Councils should make best use of the voluntary sector's ability to deliver effective and innovative local services when managing future budgets, decentralisation minister Greg Clark said in a speech last week to local authority chief executives.

Clark said there was an even greater need for the diversity, innovation and cost savings that voluntary and community groups can offer in a tougher economic climate, and councils should look for opportunities to strengthen ties with the sector.

Praising the contribution of the voluntary sector to education, tackling worklessness, the environment and social care, Clark said voluntary and community groups should have the right to challenge councils to offer a better alternative if they can do things better or more cost effectively.

The upcoming Localism Bill will entrench the right for communities to challenge the status quo and open up opportunities for new ways to do things differently.

Clark said the government expects local authorities to devolve and empower people and to maintain strong links with the voluntary sector over the coming months.

He stressed that central government wasn't giving power to councils to then see it recentralised locally through a monopoly of local public services with voluntary and community groups - including charities, social enterprises, co-ops and housing trusts - pushed out.

Speaking at the SOLACE conference, Clark said:
"The spending review will inevitably present councils with some tough choices in the town hall, but councils must resist any temptation to pull the drawbridge up on the voluntary sector. We expect councils to devolve and empower people and maintain strong links with voluntary and community groups.

"Right now in a tight economic climate there is a greater need for the diversity and innovation voluntary and community groups can offer. Reinforcing monopolies of local services by retrenching into the town hall is not the way forward. Opening up more of councils' budgets to have it carried out by voluntary organisations can improve effectiveness, increase resilience and save costs."

Clark made it clear that the government's mission to decentralise would introduce the idea of contestability - the right for communities to challenge councils to consider new ways of working.

The upcoming Localism Bill will include this new right, giving communities greater freedom to implement their innovations, spawning imitations in other neighbourhoods when they work and sharing lessons when they don't.