The ethnic origin of excluded pupils will also be monitored under a pilot project run by the Audit Commission and the Commission for Racial Equality.
A TES analysis of Government figures last month revealed that black children were up to 15 times more likely to be excluded in some areas than their white classmates.
The Audit Commission's performance indicators cover all council functions and allow comparison between local authorities. Published annually, they are seen as a key part of its role scrutinising local government.
The new indicators will measure performance from 1999-2000 and will be published in spring 2001. Schools, not authorities, exclude pupils but councils, which now have responsibility for reducing exclusions by a third by 2002, can order schools to take a pupil back.
Authorities will also be judged on the amount of alternative tuition attended by excluded pupils. Most are educated in pupil- referral units, at home or in a new school.
Local authorities have welcomed the new indicators but warned that exclusions will be hard to tackle.
"It's not that authorities don't care about these pupils, but they have been swamped by huge numbers", said Emma Westcott, policy officer with the Local Government Association. Many, she said, cannot to meet their legal duty to give excluded pupils a full-time education.
The Commission for Racial Equality welcomed the pilot study of volunteer councils. A spokeswoman said: "We had been talking to councils' directors of education and are pleased that so many spontaneously approached the Audit Commission about setting up a pilot.
"The details of the project have yet to be decided but we are delighted to be working in partnership with the Audit Commission on this project."
Nationally, black children were more than three times as likely to be expelled than white children according to the most recent Government figures.