Scottish Conservative MSP Jackson Carlaw told MSPs that the councillors code of practice should be abolished to allow local councillors bring forward their own codes, on 26 April 2012.
Mr Carlaw, who was leading a debate on localism, said devolution of power back to local communities and councils was the "true way forward".
He also said it was "ridiculous and insidious" that councillors from a local community couldn't express an opinion on local planning applications.
Local Government Minister Derek Mackay said the government had agreed a statement of ambition with local government and other sectors on how they would work together in partnership.
Mr Mackay said business rates had been brought down to "incentivise local democracies".
He added the Scottish government believed in growing the public sector.
Labour MSP Sarah Boyack said there was a tension between the "provision of national services and local priorities".
Ms Boyack said local communities should be able to determine priorities for their local areas.
She said "a reality check" was needed.
Liberal Democrat Tavish Scott began by saying that "localism seems like a ghastly word to me".
The Shetland MSP then said that "there used to be a principle that local councillors were financially accountable".
Mr Scott this financial accountability should be reintroduced.