Heseltine: Give regions strength

Devolving economic policy and public spending to Local Enterprise Partnerships, and approving major infrastructure projects such as Atlantic Gateway are among Lord Heseltine's far-reaching suite of recommendations.

Heseltine makes 89 recommendations in the 233-page report, entitled No Stone Unturned, published today.

Boosting LEPs with a new funding and decision-making model far exceeding their current status – effectively relaunching them with a new £58bn pot in 2015 – is a central theme to his review. He said the LEPs – there are five in the North West – should be free "to develop their own tailored local economic plans" because "big government does not work".

Heseltine explained: "From 2015-16 [LEPs] would compete for a share of a single national pot to support growth over a five-year period. Under the current spending review this would account for £49bn of central public spending on skills, local infrastructure, employment support, housing, business support services and innovation. This would be supplemented by the current approximate £9bn of European common strategic framework funds."

He also encourages other cities to follow Manchester's example by creating a combined authority.

There are several contributions from local sources in the review, including an unattributed comment from Greater Manchester offering a view on local government control.

The Greater Manchester commentary said: "A second wave of devolution from central government should build on [the combined authority] and allow Greater Manchester to go much further, providing the conditions necessary to meet our potential and create over 75,000 jobs over the next five years. It should increase local decision-making, driving growth in key sectors, and flexibility for greater integration of business support, trade and investment."

Heseltine inevitably mentions lessons learned from his work after the riots in Liverpool in the early 1980s when he "visited the city most weeks for 18 months" with a "profound benefit to my departmental responsibilities".

He suggests: "It would greatly improve ministerial understanding of the policies of place if each cabinet minister were associated with two LEPs, visiting. They would be expected to visit these LEPs at least every two months."

In a chapter on airport expansion, focused mainly on a discussion of a new runway for Heathrow, he supports the Peel-led proposals for more than a dozen developments along the River Mersey and Manchester Ship Canal.

He said: "These [airports] are not the only examples of major infrastructure issues that need firm decisions by government – the regeneration of the Atlantic Gateway to make best use of the complementary economic weight of the Liverpool and Manchester city regions is another. These decisions should be taken urgently as part of our determination to be seen as an attractive place to invest."

Download the report in full here

Responding to the report, Robert Hough, chairman of the Liverpool City Region LEP, said: "Nobody knows and understands a local economy better than the businesses and entrepreneurs who make it work through investment leading to the creation of jobs and wealth.

"Lord Heseltine knows Liverpool city region well. He knows the unique membership model of our LEP well too, and his report's recommendations must inform future economic growth strategy based on local opportunities, local solutions and strong local partnerships making a compelling case for more private and public sector engagement."

Heseltine, who consulted local regeneration leaders widely in drawing up the report – there are 14 pages of names of those he spoke to – also recommends formal industry sector links to government such as those in automotive and aerospace and calls for greater use of chambers of commerce in shaping economic policy.

John Cridland, CBI director-general, said today: "I welcome Lord Heseltine's review. It identifies a wide range of levers capable of promoting growth which the CBI has been calling for for some time, from education to infrastructure, and from planning to access to finance. It is a thoughtful contribution to the growth debate.

"His key point is that we need more local action and leadership, which must be right.

"To successfully rebalance the economy towards private sector growth, every part of Britain needs to grow – we mustn't just rely on the usual suspects of London and the South-East."

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