Lord Heseltine will launch calls for a dramatic rethink in the way Britain is governed, in Birmingham today.

The former Deputy Prime Minister will publish proposals designed to create jobs and strengthen major cities outside London, after he was commissioned by David Cameron to draw up a economic strategy for the nation.

Top of his proposals is a plan to take £49 billion away from Whitehall and give it to local councils and business leaders to spend instead. It would mean scrapping a range of national initiatives. Instead, partnerships of local councils and chambers of commerce – known as Local Enterprise Partnerships – would get the money to spend on their own schemes, such as training young people, improving transport services and helping the unemployed find work. Other plans include:

* Bringing back regional ministers. A Cabinet minister would be named Minister for the Birmingham economic region, and would spend two days in the region every two months.

* Making councils more accountable by holding elections for every seat every four years. At the moment, Birmingham holds elections every three years out of four, for a third of seats at a time.

* Encouraging every council to become a unitary council. For example, Worcestershire currently has a county council as well as smaller district councils in places like Bromsgrove and Redditch, but Lord Heseltine argues that a single council would be more effective.

* Giving Chambers of Commerce an official role providing support for businesses.

* Making business an official part of the curriculum – and giving local employers at least two guaranteed seats on the governing body of every secondary school.

The proposals will be launched by the Tory peer in Birmingham’s historic Town Hall today. Jerry Blackett, chief executive of Birmingham Chamber of Commerce Group, said: “Lord Heseltine has recognised that it is time for the citizens and businesses of Greater Birmingham to have a bigger say in how their money is spent.”