Big English cities offered self-rule powers George Parker, Andrew Bounds and Chris Tighe

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George Osborne on Thursday offered the big cities of England unprecedented new powers, but only if they follow Greater Manchester and adopt an elected mayor.

Mr Osborne said in a speech in Manchester that “the old model of trying to run everything in our country from the centre is broken”. He said he wanted to transfer tax and spending powers from Westminster to a new wave of city mayors.

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The Cities Devolution bill is being presented as an English counterweight to the promise by David Cameron to transfer new powers to the Scottish parliament.

But Mr Osborne said he would only give cities power over areas such as transport, housing, skills and healthcare if they embrace his “radical new model of city government”.

“It’s right people have a single point of accountability: someone they elect, who takes the decision and carries the can. I will not impose this model on anyone but nor will I settle for less. London has a mayor,” he said.

The chancellor also announced that he was appointing Jim O’Neill, the former Goldman Sachs chief economist as commercial secretary to the Treasury, with special responsibility for city devolution.

Mr Osborne sees Greater Manchester as “the blueprint” for this new model. The city and its surrounding towns have opted for an elected metro-mayor and are at the heart of the chancellor’s “northern powerhouse” plan.

The chancellor has offered Manchester £1bn of spending power over transport, skills and other areas as well as joint control of £6bn health and social care spending with the NHS.

But other cities like Leeds, Liverpool, Sheffield and Birmingham have so far resisted the idea of elected mayors covering their city region. Mr Osborne’s offering is intended to persuade them to change their minds.

Many cities have formed so-called combined authorities along the lines of Greater Manchester, which pool decision making across city regions such as West Yorkshire and the former Merseyside.

Combined authorities centred on Leeds and Sheffield have been granted some additional powers by Mr Osborne, but not on the scale of those offered to Manchester.

There remains fierce debate about how far devolution should go and which cities should be eligible.

The Core Cities group — which represents England’s eight largest city economies outside London, as well as Glasgow and Cardiff — on Thursday launched a “devolution declaration” in favour of further and faster reform.

In 2012, the Conservatives offered referendums on single-city mayors in 12 places but only Liverpool and Bristol adopted the model.

Last week’s local elections showed voters’ choices of elected mayors can be radically different from their choice of MPs and councillors. The six elected mayors comprised two independents, one Liberal Democrat, one Labour and one Conservative.

Manchester’s interim mayor will be chosen by councillors on May 29. Labour’s Lord Peter Smith, Wigan council leader, and Tony Lloyd, the police commissioner, are the only candidates. A citywide election will be held in 2017.