• Centre 'not enormously inclined' to devolve, he warns
• Coalition also divided over mayoralty model for cities
A "huge battle" is taking place between government ministers over how much extra power should be granted to directly elected mayors, Lord Heseltine has said.
Heseltine, the chairman of the Regional Growth Fund and an informal adviser to David Cameron, indicated he was choosing his words with care and could not disclose too much, but said: "Central government is not enormously inclined to giving away power. There is a huge battle going on."
He added: "The idea that we have local government in England is a fiction."
The disputes are said to be occurring across Whitehall and cover issues such as money-raising powers, transport, welfare, strategic planning and economic policy functions.
The disputes are made more complex by the Liberal Democrat wing of the coalition opposing elected mayors in principle, even though Nick Clegg, the party leader, is responsible for urban policy.
Clegg would prefer to devolve power to cities without mayors being established. Liberal Democrats in Clegg's Sheffield constituency strongly support the existing council structure as more democratic than having an elected mayor.
By contrast, Cameron and his chief strategy adviser, Steve Hilton, strongly favour elected mayors, and Number 10 consults Heseltine regularly.
Referendums are being held in 10 cities on 3 May to decide if mayors should be established, with elections in the cities that approve the proposal scheduled for November. Two other cities, Leicester and Liverpool, have gone straight to a mayoral model without holding referendums.
There is frustration in some cities that the government has decided not to define the powers that mayors will be given until after the referendums.
In a paper issued in January, the Department for Communities and Local Government listed the powers various cities and lobbying groups wanted to be ceded to the elected mayor. But it said it wanted to see a bespoke approach, adding: "The government does not intend at this stage to reach any view about the specific powers that might be devolved or about a council's scrutiny and accountability arrangements."
Speaking at a meeting in Birmingham, last night, the city council's Labour leader Sir Albert Bore, a possible mayoral candidate, challenged Heseltine to set out the powers: "The government should come clean about what powers are on offer. If they are no more than the current council leader, they risk losing the referendum to a no vote."
Bore said he had received no reply from the communities department about the powers that might be transferred.
Heseltine himself is a maximalist and would like to see mayors have oversight over regional, rather than just city, transport. He would also like to see them take greater responsibility for welfare, including aspects of the DWP's Work Programme – one of the ideas being advanced in Liverpool – as well as strategic planning.
One source familiar with the discussions said: "There is a rearguard action being fought from department to department to minimise what is passed to mayors, and people like Greg Clark, the cities minister, are having to fight back."
Lord Adonis, arguably the chief Labour enthusiast for elected mayors, has said that many councils already have strong powers, but that the transfer to a mayoral model will give greater responsibility to one individual with a popular mandate, so transforming the influence and accountability of the council leader.
Siôn Simon, the former Labour MP now in the running for a mayoral candidacy in Birmingham, has published a 20-page checklist of powers he believes a mayor should have, including the power to raise money for infrastructure projects; devolved control over the regional budget of the homes and communities agency; power to change the management of failing schools; the authority to create enterprize zones; and the chair of the regional police and crime panel. He believes the budget of Birmingham council will rise from its present £4bn a year to £8bn over eight years as powers are devolved.
Professor Wyn Grant, who chairs the Warwick commission into the role of elected mayors, has warned that the case for mayors is damaged by leaving powers unclarified.
He said: "It makes it difficult for voters to decide what they're voting for. They won't know what the mayor is going to do, or if it goes beyond being a figurehead with relatively limited powers. Governments are reluctant to give local authorities any more powers. Government wants to control how much money is spent."
Others say the specific powers of mayors are not important to voters, and argue that the vote will be seen a referendum on the efficiency of local government.
The Electoral Commission has approved a question stating "How would you like Birmingham to be run? By a leader who is an elected councillor chosen by a vote of the other elected councillors? This is how the council is run now. Or by a mayor who is elected by voters? This would be a change from how the council is run now."
Supporters of mayors are delighted with the wording of the question, since it is more likely to lead to yes votes wherever local government is unpopular.