The danger of a laissez-faire regional policy

Richard Garlick asks if the government is truly committed to rebalancing England's economy away from the South East

Richard Garlick: "Several of the government's key regional initiatives have been called into question". Ian Bottle photo
Richard Garlick: "Several of the government's key regional initiatives have been called into question". Ian Bottle photo

Are the government's promises to "rebalance" the economy away from the South East more than just talk? That is the question implied by the challengingly titled Rebalancing Britain: Policy or Slogan? report published late last month by former deputy prime minister Lord Heseltine and former Tesco chief executive Sir Terry Leahy.

The question seems particularly pertinent in a fortnight in which the effectiveness of several of the government's key regional policy initiatives has been called into question.

The announcement of the 119 successful bids to the £950 million second round of the Regional Growth Fund (see Economic Development News Analysis, p13) was clouded by widespread reporting of the fact that only seven of the 45 projects to have won first-round cash have yet received their money, six months after it was awarded. The remaining schemes are still going through the due diligence process. No announcement has yet been made about whether there will be a third RGF round or, if not, whether there will be an alternative regional funding pot to replace it.

The government's local enterprise partnerships, which are intended to assume the economic development leadership role previously held by the regional development agencies, also came under fire. A report from the Centre for Cities think-tank (see Economic Development News Analysis, p12) pointed out that only two of the 24 LEPs launched last October had yet published a long-term strategy, and eight had not yet had their boards approved by the government.

Finally, its overall approach to regeneration was lambasted by backbench MPs. In a communities & local government select committee report (see News Analysis, p5) published this week, ministers were accused of mistaking general economic development policies for strategies specifically targeted at the needs of deprived areas.

Heseltine (who owns the company that publishes this magazine) and Leahy were commissioned to produce their report, on the economic potential of the Liverpool city-region, by the Prime Minister. The report warns David Cameron not to heed calls for a laissez-faire regional policy that would allow economic activity to become even more concentrated in the South East. "In the end, it is said, congestion will create costs that will encourage a rebalancing," the report warns. "Long before that, the political resentment of those who perceive themselves to have been abandoned and the nimbyism of those watching their fields replaced by concrete will have taken their political toll."

The way to avert a grim electoral reckoning in cities such as Liverpool, say the authors, is to invest in masterplanning, infrastructure and regeneration, relocate Whitehall jobs and accelerate the coalition's devolution plans to create directly elected city-regional mayors.

The Prime Minister has welcomed the report as "showing a real way forward". But he and his colleagues will need to step up their attempts to address the economic divide between the South East and the rest of the country if they are to convince sceptics that their commitment to rebalancing is anything more than warm words.

Richard Garlick, editor, Planning//

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