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Heseltine calls for localised funding boosts

Lord Heseltine has called for government to take a localised approach to funding for economic growth.

He also calls for political parties to set out their plans for airport capacity in their election manifestos so construction contracts can be let thereafter.

In a new report, commissioned by Downing Street, he says that people think the UK “does not have a strategy for growth and wealth creation”

His review makes 89 recommendations to help industry.

It includes calling for £49bn from central government to the regions to help local leaders and businesses. He argues that local authorities have been “relegated to service providers” as government thinks too centrally.

Lord Hesletine has also called for the Davies report into airport capacity to be done sooner to avoid “three more years of inertia”, and inject more urgency and” therefore confidence for all those we want to invest in our economy”.

He says “it will not be possible for the Government to claim credibly at the next election that it has not made a decision or reached a preference about a third runway at Heathrow”.

“{Davies} should be asked to analyse all of these options and provide his advice in the next year, at which point the government should set out its preference.

“All political parties could set out their positions in their next manifestos.

“In the meantime preparatory work could commence, with a commitment that no construction contracts would be let until a mandate had been secured at the next general election.”

The report also highlights the importance of construction for growth and jobs, and investment in skills, infrastructure, capital equipment and R&D.

He says the current procurement process for public infrastructure is “time consuming and complex”, adding that “few pension funds, except for the largest, have the expertise or time to dedicate to it”.

He also calls for a six-month planning deadline to be introduced on non-complex schemes.

“It should not take longer than three months to reach conclusions on the issues. So any application still undecided after six months should automatically go before the Planning Inspectorate,” he says.

The former head of the Department of Trade and Industry in the 1980s, said government should provide growth funds to new Local Enterprise Partnerships (LEPs) in the coming years.

It follows a recent CBI report calling for a focus on regions outside the ‘usual suspects’ of London and the south east.

The CBI welcomed a focus on fostering better understanding and relationships between the public sector and its commercial partners, saying it highlights the need for powerful governance structures to support private sector growth throughout the UK.

Its report set out what needs to change to ensure that the structures in place, such as Local Enterprise Partnerships (LEPs), “unlock the pockets of private sector potential which exist in all parts of the UK.”

John Cridland, CBI Director-General, said: “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.”

Chancellor of the Exchequer George Osborne said: “I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring Government and industry together. He has done exactly that. This is a report bursting with ideas and we will study it very carefully.”

Funding streams
4 year spending period (£m)
   
Skills £17,435
Local infra£14,821
Employment£5,466
Housing £6,800
Business support£2,939
Innovation£1,611
Total £49,073

The report calls for:

  • a major devolution of funding
  • making a smaller and more skilled government machine
  • enhancing the standing of Local Economic Partnerships (LEPs) to bring together private and public sectors
  • more government leadership for major infrastructure projects
  • a role for employers in education
  • government to move faster on airport strategy
  • six month planning deadline

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