Speaking to around 290 councillors at the Conservative local government conference in London last weekend, Mr Norman, who replaced John Redwood in William Hague's surprise reshuffle, also said the Tories would not cap high spending councils.
'We are opening the door to a rethink about local government financing . . . The question now is how much further we can go: how far can we make the relationship between local spending and local taxation more direct?' he said.
Under Tory proposals to devolve education spending to schools, council tax and business rates could fund up to 85% of local expenditure.
He said government proposals for political restructuring were 'ill thought through', and the Tories wanted to see reform piloted in a small number of areas before it was imposed nationwide.
A cabinet-style government could create a 'cabal of permanent politicians out of touch with the world of work', he warned, stopping councils from representing a broad range of public opinion.
To achieve greater representation the Tories would look critically at the amount councillors were paid and examine the possibility of more evening meetings to encourage those with outside interests to become more active.
'The Conservative vision is one of decentralisation, freer councils, less red tape, openness and accountability,' Mr Norman said.
He also attacked regional development agencies for 'costing the taxpayer an extra£50m a year in administration. And we all know they are the precursor to regional government and the abolition of county councils'.
Deputy prime minister John Prescott had challenged Mr Norman to make his position on RDAs clear, and accused him of dodging questions about their future under a Tory administration.
But Mr Norman's speech appears to put him in line with the Tory policy of abolishing the eight RDAs.