Councils in England are to learn later how much the funding they receive from central government will be cut over the next two years.

Similar to the spending review, opportunities should arise for various outsourcing partnerships as councils aim to save money by outsourcing some of their back office functions and share services.

The Localism Bill will lay the foundations for what David Cameron calls "the big society". The bill will also change the role that councils play in finding accommodation for the homeless.

Communities Secretary Eric Pickles said: "I believe it is possible to cut significant sums out of local authorities by simply improving the way local authorities operate.

“They've simply got to wake up to the fact that it is no longer viable to have their own chief executives, their own legal departments their own education departments, their own planning departments - they've simply got to put this together and they've got to look for ways to see these services provided in partnership with local communities.

“I'm expecting local authorities to be able to provide more for less, I'm expecting them to be able to provide a reasonable level of service and I think local authorities shouldn't have some kind of alibi in feeling that these have been imposed from the centre and therefore they've got to provide every single cut on the front line."