News

March 22, 2013

Heseltine economic plan gets the go-ahead

In his report, No Stone Unturned, Lord Heseltine made 89 recommendations on ways to boost economic growth. Now the government has announced that it is accepting the "overwhelming majority" of these recommendations and setting out how it will equip the UK to compete and thrive globally.

At the heart of the plan is a commitment to reverse excessive centralisation, freeing local areas from Whitehall control and giving businesses and local leaders more power and funding.

The government will:

• create a new Single Local Growth Fund from 2015 that will include the key economic levers of skills, housing and transport funding, with full details set out at the forthcoming Spending Round
• negotiate a local Growth Deal with every Local Enterprise Partnership (LEP), with the allocation of the Single Local Growth Fund reflecting the quality of their ideas and local need

Described as a "something-for-something deal", local areas will be challenged to put in place the right governance, pool resources and find match-funding from the private sector.

George Osborne said: "We asked Lord Heseltine to do what he does best: challenge received wisdom and give us bold ideas on how to bring government and industry together. He did just that, and that is why we are backing his ideas today."

Business secretary Vince Cable said: "The plans will boost the UK's competitiveness nationally and drive local growth through the local Growth Deals that we will be negotiating with every Local Enterprise Partnership."

John Walker, national chairman of the Federation of Small Businesses (FSB), welcomed the plan but suggested the government could have gone further. He said: "While this does represent a significant change in the way economic policy operates, and one we broadly welcome, we feel that the Government and Lord Heseltine have missed a trick by not looking at the way central government creates enterprise policy and how this can be decentralised to deliver a long-term and coherent approach.

"The FSB believes a single institution, similar to the Small Business Administration in the US, would help to provide this much-needed focus and should be looked at."