Call to devolve £6bn to regions to get people back into work and restore social order

The Centre for Social Justice (CSJ), in a cross-party study, highlights a surge in the number of people of working age leaving the labour market.

Against a backdrop of summer riots, centre founder Sir Iain Duncan Smith said it should serve as a "wake-up call" to Westminster.

Moving power closer to communities is the best way to restore social order, the think-tank warns, or risk seeing sickness benefit soar.

Such investment would bring employment support and education services closer to home, it argues, allowing local coaches and grassroots charities to take the lead.

A cross party commission, with Manchester Mayor Andy Burnham, former Lib Dem leader Tim Farron and Bank of England governor Lord King, will present its new report, A United Nation, tomorrow.

Group chair Martin Ivens, former editor of The Sunday Times, said: “Getting people off sickness benefit and into work is a vital national priority. Our report centred a big cash switch from the centre to the provinces is the only way to make a difference.”

Previous reports have highlighted divides between the "haves and have nots" in society, warning the most disadvantaged are no better off than they were 15 years ago.

Now new findings come following a summer of disorder in more than 20 towns and cities, with CSJ research suggesting a strong link between violence and levels of deprivation. Many of these areas would benefit most from proposals, it says, with higher numbers of people who could return to work.

The number of people deemed 'economically inactive' has jumped 400,000 in a year to 9.4m, the report outlines, with over three million people now signed off sick.

The commission is backed by a new CSJ report – Going Dutch - which suggests devolved powers as seen in the Netherlands could help 700,000 people back into work.

The report is based on polling with over 6,000 people and 300 charity groups. It calls for employment support services to be devolved to local authorities along with adult education, while a 'family credit' could help with childcare options. It also highlights neighbourhood policing, social housing, and more sport in schools to "champion a lost generation".

Andy Burnham, Mayor of Greater Manchester, said empowering local decision makers delivers better results: "The current system simply doesn’t work for people, and often leaves them feeling worse, damaging confidence and self-esteem.

"If we want economic growth that benefits people and places, we can start by shifting power out of an overheated centre and back into the hands of local communities."