Sir Stephen Bubb, chief executive of Acevo, told a select committee meeting yesterday that grants were "problematic" for the sector and that contracts were preferable.
The position puts Acevo directly at odds with Navca's take on the subject, as the CVS umbrella body has long argued that grants are vital for the sector.
Sir Stephen had been invited to speak at the Public Administration Select Committee (PASC) inquiry into the Big Society, after he had asked MPs for a session to address the criticisms made towards the voluntary sector at a meeting earlier this year.
The meeting, in January, saw charity representatives Sir Stuart Etherington, chief executive of NCVO, and Thomas Hughes-Hallett, chief executive of Marie Curie Cancer Care, forced to defend the sector’s right to campaign and charity chief executives' salaries.
In the PASC session yesterday, Sir Stephen defended charities' involvement in public service delivery, after PASC chair Bernard Jenkins MP accused some charities of being too dependent on public funding.
Sir Stephen argued that charities had delivered public services for centuries:
“It has been agreed that the role of the state is to provide free universal services and pay for them,” he said. “But they don’t necessarily have to be delivered by the state.”
He did, however, say that charities needed to ensure a diversity of funding, and said grants were sometimes "problematic":
“At least with a contract you have set an established relationship with duties on both sides,” he said. “Grants are a form of patronage.”
Sir Stephen also attempted to convince the committee of the sector's right to campaign, highlighting Shelter as an example.
“Shelter can be a right pain at times,” he said. “But the strength of its model is that through service delivery it becomes aware of the problems facing homeless people and can bring this to the table of government when discussing policy.”
In response, Conservative MP Robert Halfon argued that Shelter had issued press releases attacking government:
“When the Taxpayers Alliance do it, it is wrong,” he said. “So what is the difference?”
Sir Stephen said that the role for charities in campaigning was “crucial”:
“Charities can’t deliver services for a managerial case,” he explained. “Charities want a better place for beneficiaries.”
He continued: “Shelter is not aligned to a particular political party, like the Taxpayers Alliance.”