Sir Stuart Etherington, chief executive at NCVO, has urged local and central government to make radical changes to its commissioning of the voluntary sector, calling the current system "Neanderthal" and "crazy".

Speaking at the Rethinking Public Service Delivery conference this week, Sir Stuart said the current system of contracts with specific processes and outcomes meant public services stayed the same:

“If we want innovation and more localisation of services,” Sir Stuart said, “we have to accept a level of difference.”

Sir Stuart also said that European rules on commissioning needed to be reformed, after a delegate in the audience argued that councils were bound by European legislation which "forced them into defining outcomes".

Commenting on the future partnership between the voluntary sector and government departments, Sir Stuart said there would need to be a radical rethink of the relationship:

“Over the last ten years the voluntary sector and state funding doubled in size. The future will not be like this therefore we need a rethink of the relationship with local and central government which is our biggest funder.

“There will be a fundamental realignment of the state, market and civil society with a shift towards independence with citizens taking control of schools or running libraries.”

However, Sir Stuart warned that the rebalancing of the community and state would not happen automatically:

“We need infrastructure to allow communities to emerge as potential players,” Sir Stuart said. “Just sweeping away support is wrong. We can’t leave a vacuum.”

Sir Stuart also said the Compact would be tested under the current climate of spending cuts.