Lord Heseltine has urged the Government to adopt a radical National Growth Strategy to stimulate the economy.
In a new report commissioned by Downing Street, he calls on the Government to set up a new National Growth Council, headed by the prime minister, to draw up a long-term national plan with “concrete commitments” so it could be held to account.
The conservative peer also wants to see radical plans adopted to devolve power and budgets to the regions.
His report, entitled “No Stone Unturned in Pursuit of Growth” wants to see a single fund of some £49bn, pooled from existing Whitehall budgets, for projects such as housing, skills training and infrastructure.
This huge cash pot would be made available for regions to bid for through their fledgling Local Enterprise Partnerships, and then spent on agreed local economic plans.
Last March the Government asked Lord Heseltine to look at ways of boosting economic growth. But his report, published today, will make difficult reading for the Government.
He said: I have not left the Government with easy decisions. Some may paint my report as a set of criticisms - that is the wrong approach. To invite criticism is a sign of strength. What I have proposed is an opportunity on a grand scale.
Among 89 recommendations he also calls for a powerful development corporation for the Thames Gateway and calls for district councils to be replaced by unitary authorities.
Chancellor George Osborne said the report provided food for thought.
"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," he said.
Mike Leonard, director of the Modern Masonry Alliance said: “We welcome Lord Heseltine’s rally call for jobs and growth.
“We completely concur with the need for regional growth reducing our dependency on London and the services sector.
He added: “To date there has been a lack of emphasis on a manufacturing and construction-led recovery. Too much of the Government’s plan is based on hope rather than certainty
“Heseltine used the war analogy, had we applied the same inertia to winning the war we would have lost!
“We need to get off the fence and provide the funds to get building 25,000 public rented homes across the UK now.”
Key recommendations
- The Government to set out clearly a comprehensive national growth strategy which defines its role and that of local leaders and the private sector in the creation of wealth.
- A National Growth Council, chaired by the Prime Minister.
- Each Whitehall department to commit to play its role in support of the national growth strategy, including how it will work with its key sectors. They will be held to account for this by the National Growth Council.
- Local Enterprise Partnerships (LEPs) to develop their own tailored local economic plans. From 2015-16 they 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.
- Government and private sector to work together to create a strong, locally based business support infrastructure. The Chambers of Commerce would have an increased role building a stronger relationship between businesses and LEPs in their area.
- All sectors of industry to have a formal relationship with a government department, building on the examples in the automobile and aerospace industries.
- Regulators to be required to take account of the economic impact of their decisions. This would include a restructuring of the regulatory regime.
- The planning system to be injected with greater urgency.
- Government procurement to be improved by employing an experienced chief procurement officer in every department.
- Departmental Non-Executives to be given an enhanced role in departments while a cross-government management information system should be put in place.
Photograph courtesy of Financial Times.
