Provinces ‘have been gradually denuded of power’

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ECONOMIC growth has been inhibited by the decision of successive Governments to take power away from the English provinces, according to Tory grandee Lord Heseltine.

However, Lord Heseltine said the establishment of directly elected mayors would help to raise the profile of big English cities.

On May 3, residents in 11 cities, including Leeds, Bradford, Sheffield and Wakefield, will be given the chance to decide whether they want an elected mayor by taking part in a referendum.

Speaking at the University of York yesterday, Lord Heseltine said: “Quite strongly over my lifetime, I have seen the English provinces denuded of power. All Governments – not just one party – have centralised power in London. I think that has been a major economic inhibitor to the performance of our economy and creating mayors...would be a major opportunity for restoring power, with all that will follow from it.

“You’ve only got to watch your televisions to see what happens when something affects Scotland, you’ve got Alex Salmond (the Scottish First Minister) out there, when something affects London, you’ve got Boris Johnson (the London mayor) out there. If you ask about the leaders of the big English cities, no-one can tell you who they are.”

The former Deputy Prime Minister made the comments as he visited the Ron Cooke hub at the University of York, to encourage an audience of 100 Yorkshire business leaders to bid for a share of the extra £1bn being made available through the Regional Growth Fund (RGF).

Altogether, 31 out of the 176 successful bids for RGF funding approved so far have been based in Yorkshire and the Humber. When asked afterwards what he thought could be done to restore power in the provinces, Lord Heseltine said: “The first thing is to have directly elected mayors in the big cities. The second thing is to see local economic regeneration as a bottom-up local led exercise. The third thing is to distribute a much higher proportion of Government capital expenditure by competition.”

Lord Heseltine, chairman of the independent advisory panel for the RGF, told the audience: “In 2010 the Deputy Prime Minister (Nick Clegg) and other ministers recognised that while the (public sector) cuts were unavoidable and crucial for our long-term economic prosperity, they would have a disproportionate impact on some areas of England, the economies of which had become too dependent on the public sector and where the private sector was not strong enough to replace the jobs lost in the cuts.

“The RGF was launched as part of the Local Growth White Paper...with a commitment to invest £1.4bn over three years.”

Lord Heseltine said the first two rounds of RGF received 956 applications requesting more than £6bn in Government support.

He added: “Across both previous rounds, the Government has announced that 176 successful bids would proceed to due diligence requiring £1.4bn in RGF grant, but leveraging over £7.7bn of private sector investment. The successful schemes proposed to create or safeguard 330,000 jobs. If this level of gearing is seen in the next round...then the global investment from this fund could be as high as £5bn to £6bn.”

He said an extra £1bn of RGF was now available, and applications were welcome from bidders who could deliver “sustainable private sector jobs” in the relevant areas.