From the TUC

Implementing the Heseltine Review – an interesting start and a chance to have your say

05 Dec 2012, by in Economics

I disagree with George Osborne on most things, but he was right when he said today that ‘No Stone Unturned’, Michael Heseltine’s review of industrial strategy and wealth creation, “has captured the imagination of all political parties”.

The Chancellor announced that the Government will respond fully to the Heseltine Review in the spring (I’ll come back to that bit at the end of this blog). Today, Osborne focused on proposals for expanding Local Enterprise Partnerships (LEPs), which were a key recommendation of the Heseltine review.

Specifically, the Autumn Statement revealed that LEPs will be asked to lead the development of new strategic plans for local growth consistent with national priorities. LEPs will be asked to consult with local chambers of commerce and other business bodies. It is essential that they consult with trade unions at the regional level as well.

The Autumn Statement announced that £10m per year would be provided for capacity building within LEPs and that each LEP will be able to apply for up to £250,000 additional funding per year to support the development and delivery of its strategic plan. The Government will devolve a greater proportion of growth-related spending on the basis of these strategic aims developed by LEPs by creating a single funding pot for local areas from 2015. Funding will reflect the quality of strategic proposals put forward by LEPs, who will be expected to seek to leverage top up cash.

As I have blogged before, I have no objection to this in principle. However, the decision to abolish Regional Development Agencies was a big mistake, made on the basis of ideology rather than practical reality. Some LEPs don’t reflect natural economic areas and many are not fit for purpose. The Autumn Statement acknowledges as much, by stating that “not all LEPs are providing the local leadership that is needed”. If LEPs are to carry out the role that is to be asked for them, they need to rise to the challenge sooner rather than later. Their governance is a crucial issue here. Specifically, the Autumn Statement said that “LEPs should remain small, responsive business-led organisations and avoid creating a local bureaucracy”. I’ve no argument with that, but I think Michael Heseltine’s observation, that “what is missing [from LEP boards] is the experience of those from the shop floor of industry” remains valid. To that end, LEP boards should ensure that trade union representation is put in place as a matter of priority.

Heseltine also recommended that a strategic role be given to LEPs in skills policy and it was announced today that the Government will implement this idea. Again, it could be problematic, less in principle and more in terms of the current capacity of LEPs to carry out this role.

More generally, I have previously said that ‘No Stone Unturned’ is the most important government economic statement since the Coalition took office, so I’m pleased that the Autumn Statement announced that the Government “will seek to implement as many of the recommendations as soon as possible”.

I’m pleased, but I’ll be watching closely to see if that happens. For example, will they introduce the National Growth Council, to be chaired by the Prime Minister, and the National Growth Strategy, with concrete commitments to which it can be held to account? And if so, why did this need to wait until next spring? Surely work could begin on this now?

I’m also curious to find out what will happen between now and the spring. Will there be any kind of consultation, or mechanism in which interested parties, such as trade unions, can give their views on the most important parts of the Heseltine Review and how they can be implemented? I hope the next six months (or hopefully less) can be used productively. The situation we are in is serious beyond words and we don’t have time to hang around.

I’m sure that Lord Heseltine himself will be itching to make progress during that time and I know he will welcome the ideas of trade unionists in how to implement his ideas. After all, he quoted the TUC, along with the CBI and the Times newspaper, as among the movers and shakers behind the whole idea of an industrial strategy.

So if you are a trade unionist (or if you have some other interest) and you’d like your say on industrial policy, register for the TUC’s free seminar, here at Congress House on Thursday 10th January. Michael Heseltine will be here to debate with us, along with Andrew Adonis, who is leading Labour’s industrial policy review, Andrew Churchill from the business community, and the incoming TUC General Secretary, Frances O’Grady. To register, simply click here:

http://bit.ly/industrialpolicyTUC

One Response to Implementing the Heseltine Review – an interesting start and a chance to have your say

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    Dec 11th 2012, 1:08 pm

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