Ed Miliband on Tuesday will herald the biggest devolution of power to England’s great towns and cities in a hundred years as the next stage of One Nation Labour’s plan to tackle the cost-of-living crisis.

In a speech in Birmingham, he will set out the interim conclusions of Andrew Adonis’s Growth Review recommending the end of a century of centralisation by at least doubling the level of devolved funding - handing control of the equivalent of more than £20 billion to City and County Regions over the course of a parliament.

He will say these measures will be included in Labour’s election manifesto as another key component of his One Nation plan to halt the race to the bottom - in wages, skills, prospects and productivity - which has left millions of families in the grip of the cost-of-living crisis.

Mr Miliband will announce that the process of devolution has already begun with he and Ed Balls writing to the leaders of every council, university and Local Enterprise Partnership asking them to draw up joint plans to boost growth and private sector jobs in their regions.

Those regions that meet strict tests established by the Adonis Review, will be given new powers over transport and housing infrastructure funding, as well as for the Work Programme and skills, he will say.

He will underline his message in today’s Independent that the central mission of the next Labour government will be to restore the link between the wealth of our nation and family finances. And he will ridicule Tory claims that the structural weaknesses of the economy have been fixed or that the cost-of-living crisis has been solved as he highlights official figures showing how, on current projections, middle-income salaries will continue to lag behind growth for years to come.

Building on detailed policy announcements on wages and prices over the last six months to tackle the cost-of-living crisis, the focus of his speech tomorrow is on jobs. And he will be clear that, in an era of tough fiscal constraint when Labour will balance the books in the next Parliament, new middle income quality private sector jobs will be crucial to restoring the link between growth and living standards.

In addition to the devolution policy announced tomorrow, Mr Miliband will highlight five other key planks in the economic agenda has already set out: greater competition in the banking sector to improve lending to business; revolutionising skills and vocational education; removing some of the predatory short-term pressures afflicting great British companies; supporting small firms by cutting business rates; and protecting British exports by staying in the European Union.

Taken together, this will help halt the hollowing-out of the middle class and create the conditions in which hundreds of thousands of high skill, high wage, high-tech, high productivity private sector jobs can flourish.

Mr Miliband is expected to say:

“Britain is the country of the industrial revolution and Birmingham was one of the great cities of that revolution. But the country of the industrial revolution has ignored the lessons of its own history for far too long: the country that once built its prosperity on the great towns and cities, like Birmingham, Bristol, Liverpool, Manchester, Glasgow and Cardiff, has become a country which builds its prosperity far too much in one city: London.

“We need a prosperous London, but we also need to build prosperity outside it. 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.

“This government had an opportunity to make a difference. Michael Heseltine’s review called for a massive devolution of funding from Whitehall to the cities. But David Cameron and George Osborne allocated just £2 billion for a Local Growth Fund in their Spending Review for 2015-16. The best report this government has produced has been the one that they have most ignored.

“We can and must do a lot better than that. It is why nine months ago, I asked Andrew Adonis to recommend the way forward for Labour. We have heard his interim conclusions today and his message is clear: devolving power from Whitehall to our towns and cities is essential to generate the new jobs we need.

“He proposes a new bargain: cities and towns that agree to come together with local businesses to plan for their economic future will be given historic new powers over funding for infrastructure, skills and economic development.

“They will be able to invest directly in transport and housing, as well as having greater say over skills with local businesses for the first time controlling the funding of apprenticeships. They will also lead on delivering the Work Programme with city - and county - regions able to use their local knowledge to decide which providers to use to get people back to work. And towns and cities will be given clear incentives too: by being able to share in the proceeds of growth in their area.

“With power of this sort comes responsibility. These changes will only bring new jobs, greater prosperity, if the towns and cities are willing to put the private sector at the heart of decision making.

“So today, Ed Balls and I have written to every local government leader, every Local Enterprise Partnership and every University asking them to work together and prepare for the next Labour government as part of our plan to close Britain’s productivity gap.

“The process of devolution begins now. 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.”

Detail of announcement:

Ed Miliband and Ed Balls are today writing to all local authorities, universities and LEPs setting out this road map and inviting them to prepare plans meeting the conditions which could be brought forward early in the next Parliament.

Authorities which bring forward plans in the first nine months of the next Parliament will in return receive a devolution deal finalised in the first spending review period of a Labour Government.

In the next stage of his review, Lord Adonis will build on the approach set out by Lord Heseltine’s Review. The Heseltine Review set out an “indicative list of central budgets” which could be considered for devolution over four years. But the Government allocated just £2bn for a Local Growth Fund in their Spending Review for 2015-16. Lord Adonis has been asked by Ed Miliband to go further and examine every line of the spending set out by Lord Heseltine so that significantly more funding can be devolved.

How local authorities and LEPs can get enhanced powers and funding.

1. Putting in place stronger political governance to drive economic leadership and decision-taking at city-region and county-region level.

2. Properly integrating a single Local Enterprise Partnership working closely with, but entirely independent of, the combined authority so that businesses are fully engaged in decision making and signed up to the local blueprint.

3. Developing an economic strategy, clearly focused on the creation of well paid jobs and reducing any productivity gap between the city region and top performing regions of the UK.