He said deputy prime minister John Prescott would step in if councils failed to deliver an adequate supply of new housing or if planning authorities failed to prepare proper plans.
He was also prepared to call in major housing developments, as well as consider the case for binding local plans, which he said would 'increase certainty and ensure the stability of the housing market'.
The measures are likely to upset many in local government, who will consider them an extension of Whitehall control.
Mr Brown said that from April 2005, councils would receive positive benefits
if they succeeded in encouraging new businesses.
Instead of rateable income flowing straight to the Treasury, the receipts from new business creation would be shared 'to the benefit of local citizens'.
There would also be an effort to transfer more than 20,000 public sector jobs out of London to the nations and regions.
He has asked Sir Michael Lyons, director of the Institute of Local Government Studies, to advise on decisions on relocation in time for the 2005 comprehensive spending review.
The chancellor confirmed the high spending levels announced in last summer's three-year comprehensive spending review, meaning an extra £61bn a year for public services by 2006.
* See LGCnetfor Mr Brown's Budget Statement along with full details and reaction.