The Communities and Local Government department will open a consultation on the Localism Bill later this month or early next month, charities have been told.
The consultation will allow voluntary and community groups to respond to the bill's proposed 'right to challenge', under which they would be allowed to ask councils to let them deliver public services if they think they could do it better than the existing provider.
Daniel Fluskey, an advocacy officer at the National Council for Voluntary Organisations, said the department had told his organisation and other charities that there would be a consultation on the bill in the next few weeks.
The decentralisation minister, Greg Clark, told a meeting of the All Party Parliamentary Group on Civil Society (and Volunteering) yesterday that the bill would oblige councils to give "reasonable consideration" to proposals from voluntary groups wanting to deliver public services.
"If the case is reasonable and stands up, councils should have to look at it seriously," he said. "Often the voluntary sector can provide services that are better or more cost-effective than those currently being provided."
But Clark said it would be difficult for voluntary groups to challenge councils if there was already a contract for another organisation to provide the service.
"If you've got a contract for five years, you can't unpick that," he said. "But next time it's up for new tendering, community groups can say they would provide the service differently. The detail of the bill will refer to the circumstances in which groups can challenge for the right to deliver services."
Clark said the bill would help charities serving 'virtual communities' that crossed local authority boundaries.
"One of the strengths of the bill is that it will make life easier for charities serving virtual communities, such as people with disabilities," he said. "They might be able to challenge to provide services across bigger areas, especially if more councils merge their procurement teams."
Clark added: "I think there will be an infectious enthusiasm for this bill."