The system used to allocate funds to the voluntary and community sector could be reformed under proposals outlined in a report published on Wednesday.

Last year, the government awarded £48 million to organisations, a large portion of which was donated to health-related services.

Of the 31 recommendations made in the study by the Section 64 Review Group, 30 have been adopted by the Department of Health while the remaining one is still under discussion.

These include the introduction of a two-stage application process, allowing bodies to offer detailed bids only after their first application has been accepted.

More detailed information would be given for rejecting a bid, with the initial rejection sent within four weeks of receiving an application.

"We value our partnership with the voluntary and community sector, this report demonstrates our resolve to improve the way grants are awarded and this indicates our commitment to recommendations in the review," said health minister Dr Stephen Ladyman.

"This new arrangement will pave the way for a closer partnership between the department and the voluntary and community sector, which will help improve support for the many people who depend on the valuable contribution that the sector makes to health and social care in England."