Heseltine warns of ‘slap in the face’ for regions on spending

Lord Heseltine has warned the Chancellor it would be a “slap in the face” for the regions of England if the large-scale devolution of public funds to local bodies is not announced in the spending review this month.

Lord Heseltine

With less than a fortnight to go until George Osborne’s speech on June 26, when the Government’s post-2015 spending plans will be revealed, Lord Heseltine said the Chancellor must “seize the moment” and hand swathes of funding to local areas to spend for themselves.

Mr Osborne has promised that a ‘single pot’ of money for local areas, taken from existing Whitehall funds, will be included in the spending review.

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The measure was recommended by Lord Heseltine in his report on promoting growth in the regions last year.

But the Chancellor has not yet made clear how much will actually be made available for local enterprise partnerships (LEPs) to bid for to enact their individual growth plans – with Treasury sources suggesting the figure may fall far short of the £80bn originally envisaged by the former Cabinet Minister..

Speaking in Westminster yesterday, Lord Heseltine made clear he believed that devolving only a small amount of funding will not deliver the change required.

“In two weeks, the Chancellor announces what the figure will be,” the Tory peer said.

“I have no idea. I read speculation, but I’m also well aware there’s a battle going on in Whitehall (for Ministers) to hold on to what they’ve got.”

Responding to reports that just £2bn will be made available for the spending period, he said: “There are 39 LEPs.

“If you’ve got £2bn over four years, you’re talking £50m per LEP... You’re not going to get anything worth the name.

“So this great local enthusiasm which the Government has built up, and which is very real on the ground, would in my view just get slapped in the face if the figure was anything like on that sort of scale.”

Heseltine bangs devolution drum: Page 4.