The government has unveiled plans to harness the voluntary sector to deliver £125 million into Britain's communities.

Launching a consultation on the "futurebuilders fund", the Treasury said it wanted to work with community-based initiatives to deliver local projects in areas such as health, social care and tackling crime.

Following discussions between ministers and the voluntary and community sector the government is pressing for a move from grant funding to longer term investment.

The Treasury says those working in the sector have warned that a lack of access to capital for future development is hampering their ability to deliver long-term projects.

The document also argues for a broader range of finance to include loans, loan guarantees or a mix of these with grants. Ministers also want to encourage organisations to join with others to make the most of other funding streams.

Paul Boateng, the chief secretary to the Treasury, said: "The role of voluntary and community organisations and social enterprises is central to this government's commitment to delivering world class public services.

"Over the last six years, real strides have been made to strengthen the partnership between government and the sector in achieving our shared vision.

"But there is a lot more to do to ensure that this partnership works to the best effect.

"This new futurebuilders fund will support strategic investment to enable the sector to realise its own ambitions in providing the best services to its users."