Five local authorities have been chosen by the Treasury as 'pathfinder' councils to act as role models and improve Compact compliance across England.
Portsmouth City, Cumbria County, Tower Hamlets, Dorset County and Nottingham City councils have been selected as the best-performing councils to lead the way on full cost recovery and Compact matters.
The Pathfinders Scheme, which was unveiled in the Chancellor's Budget report in March, is designed to make the contractual relationship between local authorities and the voluntary sector more efficient and help charities deliver better services.
"The councils were chosen because they represent a range of different demographics and different circumstances under which services are being delivered with partner organisations," said Alex Holmes, spokesman for the Treasury.
Portsmouth City Council was chosen because of its initiatives, including a health development strategy that received input from all parties - statutory and voluntary - engaged in tackling health inequalities in the city.
"It is a recognition of best practice in the city and of the excellent working relationships between the council and the sector," said Fiona White, head of community involvement, empowerment and development at Portsmouth City Council. "It's a chance for us to showcase all we do well here in Portsmouth on the national stage."
The council carried out an in-house assessment of the shared priorities of the council and the voluntary sector. This revealed that the strategies it had in place were not being co-ordinated well enough with partner organisations. The council set up a brainstorming session with its voluntary and statutory partner organisations to establish how their approaches could change. It also conducted an audit of council and primary care trust senior managers to establish what their understanding of the issue was and how it could be improved.
The result was the establishment of the city's Health Improvement and Development Service, which has a workforce of more than 70 people and incorporates the council's teenage pregnancy team, adolescent health services and primary care trust and social services staff.
It is hoped the Pathfinder Scheme will help other councils and voluntary organisations to learn from such experiences.