An investment bank should be set up to 'kick start a productivity revolution' after Brexit, according to a local government think tank.

Localis says the Government must guarantee that money currently given by the European Investment Bank and EU structural funds should continue but should be handled by a British equivalent.

It says a 'renewed relationship of trust and respect' is needed between local and central government' to restore 'economic purpose'.

‘Hitting Reset – a case for local leadership’ says providing financial resources for economic investment, freedom to raise local revenues to fund vital local services and a transfer of powers from Whitehall to local level are 'vital to rebuilding a strong local state capable of rebalancing the national economy'.

A British Investment Bank would enable regional productivity to be democratically accountable and the next Spending Review should set out a replacement to EU funding until 2025.

Localis also calls for a Royal Commission into fiscal devolution as the first step to providing long-term surety of resources, empowering the local state to drive vital 'place-based economic and social reforms'.

In the shorter term, local authorities should be given the freedom to set council tax levels and keep full business rates revenues.

Localis CEO Jonathan Werran told LocalGov: 'A British Investment Bank would be able to allocate resources where they are most required to kick start a much-needed productivity revolution.

'It would mean investment could be organised and agreed at local level and stimulate growth.'

Ann McGauran reports in further detail on the report (£).