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November 02, 2012

Heseltine report suggests local enterprise is key to economic growth

Lord Heseltine has set out an economic plan to improve the UK's ability to create wealth. He makes the case for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector.

The report, No Stone Unturned in Pursuit of Growth, makes 89 recommendations that aim to create the conditions for growth. At the heart of the proposals are measures to unleash the potential of local economies.

Lord Heseltine said: "What we need is a new partnership between the private and public sectors, between local communities and central government."

His recommendations include:

  • The government to set out a comprehensive national growth strategy which defines its role and that of local leaders and the private sector in the creation of wealth.
  • A National Growth Council to be chaired by the prime minister.
  • Local Enterprise Partnerships (LEPs) to develop their own tailored local economic plans. From 2015-16 they would compete for a share of a single national pot to support growth over a five-year period.
  • Government and private sector to work together to create a strong, locally-based business support infrastructure.
  • The Chambers of Commerce to have an increased role.
  • A restructuring of the regulatory regime, and the planning system to be injected with greater urgency.

Chancellor of the Exchequer, George Osborne, said:
"I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring government and industry together. He has done exactly that. This is a report bursting with ideas and we will study it very carefully."

Responding to the recommendations, Simon Walker, director general of the Institute of Directors (IoD), said: "We welcome the idea of encouraging more devolution to the local level."

John Walker, national chairman of the Federation of Small Businesses (FSB), said: "Lord Heseltine raises many good points about letting people get on with running their business. The FSB has said that Local Enterprise Partnerships (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."