Exclusive: Heseltine wants big projects targeted at poor areas

The Conservative peer – the Government’s most senior adviser on regional development – said the construction of a new regional hospital and associated developments could be the “jewel in the crown of a bombed-out economy”.

He accepted his call is likely to be controversial, with the NHS long used to making strategic decisions on purely medical grounds.

But he said taking an economic approach to major capital projects could eclipse the impact even of the large-scale devolution of funds to local areas which he recommended in his report to Government last year.

“I talked about £60bn of cash that goes through local government and its associated quangos,” he told a conference in London.

“But there is a vastly larger sum of money which will go through the capital programmes of the rest of Government – the military, the health service, academia, the transport budget.”

Lord Heseltine gave the example of the next wave of “major regional hospitals”, which could be strategically located in poorer areas.

“Regional hospitals are going to be quite a long way from most of their patients,” he said. “There aren’t that many of them, they are hugely expensive, they are very specialised, and so you can’t put one in every town. People will travel – so you have discretion.”

Pharmaceutical, medical equipment and IT firms could all be attracted to set up nearby, he added.

“Suddenly you can have a jewel in the crown of a bombed-out economy,” he said.