Mayors should be given major new powers, according to a report by the Starmerite thinktank Labour Together, which comes as officials put the finishing touches to a devolution paper due in the coming weeks.

The report recommends using city and regional mayors to road-test new public sector schemes before they are rolled out nationally, and giving them more control over their budgets and allowing them to commission more local public services.

If adopted, it would put elected city leaders, most of whom represent Labour, at the forefront of delivering public sector improvements across a range of areas including health, social services and welfare. It would further cement the status of mayors such as Sadiq Khan in London and Andy Burnham in Greater Manchester as some of the most powerful politicians in the country.

The former Michael Gove adviser Sam Freedman, who wrote the report, said: “Britain is one of the most centralised countries in the world, and by trying to manage everything, Whitehall is struggling everywhere. The mayors are the best way to build new capacity, while also increasing understanding of local needs in the way services are delivered.”

The report recommends giving mayors more power over health, education and employment by allowing them to commission local services directly. In regard to health, Freedman recommends allowing mayors or their deputies to chair commissioning boards, which are currently run by a mix of doctors, academics and former politicians.

In several areas of government, Freedman suggests letting mayors run one-off programmes or pilot schemes, which are often commissioned by central government and run by outsourcing companies.

In 2021, for example, the Department for Education contracted the Dutch recruitment agency Randstad to run its programme to extend tutoring to pupils who had fallen behind during the Covid pandemic. The scheme was beset by failures however, including low participation rates, and the company was axed from the programme.

Freedman also suggests giving mayors more power over budgets, including giving them pots of money to use for whichever local public services they think most need it.

Keir Starmer has endured an occasionally fractious relationship with Labour’s most high-profile mayors, including Burnham and Khan. Since coming to power, however, he has made devolution one of his first priorities, with the white paper expected in the coming weeks.

Officials say Labour Together’s report will inform their approach, although the white paper is more likely to focus on how regional leaders can deliver growth than how they can commission public services.

Starmer will meet mayors and devolved leaders from Scotland, Wales and Northern Ireland on Friday for the first meeting of his “council of the nations and regions”. He will be accompanied by Sue Gray, whom he ousted as chief of staff over the weekend but who has been given a new role as envoy for regions and nations.

Oliver Coppard, the Labour mayor of South Yorkshire, said: “If you believe that decisions are best taken by those closest to the people affected by them, then you need to give them the power to make those decisions. There is an opportunity for us to show the national government how it can reform the delivery of frontline services.”