The conclusion comes from the Commission on Public Sector Reform in the North East, set up by the Institute of Public Policy Research North think tank.
The body says it is launching an inquiry to find out why, despite notable improvements, the region has still not caught up with outcomes in other regions.
It said that while educational results had improved since 1997, life expectancy in the region was still nearly one and a half years less than the national average, and more than two years less than people living in the South East.
The commission said there was a clear paradox between outcomes and the comparatively high performance scores of local councils - 10 of which in the region have four-star Comprehensive Performance Assessment ratings - and health authorities.
Commission chair Sir George Russell said the commission would explore whether more locally-rooted policies could lead to faster improvements, compared to national 'one-size-fits-all' solutions.
“The quandary we want to get to the bottom of is why, despite the North East having highly-performing public services, many outcomes across health, education, and welfare to work still lag behind other regions, and more importantly if more local, more personalised services will allow us to make significant improvements in the future,” he said.