The All Party Parliamentary Urban Development Group, chaired by Labour backbencher Clive Betts, will carry out the probe ahead of the Lyons Inquiry into local government.
The Sheffield Attercliffe MP said: 'We know the cost of infrastructure is a key barrier to regeneration and economic growth in Britain's cities and towns.
'Local leaders need the power to access additional resources in order to invest in critical infrastructure and lever in private-sector investment,' he added.
The chief aim is to find a way to fill what Betts is calling, 'Britain's urban infrastructure gap', created due to the centralisation of funding by Whitehall.
What is also probable is that local authorities will find filling this gap tougher as the Comprehensive Spending Review, expected next year, is likely to announce a reduction in public expenditure, making the need for private cash essential.
The group's first session is expected in November, and will bring together MPs and peers from across Westminster.