Miliband pledges to double the funding for regional devolution

Ed Miliband
Ed Miliband
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ED Miliband will today pledge to double the amount of Whitehall money being handed down to the regions under the Heseltine review as Labour seeks to reposition itself as the true party of English devolution.

The Labour leader will commit to increasing the money being devolved to local areas in 2015 from £2bn-a-year to at least £4bn, alongside a raft of new powers for town halls over housing, transport and skills training.

“Devolving power from Whitehall to our towns and cities is essential to generate the new jobs we need,” Mr Miliband will say, in a keynote speech in Birmingham.

The Coalition Government has made so-called ‘localism’ a central plank of its approach to regional growth over the past four years, offering devolved powers and funding to the largest urban areas under its ‘City Deal’ programme. The Leeds, Sheffield and Humber city regions have all been given extra powers and money to boost local growth.

From next year, a further £2bn-a-year of Whitehall funds will be made available for local enterprise partnerships to invest in their areas, following the recommendations made by Tory peer Lord Heseltine in his 2012 growth review. That figure, however, represents only a fraction of the £15bn-a-year Lord Heseltine had said should be made available.

Mr Miliband will attack the Government for “ignoring” the Tory peer and pledge to double the amount of funding available.

“This Government had an opportunity to make a difference,” the Doncaster North MP will say.

“Michael Heseltine’s review called for a massive devolution of funding from Whitehall to the cities. But David Cameron and George Osborne allocated just £2bn. The best report this Government has produced has been the one they have most ignored.

“We can and must do a lot better than that.”

Labour sources said the extra £2bn-a-year will come from housing and transport budgets, which will be handed over to town halls which draw up economic growth plans with their neighbours and local enterprise partnerships.

They said the £4bn-a-year figure could yet increase further as the party continues to scrutinise Lord Heseltine’s report “line by line” to see which other areas of Whitehall funding could be handed over to local areas to spend.

That work is being carried out by the former Transport Secretary Lord Adonis, who has been tasked by Mr Miliband to conduct his own review of how to boost economic growth in the regions.

In an interim report published this morning, Lord Adonis will reject any suggestion of recreating regional development agencies such as Yorkshire Forward, which were dismantled by the Coalition in 2010 - preferring to continue along the path embarked upon by the Coalition. But he will commit Labour to going significantly further.

In language similar to that used in the Coalition’s ‘City Deals’, Lord Adonis will propose a “new bargain” with those town halls which agree to work together with neighbours and local business interests to grow the economy.

“Cities and towns that agree to come together with local businesses to plan for their economic future will be given historic new powers over funding for infrastructure, skills and economic development,” Mr Miliband will say.