The New Local Government Network attacked the key innovation in the paper which links freedoms to performance.
Executive director John Williams said: 'The overall impression is one of a managerial agenda that tinkers at the margins of real institutional reform.
'[It] misses an important opportunity . . . there is virtually nothing in these proposals that will address the public alienation from the local democratic process.'
Local Government Information Unit director Dennis Reed said the comprehensive performance framework was 'patronising'.
He added: 'This new pseudo-scientific system of rewards and penalties will not only be expensive to implement and subjective, but runs the risk of being divisive.'
The GMB warned the paper would create two tiers of councils. Excluded from borrowing freedoms, poor performers would be forced to privatise.
Kent CC leader Sandy Bruce-Lockhart (Con) said councils should be free to choose freedoms that suited their circumstances.