The Government’s response to Lord Heseltine’s report No Stone Unturned was announced today. It’s is a ‘once-in-a-parliament’ opportunity to support greater devolution to local areas.
Government has committed to 81of the 89 individual proposals, we have distilled the 10 most important reforms that central and local government must prioritise and seek to take forward beyond the forthcoming Budget and spending review. Informed by our independent research and analysis, not all of these follow Lord Heseltine’s recommendations to the letter. But taken together, we believe they represent the best opportunity free our cities to boost growth in the years ahead.
In particular, national Government should:
1. Create a single funding pot for local areas, aligned with European funding allocations to provide greater flexibility for cities to adapt policies to their local circumstances, a more efficient allocation of resources at a local level, a more effective allocation of European funding streams and more scope for local innovation in terms of service delivery and pursuing growth.
2. Be flexible about the institutional structures and geographies to which it devolves funding to ensure that funds are devolved to functional economic areas, rather than within administrative boundaries, and that the body making decisions about funding allocation is democratically accountable and committed to a long term growth strategy.
3. Resist the temptation to continue setting the agenda nationally, particularly in relation to LEPs, recognising that different areas need different kinds of support if their local economy is to thrive. Large Core Cities, fast-growing small and medium cities and cities struggling in a post-industrial economy all require different support. Government should be open to flexing policy according to different needs.
4. Implement an approach to funding allocation that relies more on incentives than competition recognising that there are challenges inherent in making all funds subject to competition, including the risk that all places pursue the same priorities. Incentives should instead focus on the fundamental capacity of areas to deliver, including a requirement for strong governance, meaningful engagement with business and a clear focus on local growth.
5. Tackle Ministerial and civil service resistance to devolution by adopting Lord Heseltine’s recommendation that Ministers and permanent secretaries should be associated with individual LEPs, as well as creating permanent, cross-departmental local growth teams of civil servants to join up government at local level.
6. Use Heseltine to set a long term local growth agenda addressing private sector concerns over a lack of certainty in relation to national and local policy frameworks that they feel is currently inhibiting investment.
Working together, national and local Government should:
7. Ensure that Local Government steps up to take responsibility for delivering economic growth. Local government and LEPs need to take a lead by taking advantage of all existing and new powers to support economic growth at a local level. When developing local strategic plans, LEPs need to ensure that they are realistic, strongly place-based, developed with partners, and backed with investment and a delivery plan.
8. Manage issues relating to limited local capacity to ensure that cities can find ways to support one another and draw on expertise from the private and third sector where necessary. Implementing Heseltine’s recommendation for senior sponsors associated with individual LEPs may help with this, as could the introduction of secondments from national to local government and making use of public private partnership arrangements.
9. Ensure that Heseltine builds on the City Deals programme by ensuring that new centres of influence and power are not set up to compete against one another. Local areas must decide on their own governance and institutional structures to implement these separate processes, while elements of the City Deals process, such as the Core Package, should also be available to all local areas provided they can satisfy minimum criteria.
10. Strengthen local leadership by working towards the difficult process of local government reform, attempting to simplify the current overly complex system to create a streamlined system that recognises functional economic geographies more closely. It is vital, however, that both national and local Government do not become bogged down on institutional reform at the expense of broader delivery on local economic growth.
We will be providing regular updates as the Government takes forward these commitments.