Budget: Enterprise partnerships to be based around cities and economic areas

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It said the partnerships between elected councillors and business would be based around England's major cities and other economic areas and would be designed to improve coordination of public and private investment in key areas such as transport, housing, skills and regeneration.

A White Paper due later this summer will set out plans for incentives for local authorities to support growth, including options for business rates and council tax, which would allow councils to reinvest the

benefits of growth in local communities.

The Government will also make it easier to get planning permission where there is potential or need for business growth through so-called local development orders.

Business Secretary Vince Cable last week told MPs the agencies will be replaced, "but the structures that emerge could have a regional scope if that is what local people want".

David Harker, a partner in Deloitte's public sector practice, said: "The key issue is giving serious thought to what

functions can be taken on successfully at a local level –

physical regeneration, local infrastructure, possibly tourism, but some will be delivered more efficiently and effectively at a wider than local authority scale.

"The local enterprise partnerships will need to give the flexibility for the what and the how in this space to be determined locally.

"What is clear though is that there is going to be some serious transitional work required no matter what models follow.."

A spokeswoman for Yorkshire Forward said: "We accept change is coming and we are ready for it. However, this is as much about the functions performed in the region as their form.

"The future of any local

economic partnership arrangements are in the hands of

our locally elected councillors and business leaders, and we

are confident that they will advocate a way forward that is right for the people and businesses of Yorkshire and Humber."