Decentralisation minister Greg Clark has told councils to publish their spending on the voluntary and community sector.
In a letter to council leaders, he said details of all grants and payments, and copies of contracts and tenders, should be made public to improve accountability.
Mr Clark said this could open new markets for voluntary and community groups by allowing them assess whether they could submit a credible bid to run services differently and deliver greater value for money; the Localism Bill would allow them to challenge for the right to do this.
He wrote: “Many councils are strengthening their ties with the voluntary and community sector because they recognise the vital role they can play in delivering high quality front line services.
“Often voluntary and community groups offer good value for taxpayers’ money when commissioned to provide services.
“By requiring all councils to openly publish their grants and payments under contracts and increasing transparency on local spending, we want to open up new opportunities for the voluntary and community sector to participate in local life.”