Extra Council Spending Powers To Boost Growth
Towns and cities are to be given new powers to keep the tax receipts they collect from businesses to spend on major infrastructure projects to drive economic growth.
Ministers have already handed eight cities, including Manchester, Sheffield and Newcastle, more control over strategic planning decisions and public transport budgets.
A further 20 areas including the Black Country, Southend and Cambridge have been invited by Deputy Prime Minister Nick Clegg to bid for a "city deal" and similar spending powers.
Mr Clegg warned regions could no longer rely on handouts from the Government collected in the City.
"You can't revive the regions just through handouts from Whitehall - certainly not now when the Treasury's coffers are bare. And even if we did have lots of money, the previous approach was fundamentally flawed," he said.
"Revenues from the financial services sector were recycled round the rest of the country through the long arm of the state, creating the illusion of strong, national growth. Jobs were created but in an unbalanced way, over-relying on the public sector, funded by tax receipts from the City of London.
"And we've seen what happens when the conveyor belt breaks, as it did spectacularly in 2008. Those tax receipts fall, the money stops flowing and the whole country feels the consequences as the public sector contracts and jobs are lost.
"This nation is made up of 100,000 square miles. It cannot rely so heavily on one. So we need a stronger, more resilient economy, built on the backs of industrious and independent cities."
He added: "Wave one were the trailblazers. Their ingenuity and drive have made it possible to have this second round. But wave two will help decide whether this level of decentralisation goes from being the exception to the norm. Personally, I'd like to see a deal for every area that can make it work.
"This is a rare opportunity to rewire our political system, to unleash the grassroots genius that will take our economy from strength to strength."