Don Foster, a minister in the Department for Communities and Local Government, has written to every council in England urging them not to make disproportionate cuts to their voluntary sector budgets.
The letter says that Foster is disappointed in councils that "appear to see the sector as an easy target when it comes to making necessary savings".
He reminds councils that Best Value Statutory Guidance, which was published in 2011 and warns that local authorities should not make disproportionate cuts to the voluntary sector, is statutory and councils "must have regard to it".
Foster says councils should also ensure they follow the Compact, which sets out how public and voluntary sector organisations should treat each other.
"The best-value guidance published in September 2011 makes it clear that local authorities should be responsive to the benefits and needs of voluntary and community sector organisations of all sizes – honouring the commitments set out in local Compacts and not passing on larger reductions to the sector and small businesses as a whole than they take on themselves," the letter says.
Foster says that the proposed funding settlements for local authorities in 2013/14 are fair and that the government therefore "expects the same level of fairness to apply when councils come to agree voluntary and community sector budgets".
He says that some councils have been unable to provide sufficient information on their voluntary sector funding. "Transparency is the foundation of accountability and the taxpayer has a right to see how their money is spent locally," he says, adding that his department’s guidance on data transparency says that the level of voluntary sector grants for each local authority should be provided "as a minimum dataset".
Tom Elkins, manager of Compact Voice, which represents voluntary sector organisations on the Compact, said it was reassuring that Foster had reminded councils that they should do all they can to ensure spending data is collected, as well as making sure available information can be easily understood.
Compact Voice said it would continue to work with the DCLG and other government departments to ensure the government was held accountable on the Compact and that spending data was transparent and could be easily scrutinised.
The Panel on the Independence of the Voluntary Sector last month said there was widespread non-compliance with the Compact and best-value guidance by local and central government.