The money, part of the Communities in Control: Real People, Real Power white paper, came alongside a host of measures to give more power to local communities and to young people.
Blears promised to set up a programme for young people to shadow government ministers and mayors to help make politics and local services more relevant and open to them.
Street markets, community centres and swimming pools will also be handed over to local residents if they can prove they can run them better than local authorities.
The government wants every area of the country to have a community kitty that local people can decide how to spend, and for citizens to have a bigger say over youth and community safety spending.
Blears said: "In many parts of the country, local democracy needs a boost, with low turnout at local elections and people feeling they can't influence the way some issues are decided in their area."
The £70m Communitybuilders fund has been warmly welcomed by children's charities.
Steve Alexander, chief executive of childcare charity the Pre-school Learning Alliance, said: "Through volunteering, pre-schools offer opportunities for parents, especially women, to gain new skills and confidence, which in turn can empower them to pursue training and education or take new career paths.
"We look forward to monitoring the results of this funding on the ground to ensure that it brings the benefits it promises to deliver."
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