I think we could do much worse than look to our history. We used to balance this far, far better.

As is, the TL;DR is it's the lack of real power and budget in the regions that's the problem. Whitehall, or a minister can simply overrule, and most of the big ideas originate there now, anyway. I really should write less. :)

In the olden days, if Manchester or Cumbria wanted to build some infrastructure project, including huge ones like commission a new power station, reservoir or tram route, they first needed a local mandate. At least some of these projects were promoted locally, with exhibitions, models and leaflets, though I don't know if this was a required step. For some things, like most of our older power stations etc, the city would set up a corporation for it. Then they sponsored a private member's bill in parliament, usually via the local MP, and it required a majority vote of MPs, not just a yes from some mandarins at the department and a minister's OK like today. No vote in parliament, no enabling act: no reservoir. I'm hazy on the details of it, I'm certainly no expert in this area, but Westminster was sanity check rather than originator of ideas. I think this process died in the 1974 local government reorganisation[1].

Where an idea did originate in Westminster - say a naval base or nuclear plant, I'm even more hazy, but I think that this then required local assent as well. So for something unpalatable government needed to find a way to sweeten the deal locally.

If we include some of the modern requirements for environmental impact, and proper public consultation I think we would have a chance of a system that works for most. If Leeds and Edinburgh decide amongst themselves a high-speed rail link between them would work, then once the councils get a local mandate they can try for parliamentary assent. Not wait for whatever scraps HS3 or other never-to-be-built pipe dreams are offered them.

This is roughly the process that gave the great city trams and railways, power stations and beautiful council estates or garden cities with parks and plenty of play space. Also road and rail links with large borders as they bought enough land for an expansion or two, rather than the sink estates and duct tape of the cheapest bid. I trust the county or city to decide where they want their treatment plant or power station far more than Whitehall. I trust the city to sometimes spend a little more to get something that's not an eyesore. Most of these things used to be local decisions! Different places had very different ideas.

Of course it wasn't perfect - this is the process that gave Manchester Hulme Crescents, probably the most nationally notorious tower block hell-hole ever built. Enough public consultation should ensure it's not "take this worthy offering, you insignificant little person" ever again. Still, we're not nearly so deferential as in the 50s. :)

We might then find that a few places start pushing to emulate Orkney and get off fossil, or start implementing combined heat and power and such like, maybe pushing to develop some local skills etc. We'd certainly have a little local flavour once again, even if a few ideas turn out to be mistakes.

I may as well wish for rainbows and unicorns as this would need an undoing of a lot of the centralisation of power and funding, and an unwinding of some of the neo-liberal market as solution for everything. I think we've become far too centralised for the health of the country, and it's badly hurting everyone everywhere. Yes, even London. If Edinburgh or Truro want to build more public housing, what the hell is it to do with Westminster if local taxes support it? (This gets to the core of why we became so centralised) I wish it could become a hot political issue, but seems vanishingly unlikely.

[1] Enacted 72, took effect 74: https://en.wikipedia.org/wiki/Local_Government_Act_1972