Regions to get £6bn in government funding

Metrolink tram in Manchester Local transport systems, such at the Metrolink in Manchester, will be revamped using the £6bn of funding

The government has announced £6bn of funding for local governments designed to boost local economies.

The money will go towards supporting local businesses, creating jobs, building new houses and local infrastructure improvements.

Decisions on where to spend the money will be made by local authorities and businesses.

The £6bn is the first instalment of £12bn the coalition is investing in a series of local "Growth Deals".

Prime Minister David Cameron said: "Growth Deals are a crucial part of our long-term plan to secure Britain's future.

"For too long our economy has been too London-focused and too centralised. Growth Deals will help change all that. They are about firing up our great cities, towns and counties so they can become powerhouses.

"By trusting local people, backing business and investing in infrastructure, skills and housing, we can create thousands of new jobs."

The government says it expects the investment to lead to work on more than 150 roads, 150 housing developments and 20 rail stations, as well as kick-starting super-fast broadband networks.

At the end of last month, the opposition Labour party said it would transfer £30bn of funding from central to local government.

"The government's announcement today falls far short of Labour's plans, with only a small fraction of the £30bn being devolved, no decentralisation of powers over skills, infrastructure and employment and no proposals for city regions to benefit from increased business rates revenue," said shadow business secretary Chuka Umunna.

'The end'

Largest funding allocations by region

  • Greater Manchester £170m
  • London £151m
  • North Eastern £112m
  • Lancashire £84m
  • South East £84m
  • West of England £79m
  • Greater Birmingham and Solihull £63m
  • Heart of the South West £63m

Figures from £2bn, 2015-16 Local Growth Fund

The decision to invest directly in local economies follows a report by former deputy prime minister Lord Heseltine in 2012 calling for a greater devolution of power from London to the English regions.

The report recommended moving £49bn from central government to regional bodies to help local businesses.

Alex Thomson, chief executive of the Localis think tank, told the BBC that the funding marked "the beginning of the end of the culture of Whitehall knows best".

He said Local Enterprise Partnerships, comprising local authorities and businesses, now had to show they could provide good value for money in order to secure additional funding in the future.

The projects earmarked for investment include £18m to revamp the Metrolink transport system in Manchester, which will include 12 new trams, revamped stations and improved bus services. This is part of a wider £50m transport package across Greater Manchester.

They also include £23m for a new road tunnel linking Swindon to nearby Wichelstowe.

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