Ministers will use this autumn's local government white paper to encourage councils to revive participation in anything from chambers of commerce to youth clubs in a bid to overcome perceived apathy.
The move, announced at the Local Government Association conference, forms the heart of the Department for Communities & Local Government's effort to put councils at the heart of overcoming racial tensions and reviving local economies.
Local government minister Phil Woolas told LGC: 'The traditional pillars of society have diminished, whether the Church, trade unions and youth clubs. We have to rebuild these institutions that people feel an affinity to and local government is at the spine of that.
In his first speech on community cohesion since the cohesion and faiths unit was moved to his department, he set out an eight-point plan to revive community engagement which would expect all areas to develop interfaith forums and race equality councils.
Ministers are also considering making membership of chambers of commerce compulsory to ensure business takes a prominent role. 'There is a case for that,' Mr Woolas said.
Javed Khan, Harrow LBC's director of learning and culture, said: 'Community relations here are better than anything across Europe. But institutional racism is still rife within councils - when it comes to the auditing of what councils are doing we need greater vigour.'
Every council should:
>> Establish an interfaith forum
>> Strengthen private sector role through chamber of commerce
>> Establish an affective race equality council
>> Ensure cohesion focus in community policing
>> Improve voluntary sector relationship
>> Strengthen youth forums
>> Maintain healthy political parties
>> Provide strong leadership