We describe a novel two-layer variant of the Gaussian-based multiconfiguration time-dependent Hartree (G-MCTDH) approach which improves on the performance and convergence properties of quantum propagation based on variationally evolving frozen Gaussians (FGs). While the standard scheme uses factorizable multi-dimensional FGs, the present approach combines these into flexible, MCTDH-like single-particle functions. At the same time, the expensive variational evolution of the Gaussian parameters is reduced to low-dimensional subspaces. As a result, the novel scheme significantly alleviates the current bottleneck to accurate propagation in G-MCTDH and its variational multiconfigurational Gaussian (vMCG) variant. Since the first-layer single-particle functions are chosen to be orthogonal, the present approach can be straightforwardly combined with existing multi-layer MCTDH schemes.