Financial Secretary to the Treasury Greg Clark said the people in the regions are best placed to solve any "obstacles" that stand in the way of jobs.
Highlighting a lack of skills, and infrastructure, he said "the people who can best do something about it, are the people in those towns".
Today's response reinforces the local approach the Government is taking to grow the economy. Jobs are created in offices, on high streets and in industrial parks around the country, not in Whitehall.
– Eric Pickles, Communities Secretary
We are giving more power than ever before to Local Enterprise partnerships and councils to drive growth in ways that best suit their local economy, not through diktats from central government bureaucrats.
This is also a challenge to councils to innovate, to come together and pool resources and functions, to better deliver economic development across their area.
The Greater Birmingham Project Report was launched today, exploring ways of stimulating economic growth in the West Midlands.
The project, which is being piloted in the West Midlands, is being led by Lord Heseltine who will present the recommendations made in the report to the Prime Minister about ways the Government can help Birmingham to flourish.
The Chancellor George Osbourne is expected to comment on the suggestions in the report tomorrow.
Lord Heseltine's report has set out "the best way" to boost regional growth, Deputy Prime Minister Nick Clegg is expected to say.
– Nick Clegg, Deputy Prime Minister
It's a big change from the hand-out attitude of the past that stifled innovation and turned the regions into powerless centres that relied on Whitehall for jobs and spending.
England's 39 business-led Local Enterprise Partnerships (LEPs) will benefit from an immediate funding boost worth £500,000 over the next two years.
In 2015, the Government will create a single pot of money, which LEPs can bid from, and spend on projects of their choice.
The money will be taken from capital cash currently allocated to departmental budgets and European Union funding.
In return, the Government will make LEPs set out their long-term plans in Local Growth Deals.
The announcement today comes as the Government responds to Lord Heseltine's plea to devolve greater power to the UK's regions.
The Government has backed a plan to devolve greater power to the country's regions, in a bid to boost jobs.
Today the coalition will announce their support of the changes recommended by Tory peer Lord Heseltine, in his report No Stone Unturned, which was published last year.
In the report, Lord Heseltine called for the Government to slash red tape and hand back decision-making powers to Britain's major cities.
He said local communities should have greater say over matters including transport, housing, and vocational training.