No Stone Unturned – this week’s report from Lord Heseltine for the Prime Minister, HMT and BIS – covers a very wide range of matters related to non-macro economic policy. It talks about a national-to-local approach for economic development, with an emphasis on a renewed spatial (localism) and industrial (sector supporting) policy. There is a lot to applaud. There is also a lot of deja vu. It is good to see some sensible ideas being brought back that were lost in 2010-11. (It is still such a shame that the integrated expertise lost with the closure of the RDAs will be expensive and difficult to re-learn). Essentially, it offers the potential for some real impact from localism by re-recognising the imbalance of economic performance between London and the rest of our places.
The report recommends changes to central government organisation for development, including merging of existing functions and funding into a “Single Pot” for local development. (This pot is estimated at £49 billion, taking £17bn from/for skills, £15bn from/for infrastructure, and other billions for employment and business support, housing, innovation and commercialisation).
Locally, Heseltine advocates a rationalisation of local government into a universal unitary system with a stronger responsibility for local economic development. It also suggests greater capacity and funding for Local Enterprise Partnerships (LEPs) but, recognising their variable performance to date, it also suggests a review of ‘borders’. This seems to infer mergers into more sensible functional economic areas that can bid to the new ‘single pot’. Competition for funding is expected to drive investment ideas to a higher level of local impact. A requirement will be a good Strategic Plan and state of the art evaluation. (Strategic Economics can help with those!).
Finally, the ‘No Stone Unturned’ report talks about Local Growth Teams in government (Government Offices reborn?) and wants a bigger role for Chambers of Commerce. It has an interesting time line too, with much to be done over the next few months and through to 2014. It will be interesting to see which of the 89 recommendations the government accepts and, importantly, implements. If it ends up with a permanent but flexible development structure that is focussed on the long-term competitiveness of our businesses and places, this economist will shout a huge “hurrah”. In the short term, please excuse my scepticism.