Labour is proposing to give more power and money to English cities outside London and the regions around them.
Under its plans, councils would get to control how they spend extra income generated from business rates.
In a speech in Leeds, Labour leader Ed Miliband will say councils can work together to be "economic powerhouses" leading investment in infrastructure, skills and economic regeneration.
Labour could devolve £30bn in funding for regional enterprise, he will add.
The Labour leader will say he is accepting the majority of the recommendations of a report by the former Cabinet minister Lord Adonis on how to stimulate business innovation and tackle "chronic regional imbalances" in growth.
Its main proposals include:
- Giving new combined authorities in cities and county regions control over how additional revenue from business rates is spent
- Giving businesses more say over how Local Enterprise Partnerships are run and their priorities
- Releasing up to £30bn in government funding for regional housing, transport and employment schemes
- Creating a new national funding framework for innovation policy
- Setting a target of 25% of all government contracts being awarded to small firms
- Establishing a new small business administration
- Creating a regional network of small business investment companies
- Expanding apprenticeships in science, technology and maths
Mr Miliband will say that job creation in the private sector has been too concentrated in London since 2010 and that he wants to see every part of Britain contribute to a new "era of shared prosperity".
End QuoteThe economic test of this package is whether it would rebalance the British economy"
A future Labour government would seek to achieve this by reforming the relationship between local and central government not by big Whitehall spending, he will say.
Using tax as a "lever" for raising levels of regional growth, Mr Miliband will cite the Greater Manchester Combined Authority as a model for how cities and counties can pool their resources and know-how to make a difference.
For the past three years, the 10 councils in Greater Manchester have been co-ordinating their economic development, regeneration and transport functions to try and map out a long-term plan for sustainable, balanced economic growth.
As an incentive to try to encourage similar collaborations, Mr Miliband will say new combined authorities established under a Labour government would be free to spend however they choose any extra revenue they generate from business rates as a result of their own efforts.
Business rates are charged on most non-domestic premises, including warehouses, shops, offices, pubs and factories.
The settlement will be "revenue neutral" and any extra revenue raised will be offset by a cut in councils' block grants but Mr Miliband will stress the importance of money raised locally being spent locally.
"The next Labour government will ensure city and country regions, like this powerhouse economy in Leeds, get control of business rates revenues. So that any extra money raised here thanks to the efforts of you and everyone in this great city can be invested here.
"I know the next Labour government cannot solve every problem by pulling levers in Whitehall. We can only do it by working with, harnessing the ideas, energy and the dynamism of great businesses, cities and county regions so you can help build and share in a more successful and prosperous Britain."
Lord Adonis conceded that his proposals were similar to those set out in a recent speech by Chancellor George Osborne and a report last year on boosting growth by former Conservative Deputy Prime Minister Lord Hesesltine, entitled No Stone Unturned.
The Labour peer said he had spoken to Lord Heseltine when putting together his report and broadly agreed with his call for "more powerful cities" but although there was now a political consensus on the need for greater regional devolution only Labour would deliver it.
"Increasingly, I think, the question is who is going to act, rather than just make speeches," he told BBC Radio 4's Today programme.
"And act means really serious devolution of resources and also preparedness to devolve tax resources.... to give really big incentives to the big cities and counties to attract business."
Skills shortagesThe BBC's political editor Nick Robinson said the economic test of the package was whether it would rebalance the British economy. But he said Labour also knew it needed to answer the charge that it knows how to spend the proceeds of growth but not how to generate it.
The CBI said the report "identifies the right priorities for growth and job creation, and recognises that the benefits of the recovery must be shared across all regions of the UK".
"His report addresses many of the major challenges facing our economy, from skills shortages to strains on infrastructure," said its deputy director general Katja Hall.
"Size matters for local government, and more combined authorities would help create regional economic powerhouses to invest in research and development, support exporters and expand apprenticeships."
Last year, ministers set out plans for councils in England to keep half of any increase in business rates they generate rather than paying them into Treasury coffers.
Business rates are paid into a central pool before being redistributed to all councils in the form of a grant. Councils currently generate less than half of their income but ministers believe this figure could ultimately rise to 80% or more.
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