The Chancellor must not ignore the Exmouth and the wider East Devon area in this week's budget when he tries to 'level up' parts of the North and the Midlands, Devon County Council leader John Hart warned today.

"Devon and the greater South West are just as deserving of investment as the Blue Wall areas in the North and Midlands," he said.

"And the need is even greater now with the collapse of Flybe which will have a massive impact on our local economy and our local businesses.

"We have laid out clear plans and policies in the Great South West project that will deliver a £45 billion boost to the region and create 190,000 jobs over the next 15 years.

"And we have done it sustainably in a way that will deliver Green growth and a better standard of living for our residents."

Mr Hart said the South West desperately needed investment in its infrastructure – in particular the rail network, rural broadband and a better alternative road route to the M5 which could be started immediately with the county council's 'shovel ready' plans to improve the A303 between Honiton and Ilminster.

And with the collapse of Flybe, it was vital that the Government took action to preserve the South West's connectivity to the rest of the country and Europe through road, rail, air and broadband.

Flybe was worth nearly £100 million to the local economy every year and the collapse had meant the loss of over 900 well-paid jobs directly with another 620 jobs indirectly at risk in support services.

In the last few years the airline's routes to London, Paris and Amsterdam had seen growth of 13 to 18 per cent with nearly 130,000 passengers using the Manchester route every year.

This had been a major contribution to local growth. But Mr Hart highlighted a new report from the County Councils Network or CCN which revealed Devon's growth – measured by gross added value – was 15.4 per cent over the last five years, lagging behind the England average of 16.7 per cent.

Even then, Devon was doing better than many county authorities with the average for the 36 county areas at 14.1 per cent.

The CCN report, by business and financial advisors Grant Thornton, reveals that councils in London are able to spend over 50 per cent more per person compared to counties on growth related services such as roads, enterprise parks and business support. The largest cities in England are able to invest 35 per cent more than counties.

The report says rather than focus on the north-south divide, government decisions should identify those places where the economic gap is greatest and focus investment decisions on closing that gap and levelling up local economies.

Mr Hart said: "Not only do we need more investment from the Government, but they need to give us the powers to do the work that is needed.

"I am clear that local government can operate more effectively and efficiently than other agencies. We know our own patches and we just want to be freed up to do what's needed.

"We are upbeat. We are talking to each other across the South West and we have exciting ideas and proposals which we have submitted to Government.

"Our MPs are behind us and we expect the Government to listen.

"Investment in the South West will give a definite return because we have the ability to do a lot for a little."

In the CCN report, Grant Thornton's head of local government, Paul Dossett, said: "The need for extensive infrastructure investment as part of the "levelling up" agenda is clearly well recognised by government. However, prioritising need is not as simple as transferring money to the "red wall areas". It requires proper analysis of need and recognition that there are significant disparities both within and between places.

"The need for local strategic oversight is vital. The government's commitment to capital spend is clear, but this alone is not enough. It must come with revenue support and a clear focus on locally led schemes that drive improvements in connectivity and productivity.

"Without proper analysis of need and recognition of the importance of local strategic leadership, a significant opportunity to make a real difference to communities will be missed."