The Government's industrial strategy must be led locally, a think-tank has said as Whitehall announced a £556m cash boost for the Northern Powerhouse.

Speaking at a cabinet meeting in the north-west, prime minister Theresa May today said the industrial strategy would ‘drive growth across the whole country' and create ‘more high-skilled, high-paid jobs and opportunities'.

She said: ‘It [the industrial strategy] will be underpinned by a new approach to government, not just stepping back but stepping up to a new, active role that backs business and ensures more people in all corners of the country share in the benefits of its success.'

But chief executive of think-tank Localis, Liam Booth-Smith, warned the industrial strategy could only be successful if it was locally-led.

He said: ‘All of this must be underpinned by local leadership. 

‘The prime minister should use the opportunity created by the green paper to plan a new industrial compact, a contract with those places in the UK with highest economic potential, to give new powers to city and regional leaders to ensure they can deliver on her vision.

‘Such a move would be the largest single transfer of power since the first meeting of the Scottish parliament in Holyrood in 1999,' he added.

Further thoughts from @adamjlent #IndustrialStrategy: big investment not enough. Central & #localgov must work together for creative places pic.twitter.com/UbuDVVHTxu

— NLGN (@NLGNthinktank) January 23, 2017

Director of think-tank NLGN, Adam Lent, said: 'The thing that absolutely drives the productivity of a country is the inherent creativity and entrepreneurialism of its people so while what the Government is announcing – big investment and big infrastructure and university research funding – is, of course, absolutely vital they also have to work really closely with local government to drive the sorts of creative and innovative places that will turn the UK into the really competitive nation it needs to be in this post-Brexit era.'

Clive Lewis, shadow secretary of state for business, energy and the industrial strategy, said: ‘This belated attempt to develop a proper industrial strategy is a step in the right direction, but, once again, what the Tories are offering looks like too little too late.

‘We await further detail, but what's been announced so far will fall far short of getting us back to where we were in 2010, let alone equip our economy for the challenges of the 21st century.'