Heseltine Growth Review – a summary

Yesterday, former deputy prime minister Michael Heseltine published “No stone unturned in the pursuit of growth”, his personal report on how economic growth can be more effectively encouraged in the UK. Over the 233 pages the report, which was commissioned last March by the Prime Minister, provides a comprehensive plan for action for the Government.

The report’s central message is that the drivers of the economy – business, central government and local leadership – “should be organised and structured for success”. To achieve this, Lord Heseltine believes that Government need to ensure the following:

– local communities empowered and incentivised to collaborate for growth

– a rejuvenated partnership between the public and private sectors involving both local and central government

– a dynamic, strategic central government with wealth creation at its heart, working more effectively in the national interest to support wealth creation and embracing a culture of both public and private sector decision making

– a private sector led business support infrastructure accessible everywhere

– a system for producing the skills that our economy needs now and in the future

– businesses, irrespective of size, sector or location which are engaged with their wider communities and ambitious to grow.

Central to delivering this are “enhanced roles” for both Local Enterprise Partnerships (LEPs) and the local chambers of commerce. To those who argue that both these networks do not have the capacity to deliver Lord Heseltine says in what must be considered as one of the most powerful statements for localism.

“I know critics will say that these bodies do not in all parts of the country currently have the capacity to deliver my vision. I have sat in the committees of government and heard those arguments many times. Indeed they are a central part of our problem. Because the scepticism is so deep about empowering local organisations, whenever faced with a problem the solution has been to take central control

I am not interested in a debate about the present talent or energy of local organisations – although I would like to say that very many of those that I visited for this review were every bit as capable as those in the centre of government. But that is not the point. If some organisations are not up to the job the solution is to improve them, not to centralise further. No company with an underperforming subsidiary would move all its activities to head office.
It is important that local people are themselves satisfied that they have, in their areas, the quality of leadership needed for a real economic partnership with Whitehall. The LEPs and chambers are essential building blocks in our competitiveness agenda. Without such local empowerment we will not transform our national performance.”

Lord Heseltine makes some 89 recommendations which cut right across Government, but those which will particularly interest local government are:

• That Government set out clearly a comprehensive national growth strategy which is steered in its implementation by a National Growth Council, chaired by the Prime Minister
• Operational responsibility for implementation of the National Growth Strategy should rest with a designated minister, supported by a secretariat
• The creation from 2015/16 of a five year “single pot” comprising of significant central government funding streams for skills, infrastructure, employment support, housing, regeneration and business support budgets which are currently worth £49 billion over 4 years, or £58 billion over 5 years
• LEPs develop their own tailored local economic plans and complete from 2015-16 for a share of the single national pot to support growth over a 5 year period
• Government should work with local authorities to identify and publish details of all surplus and derelict public land so that LEPs and local authorities can collaborate to bring this land back into reuse in support of the local economic strategy
• BIS must set out a clear statement explaining how they and other government agencies will work with LEPs and the devolved administrations to better connect national strategy with local initiative
• The Government and the private sector should work together to strengthen the existing network of local Chambers of Commerce which should 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 together with a corresponding restructuring of the regulatory regime
• Local authorities should have a new overarching legal duty to have regard to economic development in the exercise of all their activities and functions and should be required to collaborate economic development
• All two-tier English local authorities outside London should pursue a path towards unitary status and local authority council members should be elected using the same electoral cycle across England where the whole council is elected at the same time every four years
• Legislation should be passed to enable combined local authorities, and other combinations of authorities, that wish to elect a conurbation mayor
• The Planning Inspectorate should be given powers to investigate planning decisions proactively
• Government should consider the effectiveness of Local Development Orders and extend their use after consultation and consider using Special Development Orders to speed up specific planning decisions of strategic significance
• All failing schools should be subject to the intervention process forthwith with local education authorities using their powers to intervene if the head teacher and governors fail to act. If local authorities delay, central government should intervene
• Business engagement should be incorporated far deeper into the school curriculum and in all boards of governors in secondary schools
• Each LEP should incorporate skills needs within their local economic plans and all FE learning providers must consult and agree their provision with LEPs to ensure that the courses they offer to 16-18 year olds reflect local labour requirements
• LEPs working with local authorities, employers and other local partners should develop proposals for reducing NEET numbers as part of their local economic plans
• In developing their economic plans, LEPs and chambers should consider ways in which leadership and management capabilities in local businesses can be raised

Outside national politics the report has been warmly received across the spectrum:

Brendan Barber, the out-going TUC leader said the “refreshing new strategy for growth proposed underlined the interdependence of the public and private sectors and must be embraced across government in order to work”

John Cridland, director general of the CBI, also welcomed the review. “It identifies a wide range of levers capable of promoting growth, which the CBI has been calling for some time” adding that “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”.

Sir Merrick Cockell, Chairman of the Local Government Association, said: “Lord Heseltine is absolutely right to champion the role of local areas in delivering growth. This report provides clear evidence that giving local areas more power and funding to nurture business opportunities is absolutely essential to national economic recovery”

Sir Merrick also added his support of Lord Heseltine’s idea of “bringing money from different Whitehall departments into a single pot to fund skills, transport and support for SMEs. Local economies are complex and national funding streams are not always as coordinated, flexible and responsive as we need them to be in order to get projects off the ground in good time”.

Meanwhile in Westminster and the media bubble surrounding it much has been made to identify where the report might be critical of the Government’s own plans and polices on growth and indeed past decisions such as the abolition of the Regional Development Agencies. This was the subject of the usual vigorous exchanges at yesterday’s Prime Minister’s Question Time.

Anticipating this reaction Lord Heseltine says in the report’s overview chapter that:

“This report makes 89 recommendations. Some will say they are criticisms. That is exactly the wrong approach. To invite criticism is a sign of strength. To accept it is a sign of confidence”.

Responding to the report the 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.”

Business Secretary Vince Cable also welcomed the report and added that:

“Lord Heseltine’s findings show where government can improve its performance in delivering better interventions. We will now need time to consider its numerous recommendations and will respond in the coming months.”

However, given the Chancellor’s Autumn Statement is scheduled for 5 December the Government will probably come under pressure to respond sooner than that in some shape or form. Indeed, Lord Heseltine has helpfully provided the Government with a timetable for implementing his recommendations which envisages a national growth strategy published by May 2013.

It will hearten the many localists in local government (and indeed elsewhere) that the inside cover of Lord Heseltine’s report contains a portrait of Joseph Chamberlain accompanied by the following quote:

“Unless I can secure for the national results similar to those which have followed the adoption of my policy in Birmingham…it will have been a sorry exchange to give up the town council for the cabinet”

Local Government Information Unit will publish a more considered and detailed policy briefing for members on the report next week. To view all LGiU member briefings click here.

This post is written by Mark Upton, LGIU Associate, and Consultant at Public Policy Strategies, www.publicpolicystrategies.co.uk

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