Greg Clark, minister for decentralisation, has written to all council leaders asking them to reveal their voluntary sector spending.

The government will expect councils to publish all grants and payments, contracts and tenders made to civil society organisations (CSOs), he has said, calling for increased transparency to "highlight inefficiency" and "open up services locally".

The action will aid the plans outlined by the Localism Bill, which is currently at public committee stage, to allow CSOs to challenge existing contracts if they believe they could provide a better service.

"We want to open up new opportunities for the voluntary and community sector to participate in local life," he said.

"lf local small businesses and voluntary groups can understand how services are currently delivered they can better assess whether they might be able to put forward a credible bid to run them differently and deliver greater value for money."