The government gave independent charities grants totalling just £480m out of a total grants budget of £147bn in the last financial year, an analysis of figures published on the data.gov.uk website reveals.

Figures for government grant-giving show that around £147bn was distributed in the form of a grant in the year to March 2014 – roughly a sixth of all central government spending.

However a Civil Society News analysis of these figures found that organisations in the charity and community sectors received only around £1.52bn. Of this, around £1.04bn went to charities which are also non-departmental public bodies or have other close links to government. Only £480m went to charities which are not linked to government.

By far the largest voluntary sector grant was £461m to the Arts Council, followed by £95m to the British Library, £44m to the Natural History Museum and £43m to the British Museum.

The largest grant to a wholly independent charity was £39m to the Canal and River Trust (pictured), although this was spun out of government quango British Waterways.

Victim Support received a £38m grant-in-aid, making it the largest recipient which has never been part of government.

The government lists private sector bodies as receiving 109 grants worth a total of £14.6bn – around nine times as much as the charity sector.

The government's own stated figure for voluntary sector grants is far higher than our analysis, at £5.78bn. However this figure includes funding for a number of organisations which are not actually part of the sector - particularly the Higher Education Funding Council for England, which received a grant worth £4.72bn.

DSC: 'Pathetically small'

Jay Kennedy, head of policy at the Directory of Social Change, which helps charities access grants, described the level of central government grant funding to charities as “pathetically small” but also unsurprising.

He said it was vitally important to do more to measure government data on grant-giving.

“We’ve known for a long time that there’s a move away from grants,” he said. “But central government says it wants to inspire more social action. If it’s going to do that it needs to think more creatively.

“We’re seeing all this money being poured into social impact bonds and social investment funds and payment by results. Why not just give people grants?”

Karl Wilding, director of public policy at NCVO, said that the figures suggested there was little truth to a recent narrative that the sector was too dependent on funding from government.

“It’s a bit like the narrative about the benefits culture,” he said. “People think most of the money spent on benefits goes to the unemployed. Actually it goes on pensions. In a similar way, people think charities receive a large chunk of government spending, but they make up a very small part of grant spending.

“Corporate welfare is often a very good idea – a lot of great innovations in the private sector have been grant-funded by the State. But the same holds true for charities. If you want innovation in the way you help people then grants are the way to do it.”

Primary research and additional reporting by Kirsty Weakley