David Cameron has promised “further steps” to support charities and social enterprises bidding for public sector contracts, in a letter to Sir Stephen Bubb, chief executive of Acevo.

Cameron also said that a Local Sustainability Fund, announced earlier this month by the Cabinet Office and potentially worth £40m to the sector, is likely to include funding to help charities win public sector contracts.

“I recognise that some charities and social enterprises face challenges in bidding for contracts or working with the private sector,” he said in the letter. “Over the coming months we will take further steps to support these organisations."

He said the development of the Local Sustainability Fund is at an early stage, “however it is likely that support available will include, where appropriate, enabling beneficiaries to build the capability and infrastructure necessary to take advantage of new opportunities to deliver public services”.

Cameron’s letter was in response to a letter from Bubb, sent on 13 February, which argued that public services reform isn’t working for citizens or for the voluntary sector.

The Office for Civil Society will consult on the scope of the new Local Sustainability Fund for 12 weeks, starting in April.