A think tank as called for England's mayors to be given a 5% share of income tax revenues which would shift an extra £3.8bn a year from Whitehall and double the funding under mayoral control.

IPPR and IPPR North argue the proposal would let local leaders invest more in transport, housing and regeneration without raising income tax, by transferring budgets currently held by departments such as the Department for Transport and Ministry of Housing, Communities and Local Government into mayoral control.

Researchers modelled smaller alternatives too: a 3.5% share would add £1.7bn a year, while a 2.5% share would bring greater spending autonomy without increasing the funding total.

The report, endorsed by former Treasury minister Lord Jim O'Neill, welcomes Prime Minister Andy Burnham's plans to extend fiscal devolution to all mayors by 2028, but warns success depends on strong safeguards.

Recommendations include regional audit offices, borrowing powers for experienced authorities, and a tariff-and-top-up system to redistribute funding from richer to poorer regions.

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Lord O'Neill said the UK remains a ‘centralised outlier’ among its OECD peers.

‘Without fiscal devolution, mayors and local leaders won't have the freedom to make real change happen,’ he said.

‘It is a simple mathematical fact that if the places with the biggest potential grow more strongly, the national economy will also grow to the benefit of all.’

Report author Aditi Sriram said mayors have long been ‘expected to drive growth with one hand tied behind their backs,’ and that fiscal devolution would let them plan for the long term and share in the growth they generate.