Press release

Government publishes response to Lord Heseltine report

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Government announces it is accepting the overwhelming majority of the recommendations

The Government has today published its formal response to Lord Heseltine’s comprehensive report, No Stone Unturned.

Lord Heseltine made 89 wide-ranging recommendations to the Government, across areas of public policy that affect economic growth. Today, the Government announced it is accepting the overwhelming majority of these recommendations and setting out how the Government is addressing the priorities Lord Heseltine identified, equipping the UK to compete and thrive in the global race.

At the heart of this is action to reverse excessive centralisation, freeing local areas from Whitehall control and giving businesses and local leaders the power and the funding to do what they need to achieve their potential.  The Government will:

  • create a new Single Local Growth Fund from 2015 that will include the key economic levers of skills, housing and transport funding, with full details set out at the forthcoming Spending Round;
  • harness the power of competition to get the best from places, negotiating a local Growth Deal with every Local Enterprise Partnership (LEP), with the allocation of the Single Local Growth Fund reflecting the quality of their ideas and local need.

This is a something-for-something deal and local areas will be challenged to put in place the right governance across local authorities, pool resources, and find match funding from the private sector.

The Chancellor of the Exchequer, George Osborne said:

We asked Lord Heseltine to do what he does best: challenge received wisdom and give us bold ideas on how to bring government and industry together.  He did just that, and that is why we are backing his ideas today.

Business Secretary Vince Cable said:

We have grasped the challenge that Lord Heseltine’s report posed to Government and accepted the vast majority of his recommendations. The plans will boost the UK’s competitiveness nationally and drive local growth through the local Growth Deals that we will be negotiating with every Local Enterprise Partnership.

In line with Lord Heseltine’s report, today we have also announced a package of wider support that is a big vote of confidence for our industrial strategy, particularly the aerospace, automotive and agri- technology sectors. This support not only gives businesses certainty, but shows the Government is determined to back those sectors where Britain can deliver and compete on a global scale in partnership with industry.

Deputy Prime Minister Nick Clegg said:

Over the last few decades, central government has systematically deprived local government of control and power. Only half of the money spent locally is raised locally, robbing our cities and regions of both the power and incentives to drive local growth.

That is why we’ve already allocated £2.6 billion through the Regional Growth Fund, forecast to deliver and safeguard 500,000 jobs and £13 billion of private investment. And through City Deals we are giving cities a core package of powers and freedoms.

Lord Heseltine’s review is the icing on the cake. His local vision is the best way to foster local growth and stimulate the economy. A single local growth fund that Local Enterprise Partnerships apply to, joined up working between local authorities so they make strategic decisions on projects that boost growth such as infrastructure spanning their areas, and specialist support from civil servants. It’s a big change from the hand-out attitude of the past that stifled innovation and turned the regions into powerless centres that relied on Whitehall for jobs and spending.

Financial Secretary to the Treasury and Minister for Cities, Greg Clark said:

Just as national policies can help drive growth, so local areas can act to attract businesses and jobs.  Growth Deals, building on the successful City Deals, allow every area to do what it takes to help businesses expand and create jobs. This is a watershed in the relationship between central government and local places .

Notes for Editors

  1. The Government is accepting 81 of Lord Heseltine’s recommendations either in full or in part. 5 recommendations have been rejected and 3 will be considered as part of the forthcoming Spending Round.
  2. The wide-ranging recommendations cover local growth, the relationship between Whitehall and the private sector, the environment for business in the UK and the education system. These include: ensuring all government departments have growth objectives; increasing the number of secondments between Whitehall and the private sector; implementation of a package of regulation reforms announced at the Autumn Statement; encouraging greater business involvement with schools; and a UK Borders Agency review, informed by a CBI-chaired business group, of the application and enforcement of the rules on skilled migrants.
  3. Recognising the importance of universities to growth, the Government has asked Sir Andrew Witty (CEO of GSK and Chancellor of Nottingham University) to lead a review into the role universities can play in supporting their local areas to grow.
  4. The Government’s response confirms that the Single Local Growth Fund will contain elements of the key economic funding levers of skills, housing and transport. As part of the Spending Round, the Government will also review all the other funding streams that Lord Heseltine identified and will seek further alignment between skills and employment programmes. The Government will also ensure that the EU SI Funds are aligned with the Single Local Growth Fund.
  5. The Government is separately announcing its next steps in implementing its Industrial Strategy today, in line with Lord Heseltine’s recommendations.