Exclusive: Don’t renege on growth plan, Lord Heseltine warns Osborne

LORD Heseltine today issues a clear warning that the Chancellor must set out precisely how much Whitehall spending will be devolved to the regions in next month’s crucial spending review, or risk reneging on his promise to enact the Tory peer’s radical plan for growth.
Lord HeseltineLord Heseltine
Lord Heseltine

In an interview with the Yorkshire Post, Lord Heseltine dismissed any notion that the Government could leave open-ended the hotly-disputed question of how much money will be made available for council and business leaders across England to spend on kick-starting their local economies under his sweeping devolution scheme.

“That would not be a satisfactory outcome,” Lord Heseltine said. “It means central government has clung on, kept control of all the budgets.”

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George Osborne has repeatedly praised the Tory grandee’s radical vision for sparking economic growth in regions such as Yorkshire by allowing local enterprise partnerships (LEPs) to take control of billions of pounds of public money, with the Chancellor promising concrete action in his post-2015 spending review in June.

Lord Heseltine has identified £79bn of existing Whitehall and EU funds which he believes should be placed into a “single pot” for LEPs to spend on local growth plans covering issues such as housing development, transport and infrastructure investment and skills training.

But the Tory peer warned last month that a “battle” is now underway at Whitehall, as Ministers and officials try to cling on to their budgets ahead of next month’s key decision.

And earlier this week Business Secretary Vince Cable appeared to roll back on the Government’s clear commitment to enact the plan, telling regional journalists in Westminster that while the Government “is not saying ‘no’ to Heseltine”, he is not convinced of the need to set out how much money is actually going to be devolved.

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“The idea of putting a precise number around the ‘single pot’... doesn’t mean a great deal,” Mr Cable said.

His comments were endorsed the following day by Cities Minister Greg Clark, who has been leading the Government’s so-called ‘localism’ drive.

“We are very clear that powers and resources will be available to places,” Mr Clark said. “The decision as to whether to follow Michael [Heseltine] in putting a single number on it will take a time.”

Both men suggested that because each of the country’s 39 LEPs would be tabling its own individual bid for funding, there was no need to set out precisely how much money was being made available.

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But their comments have given weight to fears among council and business leaders that the Government intends to pay little more than mere lip service to Lord Heseltine’s growth plan.

And in an interview today, the Tory peer makes abundantly clear that any failure by the Treasury to put a precise figure on the funding available would constitute a significant rolling back of his approach.

“I don’t see how they can carry out what they’ve said they’re going to do without there being a figure,” he said. “How can you 
get 39 LEPs to bid for an invisible pot?

“They don’t know the size of the pot; they don’t know how ambitious to be; and if they don’t know the composition of the pot they don’t know what to include in their bids. So I don’t see how ‘invisibility’ is compatible with what the Government has said.”

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In a wide-ranging interview, Lord Heseltine also dismisses the rise of Ukip as a “protest” vote and insists the Conservative Party is doing well to be just nine points behind in the national polls mid-way through the election cycle.

And he speaks of the strange feeling on attending Lady Thatcher’s funeral last month and seeing that just seven of her original 1979 Cabinet were still alive and in attendance.

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