authority to fund its full costs. Full cost recovery is supported by government policy, as set out in the Compact and its good practice code on funding and procurement. We recognise that, in practice, many charities struggle to obtain full cost recovery. This is a matter of concern for both the sector and the Commission. ACEVO's full cost recovery model can help charities to allocate core costs compatibly with public sector finance rules."
Charity Commission, Policy Statement on Charities and Public Service Delivery, 2005
"A strong, thriving voluntary sector cannot live hand to mouth. That is why the government is promoting full cost recovery, enabling organisations to recover the legitimate portion of overhead costs for the work they do. Government practice itself is already improving. I welcome acevo and New Philanthropy Capital's toolkit, which will enable voluntary organisations to understand their costs and help them to negotiate with funders. It recognises that getting the relationship right is the sector's concern as much as the government's. Together we are beginning to make a real change that is boosting the sustainability and independence of voluntary organisations."
Fiona Mactaggart MP, Minister for the Voluntary Sector, 2004
"It is the Government's view that it is completely legitimate for service providers to factor-in the relevant proportion of overhead costs into their cost estimates for services delivered under contracts. We in Government will continue to work hard toward changing public funding practices and, in turn, the sector needs to allocate their costs on an accurate, fair and transparent basis to ensure proper accountability for the use of public money. I therefore commend this new guidance to third sector organisations as an important tool in helping to meet this challenge."
John Healey MP, Economic Secretary to the Treasury, 2004
“Funders should recognise that it is legitimate for providers to include the relevant element of overheads in their cost estimates for providing a given service under service agreement or contract.”
HM Treasury, The Role of the Voluntary Sector in Service Delivery - A Cross Cutting Review 2002
