Heseltine Review argues for greater devolution of funds, local partnerships and competitive bidding as foundations for economic growth

Lord Heseltine’s economic growth plan, No stone unturned in pursuit of growth has just been published.

In it he calls for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector.

Heseltine was in large part the architect of City Challenge and the establishment of Urban Development Corporations, as well as the more recent Regional Growth Fund, and it is perhaps no surprise that these models lie at the heart of his proposals for kickstarting economic growth in the UK.

His independent report argues fiercely for the devolving of government budgets and an extension of the principle of competitive bidding from local partnerships as the foundation for unleashing local growth and entrepreneurialism.

Single funding pots should be established with spending decisions made by local partnerships bidding competitively into such funds. For example, if central government spending in just the following six areas were combined — skills, local infrastructure, employment support, housing, business support services, and innovation and commercialisation — this would result in over £49bn being available for local bidding.

Will Heseltine’s report be influential in setting new policy approaches for the remainder of the present term of government and beyond?

Well, that’s anybody’s guess, but certainly based on his past record Heseltine does have the clout to transform how things are done. Place-based regeneration funds such as City Challenge shaped regeneration policy and practice for three decades; the establishment of Urban Development Corporations was arguably of even greater impact.

Those who were directly involved in  schemes such as City Challenge, or who recall the powers handed over to UDCs, may well take a different view of the recommendations (89 of them) in Heseltine’s report.

What is sure, however, is that we are about to see a major rethink in how, where and by whom economic development priorities are decided and funds allocated.  And it is likely that Local Enterprise Partnerships will be central.

Indeed, Andy Street, chair of the Greater Birmingham & Solihull LEP has already written to the Prime Minister setting out a case for Lord Heseltine to work more closely with GBSLEP in implementing growth plans. It is understood that Heseltine has welcomed the suggestion. Watch this space.

  1. Chris Newis Reply

    It’s not often that I praise tories but Heseltine is worthy of comment. We are probably unaware just how much he influences our work – he is for example the proprietor of Social Enterprise magazine. But his claim to fame is more significant than that as he invented “regeneration” as we know it. After the Toxteth riots, Heseltine argued in Thatcher’s cabinet that repression was not enough and produced a paper – “IT took a riot”. This led to the private sector becoming involved in regeneration through City Challenge – bringing in the competitive element to bidding for funds which has survived to this day and which was seen in RDAs and now in LEPs. Heseltine also signed an order in chambers in 1992 ish to allow the voluntary sector to access Objective II funding and ERDF and ESF directly. Clearly the most innovative Secretary of State for the Environment that we have ever had.

    • Alun Severn Reply

      “Clearly the most innovative Secretary of State for the Environment that we have ever had.”

      Chris – thanks for reading & commenting…

      I never thought I would live to hear it said…

      BUt UDCs… Innovative? Accountable? Good for local communities?

      There some interesting-ish analysis of the report here, in Regen & Renewal:

      http://bit.ly/SjuQQ3

      It makes the point that in its 200pp and near-fifty year span Heseltine’s report is a little selective in the stones it does turn…

  2. Ted Ryan Reply

    As I plough through the 186 pages of the report, not including the appendix, I cannot share people’s enthusiasm about the headline terms of devolution and local budgets.
    Lord Heseltine makes it very clear that it is the Local Enterprise Partnerships are the ‘local’ organisations to head up this devolved development approach, in partnership yes, but the Chamber of Commerce and Trade Associations and local leaders take precedence with social enterprises and VCS hardly mentioned
    The Chancellors autumn statement on Wednesday 5th reinforced this approach, stating that “The Government welcomes this report and will seek to implement as many of the recommendations as possible.”

    While the Government has, for the moment ‘parked’ the restructuring of the Civil Service, the abolishment of two tier authorities in favour of unitary authorities throughout England and the appointment of ‘expert’ private sector advisors to develop and oversee major Government projects they have adopted policies that will have a fundamental impact on the sector in the near future.

    Skills development for over 19yrs, FE providers discussing 16-18 curriculum, European Funding and economic development funding, as well as other infrastructure policies all become the responsibility of the LEP’s.

    Funding will be provided to develop their capacity to manage and develop their economic plans and their relations ships with local authorities, who will undertake ‘secretarial’ activity and provide financial governance and regulatory structure.

    Lord Heseltine only talks of private and public sector structures in developing economic activity; social enterprises, VCS organisations and community groups are mentioned, about six times throughout the report and do not feature in any discussion concerning economic development on a local level; local means LEP and we as a sector need to recognise the changes that are taking place and the potential impact they will have on our sector.

    • Alun Severn Reply

      Ted, You’ve done a good job of reading this closely. I would agree with you — unlike other (in fact most) recent policy statements social enterprise and the wider third sector doesn’t even register on Heseltine’s radar.

      On the other hand, the LEP is at last doing more to involve SE and the third sector….

      • Ted Ryan Reply

        Alun, While Lord Heseltine does not mention or acknowledge SE and VCS SME’s neither did the Chancellor in the Autumn Statement. The Greater Birmingham LEP document Strategy for Growth does not mention the sector.
        My fear is they involve and may recognise the sector as businesses but do not really understand it’s potential for involvement in a growth agenda because they do not understand the economics of the sector.
        The question is – How does the sector make its economic impact argument in an environment dominated by the belief that private sector thinking and investment is the only answer to our current economic decline?

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