Let $G$ be a graph with chromatic number $χ$, maximum degree $Δ$ and clique number $ω$. Reed's conjecture states that $χ\leq \lceil (1-\varepsilon)(Δ+ 1) + \varepsilonω\rceil$ for all $\varepsilon \leq 1/2$. It was shown by King and Reed that, provided $Δ$ is large enough, the conjecture holds for $\varepsilon \leq 1/130,000$. In this article, we show that the same statement holds for $\varepsilon \leq 1/26$, thus making a significant step towards Reed's conjecture. We derive this result from a general technique to bound the chromatic number of a graph where no vertex has many edges in its neighbourhood. Our improvements to this method also lead to improved bounds on the strong chromatic index of general graphs. We prove that $χ'_s(G)\leq 1.835 Δ(G)^2$ provided $Δ(G)$ is large enough.