Heseltine Review receives cautious welcome

Hannah Jordan
Thursday, November 1, 2012

The business sector has given a cautious welcome to Lord Heseltine's review into UK economic growth.

The review, No Stone Unturned in Pursuit of Growth, sets out 89 recommendations to government for delivering growth to the UK.

Commissioned in March this year and unveiled by former deputy prime minister Lord Heseltine in Birmingham this week, the review urges the government to produce "an overarching and long term National Growth Strategy with concrete commitment against which it can be held to account".

Among the recommendations is the allocation of up to £250,000 to Local Enterprise Partnerships (LEPs) over the next two years to help them drive local economic growth. From 2015/16 LEPs would then be encouraged to bid for funds from a single Governnment funding pot of devolved departmental funds, to support their growth plans over a four-year period.

Lord Heseltine also said that where local authorities shared a functional economic market area, they should be legally obliged to collaborate on economic development.

Other recommendations include the establishment of a National Growth Council, chaired by the prime minister with a focus on "driving growth and wealth creation"; collaboration between central government and the private sector to create a stable locally-based private sector business support infrastructure; the recruitment by government of a chief procurement officer to lead procurement and delivery of major projects; and a commitment from government to allow areas outside of London and the South East greater opportunity to contribute to national growth.

Speaking at Birmingham Town Hall Lord Heseltine said: "We need to reinvigorate that local leadership across our country, including greater devolution in London itself. And Whitehall’s ambition should be to do less but do it better.

"Of course we don’t need to change. We could carry on as we are. I believe that would be unacceptable. I do not detect an appetite in this country for so unambitious a future. And certainly the government itself is not prepared to stand by whilst other nations overtake us."

Commenting on the review Federation of Small Business (FSB) national chairman John Walker said Lord Heseltine had raised many good points about letting people get on with running their business but warned that some aspects did not represent smaller businesses.

He added: "The FSB has said that LEPs should discuss growth ideas with local stakeholders and should have more resources to identify local economic shortfalls.

"However, the boards of LEPs must represent all sizes and sectors of local businesses otherwise they will fail. The FSB disagrees that chambers should be legislated as they do not represent all businesses – particularly self-employed and micro firms."

The FSB also criticised Lord Heseltine’s review for failing to consider international examples such as the US Small Business Administration (SBA) mode. "Instead of pooling enterprise funding and central staff, Lord Heseltine should have looked at good practice from across the world, such as the SBA, and recommended a better policy making machine and an agency which co-ordinates small business policy such as lending, procurement and exporting."

CBI director general John Cridland welcomed the report particularly recommendations on procurement. He said: "Lord Heseltine’s review highlights the need for powerful governance structures to support private sector growth throughout the UK.

"The focus on fostering better understanding and relationships between the public sector and its commercial partners is welcome. A key part of this is the public sector developing better commercial skills and engagement, and better procurement practices."

The government will consider the recommendations over the next few months.

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