HeseltineThe Government has been urged by a former minister to spend more money on boosting economic growth in the regions.

Lord Heseltine urged the coalition to produce a long-term strategy for economic growth, including firm commitments against which it can be held to account. In a series of recommendations, Lord Heseltine said the Government should allocate up to £250,000 of new public funding to local enterprise partnerships (LEPs) over the next few years.


A new national growth council should be established, chaired by the Prime Minister, with a cross-government focus on driving growth and wealth creation, said the report.

Growth funds administered by different government departments should be brought together into a single, multi-billion pound pot for local areas, it was suggested. Local partnerships should bid for funds from central government for a minimum of five years starting from 2015/16, said Lord Heseltine.

The Conservative peer, who was deputy prime minister under John Major's government, called on Britain to "go on a war footing" to revive the stuttering economy. He told The Sun: "We have a national crisis. We need to engage the war psychology - that we're all in this together."

The 228-page report, entitled No Stone Unturned, also recommends that local authorities should have a new legal duty to consider economic development and that all two-tier English local authorities outside London should pursue a path towards unitary status.

Lord Heseltine added: "Britain's great cities that characterise an earlier generation have been replaced by quangos and central government. The country was made by the Liverpools, Birminghams, Newcastles, Manchesters and Leeds - not by London."

Business leaders and trade union leaders welcomed the blueprint. Terry Scuoler, chief executive of EEF, the manufacturers' organisation, said: "This review is a welcome recognition that all parts of government need to get behind companies that are looking to grow to create the stronger economy we need. However, with such a wide-ranging review, the Government needs to consider its proposals carefully to ensure that they offer value for money and review how they would work in practice."

John Longworth, director general of the British Chambers of Commerce, said: "Businesses will welcome his call for steady, long-term thinking to improve the UK's economic performance. Yet Heseltine's prescription for action focuses too much on institutions, rather than on the fundamental barriers to business growth. Ministers should think carefully before committing to a restructuring of government, and focus first on the key constraints facing the real economy."

Business Secretary Vince Cable said the root-and-branch review raises a number of important issues. He added: "Lord Heseltine's findings show where Government can improve its performance in delivering better interventions. We will now need time to consider its numerous recommendations and will respond in the coming months."