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
Newt Gingrich accused Fox News anchor Megyn Kelly of being 'fascinated with sex' over coverage of Trump's alleged inappropriate behaviour.
The Republican presidential candidate said Mrs Clinton "doesn't know what she's doing" in her plans for Syria.
Court records show Len Wiseman filed divorce papers on Friday citing citing irreconcilable differences.