I welcome Ed Miliband’s announcement today. After years of painful funding cuts (still going on) we could be forgiven for thinking that Westminster politics thought the recession was a problem caused by local government – rather than them being part of the solution.

But today the Labour party talks of devolution and it is good to hear that Ed Miliband believes in the need for ‘the biggest economic devolution of power to England’s great towns and cities in a hundred years’.

But today’s speech only means that the Labour party has taken steps in the right direction and joined the debate – a debate dominated by Michael Heseltine. His report, No Stone Unturned, makes a coherent and powerful argument for more devolution, spending and powers to local government worth £49bn. In contrast, Ed Miliband today talks about £4bn a year, and the government has promised £2bn a year.

We are still a long way from any kind of signal that cities will be given the freedoms necessary to allow us to be masters of our own destinies. We are crying out for flexibility and finance, not permission to run government projects in the same way Whitehall would.

It would be wrong, therefore, to say both sides of the Westminster political divide have woken up to the value of cities to the UK economy. Let’s just say they are wiping the sleep out of their eyes, but they are not out of bed yet.

There has always been mistrust and a destructive antagonism towards local government from the sceptics in all parties who have outnumbered the progressives. Those sceptics need to realise that for those of us delivering in local government – making cuts, while creating jobs, reshaping services while building houses and schools – watching them play politics is like watching reruns of Yes, Minister reflected in the oily film of the Westminster bubble.

And that bubble has been just as much a reason for lack of modernisation of local government finances and approach as the current austerity measures.

The failure of all parties to deal with the devolution of funding and powers shows in equal measures the lack of understanding of local government and the opportunities that exist for them to lead on growth in the areas they represent. The lack of imagination and innovation, ignoring the success of devolution in other countries, is literally costing our country billions.

Public finances are under such pressure that all parties are now finally looking for ways in which to solve the conundrum of wanting growth and sustainability with less money. Ed Miliband needs to be at the forefront of progressives, from all parties, looking for a new paradigm that can help achieve that. But we cannot rest either – political parties are now in a race, playing catch up with each other, and this can only be good for growth in our cities, towns and neighbourhoods.

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Joe Anderson is mayor of Liverpool

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Photo: Ed Thomas