Eric Pickles says he wants to take decisions out of the hands of councils and Whitehall Councils in England are to learn later how much the funding they receive from central government will be cut over the next two years.
Many are expecting a substantial reduction amid the spending review.
Ministers will also reveal their proposals to give groups in local communities greater scope to take over control of some services from councils.
They say the Localism Bill will lay the foundations for what David Cameron calls “the big society”.
The bill also proposes a change in the role that councils play in finding accommodation for homeless families.
Instead of being obliged to house families who are eligible, councils would be able to discharge their responsibilities by finding them private rented accommodation for at least 12 months.
Communities Secretary Eric Pickles said the bill would give local people power in three ways.
The first would involve them taking ownership of community buildings such as redundant pubs, redundant shops, redundant post offices and school buildings.
“Under existing legislation they can do that, we are just making it easier for them,” he explained.
“The second thing that neighbourhoods can do is if they think they can run a local service better, they will have a right to be able to bid for that service.
“And the third thing is that we are going to introduce neighbourhood planning similar to what exists in Germany, so that neighbourhoods can determine the look and the shape of their communities, and once they’ve done that, providing a person wants to put something up in accordance with that plan, they won’t require additional planning permission.”
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