Modest English devolution could add £144bn to the UK economy by 2020 by handing greater spending control to the regions, according to a survey of local business and political leaders.
Localis, a think-tank, said its forecast depended on the government freeing up Local Enterprise Partnerships, economic development bodies that bring together business, councils and universities. In return the Leps must become more democratic and accountable.
The 39 Leps sprung up after the coalition government abolished the nine regional development agencies outside London after it came to power in 2010. They have since been given extra powers, but the bulk of their £18.5bn spending remains ringfenced by Whitehall.
Localis found the Leps were popular, with 60 per cent of the 1,500 people it surveyed rating them as "good or very good".
However, they remained hamstrung by a lack of resources, powers and status: most still use local authorities as their accounting officers and they have to bid to central government for money.
In February they learned that Whitehall would control the £5.3bn in EU structural and investment funds between 2014-2020, despite assurances they would get a strategic role.
Respondents to the survey forecast the size of the economy by 2020 and aggregate responses totalled £1.6tn. However, if Leps got the powers and funds they have requested from central government, that would rise to £1.744tn.
Localis said Leps were "successfully marrying private sector entrepreneurial vision with public sector know-how".
All the big political parties back further devolution. Handing control of most budgets to England's biggest cities could boost the national economy by £79bn a year by 2030, according to a commission chaired by the economist Jim O'Neill.
Localis said the next government should devolve £12bn of funding each year, twice the level proposed by the Labour party. The Conservatives are committed to devolving £2bn of spending annually.
But there should be more accountability at the partnerships, for example a "dual lock" where council leaders and the Lep have to sign off on annual budgets. Localis said Lep chairmen could be directly elected, while the bodies should publish their accounts, minutes and board members' email addresses.
Mike Cherry of the Federation of Small Businesses said boards were dominated by big business. "[We have] called for them to have more resources, but not without reform. Greater transparency is needed to ensure they are accountable to the taxpayer."
Andy Street, chairman of Greater Birmingham & Solihull Lep and managing director of John Lewis, said: "With our general election just two months away it is clear that whatever the outcome Leps will continue to have a pivotal role in regional economic development."
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