A lot of charities are "really struggling with some of the more topical sorts of funding, such as the move to payment-by-results", said Carol Rudge, global head of not-for-profits at Grant Thornton.

Speaking at the Civil Society Question Time debate in Westminster yesterday Rudge said that payment by results "brings a lot of additional risks and a lot of additional concerns particularly around issues such as cash flow".

On the general climate for charities, Rudge said, "I don’t think I’ve ever been in such concerning times.

"The sorts of things I’m seeing at the moment that really worry me are charities having their funding suddenly cut with no prior notice and with no plans ready to address that are therefore just going under.

"What I’m trying to encourage my clients to get right is their governance because in these testing times you’ve got to have good solid governance in place. That’s all about having the right people meeting at the right times briefed with the right information so that the organisation can be ready to pick up these challenges," she said.

Watch Andrew Hind’s interview with Rudge here: