A service for young homeless people, with a turnover of less than £500 per year, was just one of the projects commended by the Prime Minister for their community-transforming power, in a special event at 10 Downing Street yesterday.

Colchester Nightstop was joined by representatives from Sunflower Garden, an Edinburgh project working with children affected by family drug abuse, The Big Buzz Club, which provides fun and constructive activities for young people in the deprived ward of Everton, and Hull Churches Home from Hospital, a comprehensive befriending service which helps people to move to independence after a stay in hospital. All four won Faithworks Awards earlier this year, in recognition of their excellence and effectiveness in serving their communities.

In a week where the relationship of church and government in delivering social welfare has been under the spotlight, the reception was an opportunity for Gordon Brown to thank Christian projects bringing lasting transformation to their communities.

"We're here to celebrate local projects that make such a difference, led by people of faith: changing the world, transforming communities and having an enormous ripple effect across the country," he said.

"What these projects are doing in their own communities is sending a message, not just in their communities but around the whole of Britain, that there's nothing wrong with Britain that can't be sorted out by what's right about Britain.

"I want to thank you for the tremendous contribution that you make to society. We're so proud of what you achieve for Britain."

The event also marked the launch of a Labour consultation with faith groups, entitled Believing for a Better Britain, run by the new Faiths' Taskforce, chaired by Alun Michael MP. It will be led by Malcolm Duncan, leader of the Faithworks Movement.

The consultation aims to hear first-hand the concerns of faith communities and those motivated by their beliefs, in order to reflect those concerns in the next manifesto. Duncan's lead role will ensure that the reporting remains independent.

"People of faith are making a vital contribution to the United Kingdom. It is impossible to talk about community cohesion, joined up service delivery or strong and sustainable partnerships without understanding this," said Malcolm Duncan.

"By acknowledging the distinctiveness of different faith groups, we are also able to harness their commonality."

Duncan said he would ensure that the listening process is "honest, open and accountable".

"As the Labour party listens more closely to people of faith and belief, my hope is that it will discover again the amazing contribution of people of faith and belief," he said.

Stephen Timms MP, Vice chair of the Labour Party with responsibility for faith, said: "This consultation gives us a tremendous opportunity to listen more closely to people whose starting point is faith.

"Far from being a narrow path of discourse, it opens a highway for Labour to listen and speak with those who are committed to making a collective difference in society and are determined to be a source of good.

"Under Malcolm Duncan's independent leadership, the consultation process will be a vital contributor to how Labour develops its policies and approach to working with people of faith."