There is far too much negativity and cynicism voiced about local government. Like any institution local governments can be inefficient, incompetent and even wilfully corrupt, but they can also be places of great creativity, purpose and innovation.

In a great collection of essays - The History Boys - the New Local Government Network reminds us of Chamberlin's Birmingham, London under the leadership of Herbert Morrison and Sir Archibald Salvidge's regeneration of Liverpool. These were amongst some of the great English leaders of municipal government, defined by their imagination and ability to get things done.

Last week European cities from Birmingham to Berlin were challenged by one of the world's leading Mayors to follow their legacy and develop the next wave of radical solutions to urban challenges.

The Mayors Challenge* is offering €9m for city governments across Europe with the boldest, most compelling new ideas. 

It's an initiative from Bloomberg Philanthropies, the personal foundation of the three-term Mayor of New York. Already a hugely successful businessman, over the past twelve years Mayor Bloomberg has added a reputation as one of the great civic entrepreneurs of our time.

In everything from public health to regeneration, policing to sustainability, digital technologies to mobilising citizens as volunteers, Mayor Bloomberg has led the city and its public services through a period of immense civic innovation.  New York is now looked to by cities across the world for inspiration and smart ideas.

Of course, it's not just in New York that a new wave of civic entrepreneurialism is flourishing. Last year the Mayors Challenge invited cities from across America to come up with solutions to big challenges and over 300 cities responded with a breath-taking range of innovations. The winning ideas ranged from initiatives to help kids from disadvantaged backgrounds expand their vocabulary to using big data to improve city services. Perhaps more important than the ideas was the political leadership and vision that backed them. 

Two years ago, our own Creative Councils programme elicited a similarly strong crop of ideas from England and Wales, and the five finalists are busily implementing new solutions in fields as diverse as renewable energy to supporting children in care. Look across Europe and we find similar stories, from Warsaw to Florence and beyond.

It would be easy to see the future for local government only through the prism of rising demands and diminishing budgets - with political leaders re-elected according to their ability to manage decline more or less gracefully.

A new generation of civic entrepreneurs would offer a much more optimistic account of the future, where city and municipal governments lead the innovation that is so desperately needed; mobilising citizens, businesses and non-profits alongside government.

The challenge has been made, the question is, who will respond?

* Nesta is the implementation partner for the Mayors Challenge