Lord Heseltine talks exclusively to Lisa Pilkington about his role in Birmingham’s pilot to extend devolution of powers and financing from central government
Lord Heseltine is waving his arms and legs in the air. Sitting in his spacious-but-utilitarian office at the Department for Business Innovation and Skills on London’s Victoria Street, some way into the meeting and a long list of questions, the lights go out and we are plunged into near darkness in the fading light of a winter’s afternoon.
The motion-sensitive energy-saving lights are not playing ball and after both of us have been waving our arms in the air for what feels like an eternity, the former Tory deputy prime minister decides to carry on regardless. Until then, Heseltine, who turns 80 on the 21st of this month, has been slightly aloof, wary even. But the change in lighting has improved his humour and he relaxes into the remainder of the interview.
Before the lights went out, the discussion has been about he came to be working with Birmingham on extended devolution of powers and financing from central government. “They chose themselves,” he answers simply. “They wrote to Greg Clark [financial secretary to the Treasury] after reading the report I produced (see box), and suggested that they could be a pilot to indicate the complexities, challenges and opportunities that flowed if the government was to accept my recommendations.
“Greg Clark suggested to Birmingham that if it was going to do this it might make sense to involve me in the process as I had done the original report. Everybody agreed. The LEP wrote to the prime minister, who supported the idea. There was no competitive process.”
He goes on to explain: “Humberside did the same thing, but slightly later, and I am doing rather less formal work with them as well. Manchester has been working along these lines by itself for a significant period of time, I would say Manchester is ahead of the game in terms of how one should organise oneself locally to maximum benefit.”
The latter comment will irk many in Birmingham, though they can console themselves that it is the UK’s second city that is getting Heseltine’s undivided attention on a weekly basis. “I am in Birmingham every Friday, but there is a lot of work that goes on when I am not there,” he says. He is rumoured to have his own desk within KPMG’s offices at 1 Snowhill and is working closely with Greater Birmingham & Solihull LEP chairman Andy Street and deputy Steve Hollis in devising a strategy to prepare a bid for a share of the £72m single pot expected to be on offer to the 39 UK LEPs.
The exact amount will be dependent on how much cash Heseltine can wrestle away from its current allocation to central government departments. Sources suggest that while there is resistance from civil servants, Heseltine will eventually get his way. Things should become clearer shortly, when the government gives its official response to Heseltine’s No Stone Unturned report. That, he understands, is likely to happen in two phases: “Around the time of the Budget the government will give indications about the single pot and it is possible that that will lead to a consultative period before details are finalised.”
Asked what LEPs should be looking to include in their bids, or statements, as he calls them, Heseltine bats the question straight back. “That’s for them. The question, which is a perfectly right question, indicates the problem. This is not rocket science. It’s about empowering local people and saying ‘you tell us’. If we can show what Birmingham is doing then people might say, ‘now we know what’s got to be done’. That is why Birmingham’s initiative is so much to be admired.”
He listens patiently to EG’s comment that while the property industry is keen to get more involved, many industry players are yet to feel a part of the process, but his response in unapologetic: “There is no simple process. There are many avenues of co-operation, such as membership of the LEP or its sub-committees. It is the people themselves who should work out how they can make things work more effectively.”
Heseltine sums up: “In the near future, 39 LEPs will be asking themselves ‘What are the strengths and weaknesses of this place, how can we improve, exploit and develop what we find? In order to gain significantly we have to be better than our competing LEPs.’ Now that scale of endeavour, I think, is unprecedented in this country. We are on the cusp of restoring power to where it was when this country became the great figure it was in world events.”
No Stone Unturned Report and the Greater Birmingham Review
In March last year, prime minister David Cameron asked Lord Heseltine to suggest to the chancellor of the exchequer and the secretary of state for business how government might more effectively create wealth in the UK.
On 31 October 2012, Heseltine published a report entitled No Stone Unturned in the Pursuit of Growth. The 233-page tome comprised 89 recommendations.
Many of these require “enhanced roles” for both local enterprise partnerships and local chambers of commerce. More local action and leadership is required, says Heseltine, to rebalance the economy towards private sector growth.
Within weeks of the report being published, leader of Birmingham city council Sir Albert Bore and chairman of the GBSLEP Andy Street approached the Treasury, the prime minister and Heseltine with a proposal that Birmingham should prepare a report that would demonstrate to central government how Heseltine’s proposals would work in practice.
This was agreed. Branded the Greater Birmingham Project, it was launched on 3 January 2013 with a three-month timescale. GBSLEP’s conclusions will be presented to government at the end of this month.
Key recommendations from Heseltine’s No Stone Unturned report include
• Central government should identify the budgets administered by different departments that support growth. These should be brought together into a single funding pot for local areas, without internal ringfences.
• Local partnerships should bid for funds from central government on a competitive basis. Bids should be for a minimum of five years starting from 2015/16.
• The government should allocate LEPs up to £250,000 of new public funding, resourced through departmental efficiency savings and underspends, in each of the years 2013/14 and 2014/15 specifically to devise their local economic strategies and create the foundations for their implementation.
• Government should involve the private sector in drafting regulations so that it is a collaborative process.
• The planning inspectorate should be given powers to investigate planning decisions proactively.
• Government should consider using special development orders to speed up specific planning decisions of strategic significance.
• The government property unit should work with local authorities to identify and publish details of all surplus and derelict public land so that LEPs and local authorities can collaborate to bring this land back into use in support of the local economic strategy.
• An experienced implementation team should be set up in the centre of government, including secondees from the private sector, LEPs and local authorities.
Chairman Andy Street updates on Greater Birmingham & Solihull LEP
“We are five weeks [into the Greater Birmingham Project – at the time of writing] and it’s going extremely well. I’m very positive about the outcome for two reasons: first, there is a real appetite for this from the government. Second, the local fact finding that we’ve carried out has uncovered lots of information that will be really useful.
“I believe we will have something of real substance at the end and we are on target to produce our report at the end of March. I think we were chosen for the pilot because the government recognised what we are doing here, but now I feel we have a responsibility to get it right for the rest of the UK.”
