A new code of practice designed to make local authority contracts more accessible to small and medium-sized businesses is to apply to charities as well.
The Office of the Deputy Prime Minister is urging all local councils to sign up to the Small Business Friendly Concordat.
Ministers have said that voluntary and community organisations should also be covered by its provisions.
The Concordat tells councils to publish their procurement strategies, provide better access to contract opportunities, ensure a fair tendering process and pay contractors no more than 30 days after receipt of their invoices.
"The Concordat is an important element in achieving our ambition for all councils to deliver world-class services," said local government minister Phil Hope. "This will contribute to the development of prosperous local economies and communities."