The goal of sight reading is to be able to play what your reading as though your not reading. To get to that point... you need to be reading ahead of what your playing. The general way of doing this is to be able to recognize what your reading, both rhythmically and melodically, which gives you time to actually play... articulations, being able to listen what else is going on etc...
Generally you work on rhythmical and melodic aspects separate as well as together. Rhythm is more important at first. The standard rhythm books are...
Amazon.com: Modern Reading Text in 4/4 For All Instruments (0029156061369): Louis Bellson: Books
and
Amazon.com: Odd Time Reading Text: For All Instruments : Rhythmic Studies Designed to Develop Accuracy and Speed in Sight Reading As Applied to Odd Time Signatures (9780769233727): Louis Bellson, Gil Breines, Henry Adler: Books
Both by Louis Bellson, they have mistakes... they're there for a reason, Most charts and printed music has mistakes, you will need the practice of recognizing mistakes as well.
Your practice of scales, arpeggios etc... are training you to recognize melodic patterns, the next part of learning to sight read. You'll need lots of material... anything you don't know... even fake books.
Sight reading is not memorizing notated music... that is performance.
As far as improve... there are many approaches... but you really can't begin to solo with out getting your skills together... knowing your fretboard as well as hearing it. There are many layers to jazz... most never get past the first. Many times players want results before they've done the work... it will all come out in your playing, you can fake it sometimes... not really. You'll sound like some one who hasn't done the work... at least to jazz players.
The cool thing... putting in the time is great... it just keeps getting better...Reg