20 Mar, 2013

City growth

Reacting to today’s Treasury response to Michael Heseltine’s report No Stone Unturned  the think tank IPPR North  welcomes the government’s commitment  to greater economic decentralisation, but questions whether it is goes far enough and is backed with enough cash.

While 81 of Heseltine’s 89 recommendations are being taken forward, more than a quarter of these have only been partially accepted.  Meanwhile the money available falls well short of Heseltine’s hoped for £49billion. Also few of the changes are likely to come in effect before the next election, limiting the ability of these measures to bring about urgently needed economic recovery.

On the Single Local Growth Fund, Ed Cox, Director of IPPR North, said:

“Lord Heseltine said a fund of £49 billion was needed.  Government sources are now suggesting the size of the pot will be in the ‘low billions’  – with a lot of that not released until after the next general election.  This shows the government response has fallen far short of the Heseltine blue-print – and that is bad news for the British economy.

“We are also concerned that the whole process of how the share-out of money between individual LEPs is too centralised and potentially unfair to some LEPs”.

On infrastructure, Ed Cox said:

“The government’s response recognises that infrastructure needs to be spread more evenly around the country, but it only name-checks big infrastructure projects in London and the South East and fails to address the nearly 100-fold disparity between infrastructure plans for London compared to the North of England[1].

“We welcome the opportunity for LEPs to borrow large amounts of money up to £1.5 billion for a nominated infrastructure project.  But again the process for releasing the money leaves power at the centre.”

On changes to local government, Ed Cox said:

IPPR North welcomes the idea of democratic underpinning of LEPs through combined authorities and metro mayors – it something we have promoted for a long time. In the meantime introducing employee representatives to LEP boards would add an important voice. In the area of skills for instance, employee representatives can make sure local policy and strategies support better wages and job mobility.”

On inward investment:

“The Government’s response reiterates its position on inward investment that the UK is “open for business” but being open isn’t enough and our UK First? report out today shows that the changes to the UK inward investment institutions since 2010 have not worked well for the regions. While the numbers of new projects supported by FDI are largely holding up a high level around London and the South East, other parts of the UK have experienced a decline.”
Credit: onrec.com

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