Lisa Nandy pledges to give billions to local councils if she wins Labour leadership race

Ms Nandy says she will channel money that currently goes to Local Enterprise Partnerships (LEPs) straight to local authorities.

LEPs are voluntary partnerships between councils and local businesses intended to drive economic growth in an area, taking over many of the functions of regional development agencies, which were scrapped in 2012.

But in a speech on Thursday, Ms Nandy will say: "Local Enterprise Partnerships in England have received over £12 billion to drive economic growth in their local areas but most aren't up to the job.

"It's time to give back control to local authorities so that money for regional investment is in the hands of democratically elected councillors.

"Let's put power back in the hands of communities."

Speaking in Bassetlaw in Nottinghamshire - a former mining constituency that fell to the Tories during the election - Ms Nandy will also promise to give Labour councillors a bigger say in the party.

She will say the leader of the Local Government Association Labour group will be invited to attend shadow cabinet meetings along with the party's elected leaders in Scotland and Wales.

Ms Nandy will also commit to overhauling the party's leadership election rules to give Labour groups on councils a role in the nomination of candidates.

"Our councillors and their leaders possess so much insight and expertise through that we cannot afford to exclude them as we learn the hard lessons from successive election defeats," she will say.

"Local government has never been so important to our journey back to power in Westminster.

"Labour-led councils are our grass roots government and can help the party build trust and political success in all other elections."