The shadow education secretary Angela Rayner is to announce sweeping reforms to the school system that will clip the wings of academy trusts while boosting the powers of individual schools and local authorities.

Under a future Labour government, the free schools programme will end, and only councils will be allowed to open or “commission” new schools. However, parents and teachers will still be able to help establish “Co-operative trust schools” – a type of mainstream comprehensive school invented by the Blair government.

We will end the forced conversion of schools to academies, tackle financial mismanagement and focus on delivering what works to get the best results for pupils

Rayner will also pledge to end the forced academisation of failing schools, with additional powers for councils to take back existing academies when their sponsors fail. This follows calls for action over so-called “zombie schools”, institutions subject to academy orders but unwanted by academy trusts.

However, in her speech to the Labour Party conference, Rayner will stop short of any pledge to return all schools in England to local authority oversight, a move favoured by trade unionists and large numbers of Labour Party members.

The shadow education secretary will announce a longer-term ambition for a “new regulatory framework for all schools”, something the party plans to consult on during the next phase of the development of its so-called “national education service”, a cradle-to-grave universal education system inspired by the NHS.

In the meantime however, councils will take on a beefed up role in the sector if Labour wins the next election, commissioning and opening new schools for the first time since 2011, and dealing with underperformance in the academies sector.

Academy chains will also have their autonomy curtailed, with admissions responsibilities falling back to councils, which will also gain the right to “compel” academies to expand.

Controversial related-party transactions – business deals between schools and companies with links to their personnel – will be banned, and academy CEO pay will be capped at 20 times the salary of a school or trust’s lowest-paid employee.

“The Tories’ academy system is simply not fit for purpose,” Rayner said. “We will end the forced conversion of schools to academies, tackle financial mismanagement and focus on delivering what works to get the best results for pupils.

“For too long parents and local communities have been shut out of decisions affecting schools in their area. The next Labour government will give power back to communities so that our schools are run by the people who know them best – parents, teachers and local communities.”

Rayner also repeated a pledge from her party’s 2017 election manifesto for £8 billion in capital funding to deliver new school places, but said the free schools programme was not the right vehicle for that investment.

“Independent experts have found that the free schools agenda has failed on its own terms, costing more to deliver places, failing to provide them where they are needed, and falling far short of the promise that parents and communities would be empowered.

“Labour will address this with a new commitment to co-operative schools, giving parents, teachers, and the community the power to get the school places they need, with a genuinely meaningful role in running those schools.”