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UNRULY councillors will be placed under greater scrutiny under measures outlined in today's State Budget.

The state government announced a $9.9 million investment in the Local Government Inspectorate to investigate misconduct.

The inspectorate has the power to investigate and prosecute instances of serious misconduct by councillors.

Minister for Local Government Tim Bull said there had been several "vital" improvements announced to improve local government.

He said the role of the inspectorate would be expanded over the next four years.

"Victorians are entitled to have confidence in their local government representatives and that the inspectorate has the appropriate powers to deal with those who break the community's trust," he said.

Money will also be used to develop a new website aimed at showing how rates are being spent.

"Residents and ratepayers will be able to use the 'My Council' website to see how their council compares to other similar councils, which will help drive improvements across the local government sector," he said.

"Local government has an important role in building a better Victoria by planning for growth as well as delivering services and local leadership that makes our community stronger."

Several issues have arisen at the City of Greater Bendigo since council elections in late 2012.

Last year's audit of the organisation found conflicts between some staff and councillors.