Heseltine demands action for ‘neutered’ regions

A massive shake-up of Whitehall is urgently needed to get the Government focused on reviving regional economies outside the South East, Lord Heseltine said as he warned cities have been “neutered” by decades of centralisation.

The Conservative grandee, charged by party leaders to draw up a new growth strategy for Britain’s ailing economy, launched a broadside against “monopolistic” Government departments which pay scant attention to the effect their policies are having on different parts of the country.

Last month Lord Heseltine published his landmark report on reviving the economy, calling for the devolution of tens of billions of pounds of Whitehall money to 
local areas to spend for themselves.

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The Yorkshire Post is campaigning for swift progress to be made on implementing key tenets of the Heseltine plan, as part of its Give us a Fair Deal campaign.

In a typically forthright appearance before Parliament’s business select committee yesterday, the Tory peer told MPs that Whitehall departments and the Ministers who run them take little notice of regional differences and are generally occupied only with their own “monopolistic functions”.

What was needed, he said, was a new focus on “place”.

“If you think in terms of Government departments, their names tell you all you need to know,” Lord Heseltine said. “They are doing health, they’re doing education, transport, local government.

“The real challenge for me is to ask how you build the economy of Manchester, Liverpool, Leeds, Newcastle, Plymouth, whatever?

“That question is not asked.

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“The preoccupation, and indeed the career structure for Ministers is how they can do well in their functional process.”

On Monday, Prime Minister David Cameron rejected the suggestion that more policies focused on specific parts of the country might win back support for the Tories in the North.

Lord Heseltine said yesterday that “only once” during his entire career in Government could he recall attending a meeting “about place” – in 1981, following the Toxteth riots in Liverpool.

Other than that, he said, the focus is always on “departmental monopoly functions.”

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“I don’t believe that is the right way to stimulate growth activity, and I believe it has a neutering effect,” he said

Lord Heseltine’s report called for the creation of a £49 billion “mega-fund” of existing Whitehall money, which local enterprise partnerships would bid for to promote local growth.

“We need to say to the local people, we’ve got this much money – you tell us what you would do, and what you would add to it if you initiate where the money is spent, not us,” he said.

“It’s what every other advanced country does, and it’s what I 
believe would work in this country.”

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In his Autumn Statement last week, Chancellor George Osborne said Lord Heseltine’s plan had “captured the imagination” and pledged to bring forward concrete proposals in the new year.

Lord Heseltine warned that Mr Osborne will need to overcome the objections of those Whitehall departments set to be stripped of large chunks of their budgets.

“If you look at who is in favour and who is against, you won’t be surprised to find that anyone who’s losing money is ‘against’, and anyone who’s trying to get the economy moving is ‘for’,” he said.

The Tory peer, Deputy Prime Minister in John Major’s government of the 1990s, was scathing in his verdict on the way Whitehall operates and called for an overhaul of the civil service, which he said lacks real-world experience.

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“Departments don’t have business plans,” he said. “No one knows what is going on in Whitehall. He went on: “The general approach we adopt in this country is unlike that of any other capitalist economy. It is too centralist, and too amateur.

“There is a great need in my view for much more professional expertise in the civil service.”