A report released today says efforts to regenerate Sunderland are in vain and building a million new homes in London, Oxford and Cambridge to house northern workers is the only way to offer them the same opportunities as their southern counterparts.

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The study by think-tank Policy Exchange – which uses Sunderland as its main example – says poorer towns and cities will continue to get poorer if regeneration policies do not change.

"It is time to stop pretending that there is a bright future for Sunderland and ask ourselves instead what we need to do to offer people in Sunderland better prospects," it says.

"The evidence strongly suggests that there is no chance of people in Sunderland having the same opportunities as the people in Birmingham or Portsmouth, let alone the same chances as those in London or Oxford."

The authors, who admit their ideas could be seen as "plain barmy", add: "No one is suggesting that residents should be forced to move, but we do argue that they should be told the reality of the position: regeneration will not happen, because it is not possible."

But the report – entitled Cities Unlimited – has been condemned by Wearside's business leaders, politicians and public figures.

Coun Paul Watson, Leader of Sunderland City Council, said Wearside had reinvented itself as a centre for high-quality car manufacturing, as a new base for offices and more than 10,000 jobs had been created each decade to replace those lost in traditional industries.

"In the last year alone Sunderland attracted 1,000 new residents. Successful places such as Sunderland provide a counterbalance to the overcrowded South East.

"More people are now working in the city of Sunderland than ever before and this economic rebirth has catapulted the city up the national business league."

He added that Sunderland had been identified as the most digitally connected city in the UK, and that Wearside and the North East had seen a 50 per cent rise in the number of inward investment projects.

Wearside MP Fraser Kemp described some of the ideas in the report – put together by what is often called "David Cameron's favourite think-tank" – as "idiotic" and "ignorant."

"People ought to be promoting and bigging-up the city, not talking it down in this way." he said."For people in London to come out and effectively write-off the city is just ignorance."

Sharon Hodgson, Labour MP for Gateshead East and Washington West, said: "This report is totally bonkers. To suggest that we can successfully restore Sunderland's fortunes by encouraging people to leave the city defies logic. I very much doubt the authors have ever visited Sunderland because if they had they would know that the city is going from strength to strength. "

The report says it is important to be realistic about the potential for Sunderland and other cities to develop, and suggests local workers do not have as many opportunities as those with the same skills who lived elsewhere.

Sunderland-born agony aunt and TV presenter Denise Robertson was stunned by the report. She said: "The pretentiousness of this report takes away my breath. It is equalled only by the arrogance of those people who wrote it.

"In the last few years, the regeneration of the city has been a joy to behold. All I can say to the authors of this nonsense is 'Watch this space and prepare to eat your words'."

The report also refers to Roy Keane's now infamous comments which suggested that footballers would rather play for a smaller club in London than for Sunderland because the capital had better shops.

But Niall Quinn, chairman of SAFC, said: "Sunderland is a city with a rich and proud industrial heritage. Yes, there have been difficult times in the past with the massive changes enforced on the city since the loss of the shipbuilding and mining industries that lay at its heart, but it remains a special place, with very special people.

"The city, like the football club is making positive changes and moving forward but just like we brought new investors into the football club, sometimes outside assistance is needed to help things move forward."
The report says cities like Sunderland can then choose to spend money on regeneration schemes if they see fit.

But it also suggests the money may be better spent on schemes to attract highly-skilled workers from elsewhere, while helping local people to look for work in better placed locations in the south east.

Tim Leunig from the London School of Economics, who co-authored the report, said: "No doubt some people will claim that these proposals are unworkable, unreasonable and perhaps plain barmy.

"But the issue is clear: current regeneration policies are failing the very people they are supposed to be helping and there is no evidence that the trend will be reversed without radical changes."

"Those with lower levels of skills are trapped outside Britain's most prosperous region (the south east), particularly if they live in council housing.

"That cannot be right and we should not accept it."