A government programme to boost community involvement in local decisions is proving effective, parliament's financial watchdog has reported.

The National Audit Office said the community programme, overseen by the Office of the Deputy Prime Minister, was leading to greater involvement of deprived communities in local decisions.

But NAO chief Sir John Bourn said that more needs to be done to reach all sectors and groups.

The community programme covers England’s 88 most deprived local authority districts, with funding of £182 million between 2001 and 2006.

The study concluded that "simple and straightforward grant application procedures" had helped around 25,000 self-help and community group projects in England's most deprived neighbourhoods.

"After a slow start, community empowerment networks have begun to establish themselves and are exerting influence by establishing links with service providers at a neighbourhood level," said the watchdog.

The report also noted that in some areas "tensions remain between community members and public sector members of  local strategic partnerships".

"This has been caused in part because many community empowerment networks were not established in time to influence neighbourhood strategies and the allocation of the neighbourhood renewal fund.

"The tensions are reducing as opportunities increase for community empowerment networks to work alongside local democratic structures."

There was also a warning that most groups hear about the grants through word of mouth, which favours groups that are already well-connected.

"Many community groups feel poorly informed about the reasons to reject grant applications and about how community representatives are chosen to serve on local strategic partnerships," added the report.

Sir John said the findings were "encouraging".

"My report identifies a number of issues that need to be addressed to improve the effectiveness of the programme," he added.