Hezza’s one man stand needs stronger sense of place

by Ed Cox

It is always good to see a lone ranger riding into town, kicking wide the swing doors of the last chance saloon and calling on the assembled laggards to put their hands up high in the air. This is exactly what Lord Heseltine has done with No Stone Unturned – “one man’s vision” for national economic growth.

Amidst its 233 pages and 89 recommendations there is much to cheer about. The simple challenge that the country needs more than a plan for austerity is a welcome start. The strong emphasis on “reversing more than a century of centralisation” not simply with localist rhetoric and piecemeal initiative but though a £49 billion “single pot” for growth is a step-change in the debate that should make all political parties gulp. And there are many other very sensible recommendations on procurement, local business support and schools which have not made the headlines but could make a significant difference at the local level.

What is striking though for such a gun-slinging, private sector champion is the report’s preoccupation with structure. No stone unturned could equally read “no deckchair unmoved” as the detailed schema in the report’s annex set out in fine detail. Heseltine’s plans for a fundamental reorganisation of central government bodies and local structures are to allow for greater private sector involvement and a greater focus on growth. The emphasis on functional economic areas makes good sense and with it the bolstering of Local Enterprise Partnerships and Combined Authorities – something that Labour would do well to back at the earliest opportunity and put to bed any notion of reinventing RDAs.

But whilst changes to central government are eye-catching, the foundations of a centralist state are left firmly in place: the single pot, for example, will only be granted on the basis of competitive bidding to central government; R&D spending , transport infrastructure and welfare-to-work programmes remain controlled centrally albeit with a new mandate to demonstrate how they contribute to growth; and there is nothing in the report to enable local areas to generate more of their own revenue to drive their own growth. Indeed the duty on local authorities to drive growth fails to recognise the funding crisis which many find themselves in.

The report also betrays the spatial blindness that afflicts so much government thinking on economic development. Whilst acknowledging the under-development of the provincial cities and bemoaning that “in London we have created a functional monopoly” the report makes no attempt to address imbalances in the investment that has allowed this state of affairs to come about. It fails to see the glaring national solution to the south eastern airport capacity problem for example; it gives significant attention to Thames Gateway rather than Atlantic Gateway in the North West or other large-scale investment project outside London; and only makes scant reference to the importance of a regional dimension in a British investment bank.

If we are to learn from our German or Scandinavian neighbours – as the report so clearly seeks to do – any new growth strategy must have a strong element of regional policy and not rely on sectoral support or LEP competition alone. This is particularly true in relation to infrastructure investment – a theme upon which the report is notably quiet.  Recent studies by the OECD show that different places need emphasis on different growth drivers and that it is insufficient for regions to rely on big cities alone to drive growth, just as our nation cannot rely exclusively on London. Growth at any cost can exacerbate inequalities and social problems. The report dedicates just two paragraphs to this issue and the skills recommendations in particular need to go much further in recognising the challenges for education and skills in some of the more deprived parts of the country.

Back in last chance saloon, the chancellor has an ideal opportunity in his Autumn statement to indicate how he intends to respond to Hezza’s one man stand. Between now and then he will also have the report of the Northern Economic Futures Commission sidling up alongside the lone ranger to add double-barrelled weight to the urgency for decentralisation and growth.

Ed Cox is the director of IPPR North

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