A ‘new bargain’: Miliband ready to hand billions to Britain’s cities

A Labour government would hand £20 billion of funding over to city- and region-wide bodies over the course of the next parliament, Ed Miliband has confirmed.

The leader of the opposition and shadow chancellor Ed Balls have already written to local authority chiefs exploring how the changes could be implemented if they win the next general election.

Under the changes regions which meet a series of tests would be handed new powers over their transport and infrastructure funding.

Cities and towns would only receive the cash if they are prepared to "put the private sector at the heart of decision-making", however.

"We need a prosperous London, but we also need to build prosperity outside it," Miliband said in a speech in Birmingham.

"Today, every region outside London is below the national average when it comes to productivity, while London is 40% above it.

"Britain will never tackle the cost of living crisis and create the new private sector jobs that are essential to doing so unless we break this pattern, reverse a century of centralisation, and change from an economy based on the success of one city  to all of our country's great towns and cities: a truly One Nation economy."

Miliband's proposals build on the work of former Thatcher Cabinet minister Michael Heseltine, whose report for the coalition suggesting a major devolution of funding to the cities was shelved by David Cameron and Nick Clegg.

"The best report this government has produced has been the one that they have most ignored," Miliband added.

Under the "new bargain" he will offer councils will be given a greater say on skills and apprenticeships, handed responsibility for implementing Labour's work programme and offered incentives to share in the areas's growth.

"The process of devolution begins now," Miliband declared, as he invited local authorities to come forward and offer to work together.

"I am inviting them to demonstrate the real economic leadership we need to see, putting in place a real economic strategy for their own area of our country, clearly focused on the creation of high-skilled, well-paid, private sector jobs.

“Each and every authority which can bring forward plans of this sort in the first year of the next parliament, will receive powers and access to resources from Whitehall the like of which we have not seen in living memory: real powers for Britain's towns and cities to make the difference, to help create the jobs we need, and the conditions for business to succeed."