Local finance infrastructure needs more support to meet the needs of small charities, a report from the Charity Finance Group has concluded.

The report, which concentrates mainly on the state of small charity accountancy and support service providers, says there is a significant gap between the needs of small charities and the capacity of accountancy and support providers.

The report says that many small charity finance services will struggle to expand to meet growing demand for their services, and the number of accountancy and support service providers has fallen nationally.

There are also challenges in communicating which services are available to small charities and a lack of resources to help small providers keep up to date with developments in complex areas such as tax, the report says.

National bodies could do more, it adds, to meet the needs of these support providers, including promoting better collaboration between them.

The weakest areas for accountancy and support services highlighted in the report are the Midlands, the south east and London, whereas Yorkshire has the strongest area of provision.

The report also highlights skills-based volunteering, digital support and building communication channels to promote services to small charities as ways in which local infrastructure can be helped.

It says ocial investment could be used to help these organisations, recognising the impact they have on the sector while simultaneously realising that it will take time to grow successful business models.

Andrew O’Brien, head of policy and engagement at the CFG, said: “Local infrastructure bodies are the backbone of our sector, providing critical support that enables smaller charities to do their work. The past few years have been challenging for support providers, as it has been for the sector as a whole. But the importance of financial advice and support has never been greater, given the environment in which small charities are operating.

“There are a number of measures that can be taken to support these vital organisations, but it requires a partnership between providers, foundations and government. The CFG will continue to do what we can to help boost the support available to these organisations so that they can, in turn, help small charities to thrive.”

The report was produced as part of the CFG’s small charities programme, which has been supported by funding from the Esmée Fairbairn Foundation.