Devolved regional funding set to become a reality

IN a pre-Budget boost to the regions today, Chancellor George Osborne is expected to give the green light to proposals to create a new single funding pot to stimulate economic growth in areas of the UK outside London.

The move follows the release the Greater Birmingham Project, a blueprint of how the recommendations contained in Lord Heseltine’s No Stone Unturned economic review could be delivered in the major regions.

However, the size of the pot is still uncertain. The former Deputy Prime Minister had proposed the network of Local Enterprise Partnerships be given greater powers to develop their own tailored local economic plans. From 2015-16 they would compete for a share of the single national funding pot to support growth over a five year period.

Under the current spending review this would account for £49bn of central public spending on skills, local infrastructure, employment support, housing, business support services and innovation. This would be supplemented by approximately £9bn of European common strategic framework funds.

Mindful of the need to temper growth ambitions with the amount of regeneration cash available in the Treasury’s coffers, it is likely Mr Osborne’s award will be considerably less, with forecasts predicting a possible £5bn.

The Government is in need of some positives as it heads into Wednesday’s Budget and the prospect of growth and appeasement to the regions might provide the short-term hit the coalition needs.

Lord Heseltine, accompanied by representatives of the Greater Birmingham and Solihull Local Enterprise Partnership, gathered in Birmingham yesterday to announce how the blueprint would work in practice.

Using the Birmingham LEP as a model, Lord Heseltine said: “The GBSLEP realises that the status quo is not an option when faced with the opportunities – and challenges – presented by a substantial Single Pot.”