An estimated 70% of council income will now be raised locally compared to 56% under the centrally-distributed "begging-bowl" Formula Grant system, according to the Communities and Local Government Department (DCLG).
From April 2013, councils can channel this greater local control into encouraging local jobs and local firms via a new business rate retention incentive that rewards them for growth. It could potentially add £10 billion to the economy by 2020.
The DCLG also published 50 examples of where it believed councils could save money, ranging from opening a coffee shop in libraries to scrapping the post of chief executive.
Councils must keep doing their bit to tackle the inherited budget deficit because they account for a quarter of all public spending and still get through over £114 billion of taxpayers' money each year.
More top news
Liverpool edged an epic penalty shootout to beat Middlesbrough and progress to the fourth round of the Capital One Cup.
The world famous musical, which has been running on Broadway since 1997, has broken records earning more than £2.8 billion.
There will be wet weather around tonight with rain drifting from north to south which will lead to scattered showers tomorrow morning.