Victory for Heseltine as Government backs his growth plan

Nearly all of the changes recommended by Tory peer Lord Heseltine in his report No Stone Unturned, published last year, are to be taken up, the Government announced today (Getty Images)

A plan to devolve greater decision-making and spending controls to the country's regions in a bid to boost jobs has received government backing.

Nearly all of the changes recommended by Tory peer Lord Heseltine in his report No Stone Unturned, published last year, are to be taken up, the Government announced today.

Lord Heseltine had called for the Government to slash red tape and hand back decision-making powers to Britain's major cities giving them greater say over matters including transport, housing, and vocational training.

He said for too long Whitehall departments and civil servants had "stifled" growth outside London.

The Government is accepting 81 of Lord Heseltine's 89 recommendations in part or in full.

The recommendations directly benefit England's 39 business-led Local Enterprise Partnerships (LEPs), delivering them an immediate funding boost worth £500,000 over the next two years to be spent on drafting plans on how best to create economic growth.

The Government will create a single pot of money, in 2015, which the LEPs' will bid from and spend on projects of their choice.

That money will come from capital cash currently allocated to departmental budgets and European Union funding, although the exact amount will not be known until 2014.

In return for the granting of greater financial control, the Government will make LEPs set out their long-term plans in Local Growth Deals.

The Government has also backed Lord Heseltine's suggestions for closer working between councils, civil servants, business leaders, schools and universities.

Not all the recommendations were accepted, with Lord Heseltine's call for the Government to "clarify urgently" its position on increasing airport capacity in the South East rejected.

Chancellor George Osborne said Lord Heseltine was able to "challenge received wisdom and give us bold ideas on how to bring government and industry together".

"That is why we are backing him today," he said.

Business Secretary Vince Cable said: "The plans will boost the UK's competitiveness".

He added there would also be further support for key industries, including the aerospace and automotive sectors.

Deputy Prime Minister Nick Clegg said Lord Heseltine's report had set out "the best way" to boost regional growth.

"It's a big change from the hand-out attitude of the past that stifled innovation and turned the regions into powerless centres that relied on Whitehall for jobs and spending," he said.

Lord Heseltine said the decision to accept the most of his recommendations would allow England's regions to "share in the rewards" of higher employment and greater prosperity if they could develop good enough economic strategies.

Communities Secretary Eric Pickles said: "Today's response reinforces the local approach the Government is taking to grow the economy. Jobs are created in offices, on high streets and in industrial parks around the country, not in Whitehall.

"We are giving more power than ever before to Local Enterprise partnerships and councils to drive growth in ways that best suit their local economy, not through diktats from central government bureaucrats.

"This is also a challenge to councils to innovate, to come together and pool resources and functions, to better deliver economic development across their area."

PA