Charities, community groups and local residents will be given control over parts of local authority budgets in nine local areas under a pilot scheme being run by the Big Society Network and the National Endowment for Science, Technology and the Arts.
Under the scheme, Your Local Budget, local councils will give control over budgets for areas, including highways, environmental services and healthcare, to groups of community organisations, charities and residents, who will be responsible for consulting as many local people and service users as possible before deciding how the money should be spent.
The projects will be overseen by the Big Society Network, the not-for-profit organisation co-founded by Lord Nat Wei, the government's big society adviser.
Oli Henman, who has been seconded from the National Council for Voluntary Organisations to run the project for the Big Society Network, said in some of the local areas, such as Tower Hamlets in London, the groups could control several millions of pounds.
He said that in other areas, such as a project in Herefordshire to devolve some budget control to parish level, the sums of money would be closer to £500.
"We chose these projects because they are diverse geographically and also in terms of scale," said Henman.
He added that the Big Society Network hoped the scheme would be extended in May 2011, once the current projects had been running for six months.
The areas taking part in the programme are:
* Norfolk County Council
* Stockport Metropolitan Borough Council
* Manton Community Alliance, Nottinghamshire
* Herefordshire Association of Local Councils
* Dulverton Town Council, Somerset
* Sheffield City Council
* Liverpool City Council
* London Borough of Tower Hamlets
* Royal Borough of Windsor & Maidenhead.