Does localism count or not?

It means the Leeds City Region, for example, is now responsible for £1bn of transport spending – while pressure is continuing to grow on Chancellor George Osborne to formally approve many of the innovative ideas that have been set out by Lord Heseltine in his various blueprints for the North.

Yet the devolvement of powers will only work effectively if the Government – and the Treasury in particular – is prepared to give town halls greater financial flexibility over their budgets and ability to raise money.

As a hard-hitting report by the respected Centre for Cities think-tank concludes, large urban areas are failing to fulfil their economic potential because of Whitehall’s obsession with policy targets – or the increasingly tight rules that accompany the allocation of grants by the Department of Communities and Local Government.

Given that councils receive the bulk of the funding from the DCLG which is headed by one-time Bradford Council supremo Eric Pickles, their room for manoeuvre is limited if strings continue to be attached to this funding. And, if the coalition is truly committed to localism, as it says it is, why are local authorities forbidden from raising council taxes in excess of two per cent? Surely, it should be for town halls to determine such matters – and for taxpayers to give their verdict at election time when they can vote out any councillors who are guilty of profligacy?

While much rests on Mr Osborne’s announcement next month, the Centre for Cities report highlights the difficulties faced by councils – and the growing confusion about whether responsibility for delivering key services rests with Whitehall, individual town halls or the myriad of local enterprise partnerships and city-region organisations that are taking shape.

It is uncertainty that needs to be reconciled if cities like Leeds and Sheffield are to generate new jobs on the ambitious and necessary scale already envisaged.