The third sector has a crucial role to play in shaping and delivering a "third generation" of public services tailored to and informed by their users, according to Prime Minister Gordon Brown.
The statement came in a major policy speech this morning on "smarter government" ahead of Wednesday's pre-Budget report.
Brown said performance data on public services would be made available online to help users and organisations make informed suggestions about how delivery could be improved.
He said increased transparency would also allow services to become more personalised and give front-line workers and voluntary organisations "the freedom to innovate and respond to new demands in new ways".
He said civic society would have a crucial role to play in the new arrangements because "social enterprises and mutual not-for-profit providers so often ensure that public services meet people's needs, especially those of hard-to-reach communities".
He reiterated the Government's intention to pilot social investment bonds, which would fund the third sector to provide services that saved the state money in the long term, such as programmes to reduce re-offending. He described the bonds as "money paid out now to deal at root with the causes, not the symptoms".
He also pledged to finalise plans for a social investment wholesale bank by the next Budget, but was unable to confirm how it would be funded. He said the intention was to use funds from the dormant assets scheme "subject to resources".
The Prime Minister told Third Sector: "The problem has always been not our willingness to do it but the ability to raise money from government and the private sector. But our determination is for it to go ahead."
The Government's policy statement to accompany the speech, Putting the frontline first: smarter Government, also says that:
- A regular "civic health index" will be produced from next March to look at issues such as civic engagement and volunteering, trust in public institutions and social cohesion;
- A pilot study is being carried out of a programme to minimise the amount government claws back from unused grants to community assets in order to give the organisations running them more finance for new projects;
- A drive to promote the wider use of community shares, which allow community organisations to raise capital by selling shares, will be launched early next year;
- Criteria will be developed by the next Budget to assess whether public services could be better delivered by cooperatives or third sector organisations.
Brown contrasted his proposals with Conservative Party leader David Cameron's vision of a smaller state complemented by "big society", set out in a speech last month.
Brown said: "Effective government action helping, for example, millions of carers, does not crowd out social responsibility. It helps to enrich and strengthen it, especially in the most hard-pressed communities."