Commission told: 'use local media'

Thinktank: 'Britain has high quality local media'

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The Audit Commission should hold wide-ranging briefings to explain its assessment of council performance, a thinktank has urged in a controversial report on regeneration policy.

Policy Exchange, which has close links to Conservative leader David Cameron, argued that the briefings for media and communities would hold councils to account as part of its proposed bonfire of controls over their spending.

The idea appeared in its Cities Unlimited report, but was drowned out by controversy over its claim that regeneration spending in much of the north of England was doomed to fail.

It argued that central government direction had failed and  funds should be given to councils "with no strings attached". This would give councils incentives to improve performance, encourage innovation, and help make local government a more attractive career.

"At the moment, local authorities can always excuse poor services or high taxes by blaming central government because it is so dominant," it said.

Serving as a councillor or officer would be more attractive because "no longer will your primary responsibility be to cope with a deluge of instructions from Whitehall", it added.

A more active role for the Audit Commission would check councils' use of new financial freedoms.

"Britain is lucky to have exceptionally high quality local media," it said. "Most local newspapers make real efforts to cover local stories properly."

In response to the claim some northern cities were "beyond revival", the Core Cities group said its members, Birmingham, Bristol, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield, had an economy bigger than London's.

Director Chris Murray said the move would "empty cities of their 20% most-qualified people, overheat the south-east, create more deprivation and vast expense to the public purse."