Birmingham should head a West Midlands city-region under the leadership of a powerful directly-elected mayor, an influential think tank said today.
The Greater Birmingham Authority would run economic development, regeneration, transport and skills, and be able to raise a five per cent levy on business rates to fund major projects.
A report by the Centre for Cities says that only by devolving more power to local government will the West Midlands be able to deliver key infrastructure schemes such as New Street Station and the Midland Metro.
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The document identifies a 13-district Birmingham city-region, including Birmingham, Solihull, Sandwell, Walsall, Wolverhampton, Dudley, Coventry, Bromsgrove, Redditch, North Warwickshire, Tamworth, Lichfield and Cannock Chase. Its population is about three million.
The new authority would take over the duties presently performed by Advantage West Midlands, the Learning and Skills Council, the transport authority and the regional housing board - and benefit from the #675 million budgets of the organisations.
At the heart of the CfC research is a suggestion that city-region authorities, including Birmingham and Manchester, should be under the control of an elected mayor.
Evidence from Bilbao in Spain to Portland in the US shows that mayors with tax-raising and spending powers can significantly improve economic performance and political accountability, according to the centre.
Adam Marshall, CfC researcher and the report's author, said: "Greater Birmingham needs more power. It is big enough to control its own economic development.
"This is the best way to increase jobs, improve transport and drive economic growth. Unelected regional quangos are too big and undemocratic but local authorities are too small. Directly-elected mayors will be controversial but they provide clear leadership and a visible line of accountability, as Ken Livingstone has shown in London."
The report criticises an "extraordinary clutter" of West Midlands quangos and institutions created by Government to coordinate spending programmes and to promote regeneration.
There are so many partners involved in city redevelopment that "paralysis is inevitable" the document warns.
About #35 million a year could be raised by a five per cent business rates levy, with the money ring-fenced for transport projects.
Rates bills for a large business would rise by about #3,000 a year and by #137 for a small shop.
West Midlands authorities have already put forward proposals to John Prescott, the Deputy Prime Minister, for the creation of a city-region based on the seven metropolitan districts. The CfC report enlarges this to include 13 districts.
The document was given a cautious welcome by Mike Whitby, the leader of Birmingham City Council.
However, he indicated that he could not support the proposal for a directly-elected mayor.
Coun Whitby (Con Harborne) added: "We are pleased that it calls for new financial powers for our city-region. This will help deliver key projects such as the regeneration of New Street Station. But we have concerns about the governance structures proposed."
Ted Richards, the Tory leader of Solihull Council and chairman of the West Midlands council leaders, said: "We have already got a well established process through the seven West Midland leaders working together. Why change something that's already working extremely well?"
Ian Brough, chief executive of Black Country Chamber of Commerce, said: "The idea of greater autonomy for the West Midlands is attractive, but we would need assurances that what emerges serves not just Birmingham but the surrounding boroughs."
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