The real fix is multifold, this is just ignoring the real problems (and let's be fair, no fix will make England a perennial powerhouse - they never have been):
- Improve grassroots coaching and infrastructure - give kids a place to go play footie after school
- Implement Absolute Squad limits as well as limits on number of kids in the Academy - I.E. Loans count against your limit. Totally off the top of my head (24 senior squad, 4 reserve places, 4 for loans on top. Then some academy limits).
- For above you would only be able to swap reserve places during transfer windows or for injury (think of reserve as injured reserve + players that have almost broke through).
- Convince the youth to go on loan to foreign leagues - maybe even go play there if they're not getting a game!
- Eliminate home-grown rules
I think 1 and 2 are the most vital. The biggest problem in England is that teams like Chelsea and City buy any player that looks like they may have a good future and they end up sitting on the bench and stalling their development. This is especially true of highly rated English talent because of the home grown rules.
So City see a kid like Barkley and think - he could be something and he's English! So they buy him to comply with the home grown rules. Then, he's not quite good enough to get into the first team (Barkley is, bear with me), so he sits on the bench from years 20-23. Then he ends up getting sold to Villa after City see another gem. Barkley and the English national team are much better served if he stays at Everton. Everton would rather not sell him...but if a silly big comes in, it's hard to resist. Eliminate the home grown rules and City no longer have any desire to spend silly money until Barkley is 100% ready for their first team.
City have the money, and squad size is no limit to them. So home grown rules tie in with no squad limits to absolutely ruin high-potential kids between the ages of 19-22. If we limit squads, and remove their impetus for wanting English players, then Barkley never gets sold and develops naturally. Think of how many young English players that would have helped?