Heseltine calls for £58bn LEP fund

FORMER deputy prime minister Lord Heseltine is calling on the Government to empower Local Enterprise Partnerships (LEPs) with a £58bn growth fund.

Lord Heseltine states the case for giving the 39 LEPs real financial power in his study into the Government’s economic policy which is published today.

In the report he says, “they currently do not have the authority or resource to transform their locality”.

To remedy this he is suggesting that £48bn of Government cash earmarked for growth in various Whitehall departments is placed into a single fund which LEPs can bid for. This should be beefed up with £9bn of EU funding.

Last month the Government agreed to give LEPs £250,000 a year each to meet running costs, but only if they can find match funding.

The promise from the Government represented a victory for LEPs which have been arguing they cannot work properly without ‘core funding’ to pay for key staff and independent research. LEPs were introduced after the Government abolished the nine regional development agencies. They were set up in 1999 by the Labour Government and had an annual budget of around £2bn.

Lord Heseltine’s report, commissioned by the Government, is being seen as a major critique of the Government’s growth strategy. In it he says, “continuing as we are is not an acceptable option”, adding “the message I keep hearing is that the UK does not have a strategy for growth and wealth creation”.

He also calls for local government reform, suggesting that legislation preventing councils becoming unitary authorities should be repealed.