Heseltine: assist poor areas

Central government should use its direct spending on major physical projects to help turn around the fortunes of the country's most economically moribund areas, its regeneration and economic development adviser said last week.

Heseltine: last year produced his No Stone Unturned report on economic growth for the government
Heseltine: last year produced his No Stone Unturned report on economic growth for the government

Lord Heseltine, who last year produced his No Stone Unturned report on economic growth for the government, spoke at last week's Institute of Economic Development annual conference in London.

He told delegates that some parts of the country were so economically infertile that they would not be able to put together compelling bids to the £2-billion-a-year Single Local Growth Fund (SLGF), which was set up in response to his report. This was because "there is not the underlying strength in the local economy on which to build such bids", he said.

Hence the government should consider the case for steering central government capital funding for sectors such as health, defence, transport or education towards such places to spark economic revival, he said. This would involve tapping into a separate source of money to the SLGF, which is formed by pooling funding streams that previously would have been spent by town halls.

The siting of a new regional hospital, for example, could be influenced by the need to revive a deprived area, he said. Once the site has been chosen, local leaders could attract relevant investors such as pharmaceutical companies, medical equipment suppliers or universities. "Suddenly, you could have a jewel in the crown of a bombed-out economy," he said.

Asked if government would do better to just accept that economic decline is inevitable in some places, Heseltine said: "You can't abandon communities".

Talking to journalists after the speech, Heseltine also revealed that he was working with government on a proposal to create "chief executives" for the most deprived estates. "Huge sums are used by government agencies, quangos and local authorities to sustain these places in ways that are unco-ordinated," he said. "There isn't a person (identifiably in charge) that you can talk to about the problems of a particular estate."

Earlier in the month, speaking at the annual Royal Town Planning Institute Nathaniel Lichfield Lecture in London, Heseltine urged the government to "immediately" establish urban development corporations in areas earmarked for stations for the proposed High Speed 2 north-south rail link. He said such a step would have the benefit "not only of capturing the planning gain for the taxpayer in order to further reduce the cost, but also to transfer the costs of the stations to the private sector".

He urged the government to push on with the project, saying that it was about "so many more people sharing growth that has, for too long, been concentrated on London and the South East". But he declined to support the concept of a national spatial strategy, as advocated by the RTPI. "I'm a good old right-wing bolshy Tory," he said. "You've only got to use words like 'spatial strategy' and 'national wide' and I feel 'get out of my way!".

He did acknowledge a role for the public sector. "We need airports and ports, and only government can do that." But he said what he had learned in Liverpool, where he led regeneration in the 1980s, "is that you have to start with the small things".

Speaking to Planning after the lecture, Heseltine also played down the idea of councils within local enterprise partnerships linking up to produce sub-regional plans with statutory force. "I would start with the project and not the plan," he said. "If you take the formal approach with statutory this and that, and along comes a scheme which doesn't fit the planning arrangements, you will come up against bureaucratic frustrations."

From councillors to personal regrets

Below is a selection of the topics Lord Heseltine covered at the IED annual conference and the RTPI Nathaniel Lichfield lecture:

Councillors are too deferential to planning officers

"A lot of councillors are in thrall to their planning departments. Too many believe that the planners have got the right to run the show, until the dynamics change and there is something they desperately want."

Why he insisted that funding for LEPs' strategic growth plans should go to private sector consultants, not local planning authorities.

"I wanted planning companies that have a world perspective to be advising LEPs. I wanted those people to say to LEPs that this is not about parcelling up money between this or that community, but about adapting to a world that is operating on a very fast-moving, competitive basis".

Why fostering growth should not trump every other consideration

"I would never encourage growth to the exclusion of all else. The key is not to make different decisions, but to make them more quickly."

On regrets in his dealings with the Docklands community in the 1980s

"I've anguished over this criticism for many years. If I had the opportunity again I would have talked to them. I wouldn't have changed my policies."

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