By politics.co.uk staff

The government’s commitment to decentralising power in its localism bill set to be unveiled this week runs the risk of being “cosmetic”, a thinktank warns.

The left-leaning Institute for Public Policy Research (IPPR) argued that although the localism agenda was promising, it will be largely meaningless unless the coalition delivers “real powers with new funding streams that give local people more control over how their taxes are spent”.

Mr Pickles is set to announce the plans today. These are expected to include measures to give neighbourhoods control over local planning decisions and reducing local authorities’ reliance on grants from central government – which are being cut back dramatically as a result of the spending review.

IPPR director Ed Cox said: “The localism bill is going to be the true test of whether the government is committed to anything more than just a cosmetic form of ‘lipstick localism’.

“Real localism will only be achieved by delivering real powers, including a range of tax-raising and revenue-generating powers for local authorities.”

The thinktank argues that the fact local government in Britain is dependent on 80% central funding leaves the UK lagging behind nearly all other European countries in transferring power to local people.

On the plans for allowing local groups influence over planning decisions, Mr Cox warned: “Councils need to retain some powers just as central government is retaining powers over big planning issues.”

But the thinktank was broadly supportive of moves to greatly increase the number and remit of directly elected mayors in British cities, calling on Labour to abandon their opposition to the plans.