Portsmouth has been fast-tracked as it seeks greater independence from Whitehall in a bid to help them boost regional economic growth.
It is one of 20 areas that will enter negotiations with the Government to take on powers and responsibilities that will give them greater scope to thrive.
The so-called City Deals - the first eight of which were announced last year - will give participating areas the ability to use budgets better for local needs such as training and skills, roads and other developments.
In return, the areas must demonstrate they have a strong plan for local growth. The Government said it would work closely with cities to negotiate a deal over the next year.
The combined bid from Portsmouth and Southampton city councils, local borough councils and the Solent Enterprise Partnership, is one of City Deals approved for fast-tracking for a final decision in July.
Portsmouth City Council leader Gerald Vernon-Jackson said: ‘They clearly thought our bid was a good bid and that’s why we’ve been fast-tracked.
‘It should result in more investment in the area, and more freedom to attract funding free from government control.’
Speaking at Mansion House in the City last night, Deputy Prime Minister Nick Clegg said: “Even more places will be free from Whitehall control and have the tools to power their own growth. These deals help cities and their wider areas make once in a generation changes that will be felt by everyone across their region.
“Letting go of power and money doesn’t come naturally to Whitehall. Over time, the economic importance of other parts of the country has been devastatingly downplayed, as the economic elite have narrowed the debate towards a London-centric view.
“Rather than let our industries and communities wither, we need to free up cities outside of London that have their own unique selling points.”
The 20 areas announced today were: the Black Country; Bournemouth and Poole; Brighton and Hove; Greater Cambridge; Coventry and Warwickshire; Hull and Humber; Ipswich; Leicester and Leicestershire; Milton Keynes and the South East Midlands; Greater Norwich, Oxford and Oxfordshire; Reading and Central Berkshire; Plymouth; Preston; Southampton and Portsmouth; Southend and Thames Gateway South Essex; Stoke and Staffordshire; Sunderland and the North East; Swindon and Wiltshire; and Tees Valley.
Together with the first eight cities that concluded deals last July, the areas account for 71 per cent of the population of England and 68% of the jobs.
Financial Secretary to the Treasury and Minister for Cities, Greg Clark, said: “Each city is unique, yet for decades Whitehall has treated them as being the same - there has been too little sense of place in government policy.
“City deals are a quiet revolution in the way Britain is governed. Rather than London laying down the law, cities have the right to do things their way. The stories of their own futures will be as individual as their unique histories.”
Peter Box, chairman of the LGA’s economy and transport board, said: “The announcement of 20 new city deals is very positive and reflects the Government’s increasing recognition that local areas are best placed to drive economic growth.
“We need to accelerate the pace and scale of devolution and make deals available to all areas that want them. The Heseltine Review identified £58 billion of government funding for growth that could be better used if localities made the investment decisions rather than civil servants in Whitehall.
“There is clearly varying degrees of buy-in from different government departments. We hope that the March Budget will carry through the promise of the Autumn Statement by confirming that all of the tools and levers needed to drive local growth will be made available to councils, local businesses and their partners.”
Mr Clegg warned last night that the UK economy was losing out on £41 billion a year because of a London-centric business model that has allowed other great cities to “wither”.
Successive Tory and Labour governments choked off northern cities’ potential in favour of the financial services industry, he told City figures.
Urging the City of London to help close the output gap, the Deputy Prime Minister claimed the dominance of the capital and the south east is a “historical anomaly” out of step with competitor nations with multiple powerhouses.
“It is in everyone’s interests - not least London’s itself - if that potential is now tapped. There can - and must - be more than one jewel in our crown,” he will say.
“The challenge for us is to rebuild our economy so that it runs on all cylinders.
“If all of our big cities closed their output gap - in other words met their potential - we would see an additional £41 billion on GDP every year.”
It was the first of a new annual series of speeches by the Deputy Prime Minister at the Mansion House, which the Cabinet Office said had been set up to reflect the realities of coalition government.