Heseltine – masterstroke or monster?

On Monday this week the Government produced its formal response to the “No Stone Unturned” report on growth released by Lord Heseltine on 1 November 2012. The report focused on 89 recommendations that, if implemented, would empower local areas to take charge of their development with significant powers and funding devolved from Whitehall. Chambers of Commerce were also highlighted as being prime organisations in this work and there were proposals for an enhanced legal status for Chambers to undertake statutory duties.

The joint response signed by the Chancellor and the Business Secretary, agreed with 81 of the report's original 89 recommendations. Although, as ever on closer inspection many of these have been trailed more than once in the past as “new” policies. The main emphasis is on beefing up local resources with a Single Local Growth Fund which, from April 2015, Local Enterprise Partnerships can bid for funds from to help deliver local strategic plans for growth. This pot of money was originally set at over £50bn in Heseltine’s report but in reality this will be significantly reduced – final details will be delivered in the Spending Review in June. Some transport, housing and skills funding will be incorporated into this.

Legislation will also be created to resurrect the idea of elected mayors but as opposed to the idea that was rejected in many areas in last year’s referendum, this second bite at the cherry will allow for conurbation-wide mayors (ie an elected mayor for Greater Manchester should that be decided is best).

Amongst the other recommendations of note are several highlighting the setting up of industrial strategy partnership councils and forging closer links between technology businesses and centres of research. Infrastructure investment and the ability to quickly start projects were also highlighted, as well as the confirmation of the setting up of a UK Business Bank and other measures to ease access to affordable funding for business.

In the original report Chambers of Commerce were highlighted as playing crucial roles in delivering the above and would have received enhanced legal status similar to public law Chambers that are in place in Sweden and other countries. These proposals were rejected by government but the role of Chambers as a first stop shop for business enquiries was highlighted along with the need for more businesses to be able to join and access the services on offer from the 53 accredited Chambers in the UK network of which Greater Manchester is the largest.

We await the continued delivery of these recommendations and will monitor the immediacy of their impact on business. There is an obvious time lag on these recommendations and some are post the next election so conceivably will never see the light of day again. The real danger is that organisations now become transfixed with bid chasing rather than delivering what is needed now, urgently on the ground to support business. If this were to happen then government policy would have helped create the very behavior that it took exception to with the RDAs but at a much greater local level. If governed and directed right there is much to gain from this. By taking on the vast majority of Heseltine’s recommendations the government could have played a masterstroke or created a monster.