Next month, David Miliband will kick off a tour of all eight core cities, starting in Newcastle. His core city summits will run through to November, just in time for him to receive the State of the Cities Report in December.

Behind the scenes, ODPM officials are thinking long and hard about the urban agenda, where there are a number of unresolved issues – including the role of cities, the shape of city-regions and the scale of local government reform.

The big challenge is this: how can we unleash the potential of our cities, without getting bogged down in fiscal and structural reform?

First, it’s clear that cities are rising fast up ODPM’s agenda. Analysis commissioned by ODPM shows that cities matter more than other places – especially the biggest conurbations. They are the economic hotspots of regional growth, and as such are best-placed to redress regional disparities.

What does this mean? If the core city conurbations are the main drivers of regional growth, they should be the prime spatial focus of regional economic policy. This means that RDAs need to give more prominence to the big conurbations; and that big cities are more important than smaller cities and towns. But the core cities need to be sensitive in their dealings with their neighbours – both inside and beyond their conurbations.

Which brings us to city-regions. Here, things are much less clear. ODPM likes the concept of city-regions, but they are a hard sell outside of the core cities and difficult to define. That’s because they are fluid economic areas, not neat political units. They don’t easily fit with existing boundaries and institutions.

So where next for city-regions? One: we need explicit incentives to encourage cross-boundary collaboration within city-regions. Two: we need to agree a shortlist of functions that are most suited for delivery at the city-regional level. And three: we need a selective approach, starting with the city-regions around the biggest core cities.

All of this can happen relatively soon. Cities and city-regions would also benefit from greater fiscal devolution, but big changes are still some way off. Some cities and even city-regions may also want to go for elected mayors, but not all of them. We mustn’t rush into new institution-building. City-regions do not necessarily require radical local government reform.

Finally, where does this leave current policy? One problem is that ODPM is cooking up a new agenda around cities and city-regions, but serving up a regional agenda at the same time. Meanwhile, the rest of Whitehall is focused much more on regions than cities. Miliband needs to help square this circle, by explaining that cities and city-regions are the way forward. The sooner he says so, the better.

Dermot Finch is Director of Centre for Cities.