The Labour peer leading a party review into regeneration and the economy has set out plans to devolve cash and power to the regions
A Labour government would carry out Lord Heseltine’s ‘rejected’ radical plans to devolve cash and power to the regions, the peer in charge of drawing up manifesto proposals has pledged.
Lord Adonis said the Government would boost regional economies by letting councils and businesses take responsibility for key issues such as skills, transport and attracting investment.
The peer, Labour’s infrastructure spokesman, has been commissioned by party leader Ed Miliband to look at how a future Labour government can create economic growth.
Speaking to the Birmingham Post at Westminster, he said he was looking at the success of areas with combined local authorities, such as the Greater Manchester authority which brings together 10 councils.
Other areas of the country could benefit from similar arrangements, he said – but Labour would never attempt to force authorities to form partnerships if they objected.
He also said that there were too many Local Enterprise Partnerships (LEPs), economic agencies set up by the Government to promote economic growth, and mergers would make them more effective – but this also could only happen with local support.
Lord Adonis warned that regions such as the West Midlands had been let down by the Government’s decision to devolve only around £2 billion to a “single pot” of funding for Local Enterprise Partnerships to spend.
Senior Tory peer Lord Heseltine had proposed a single pot of at least £49 billion – and worked closely with the Greater Birmingham LEP to draw up plans to spend a large proportion of the money in the region. But Lord Adonis said: “The problem with the Heseltine Agenda is that the government has largely rejected it, the local growth fund being a fraction of what Lord Heseltine proposed.”
He added: “There was a battle across Whitehall and unfortunately Michael Heseltine lost.”
Lord Adonis is to travel the country meeting councillors and employers to help him draw up proposals for Labour’s general election manifesto.
But he said a Labour government would look at devolving far more funding to the regions – particularly to spend on training and apprenticeships, he said.
“Firstly, I want to look at how we give real teeth to the Heseltine agenda which the Government has largely ignored, the local growth fund being only a fraction of the resources which Lord Heseltine proposed should be devolved.
“And I want to look at what could be done more radically, particularly in the area of skills funding, where a revolution in apprenticeships seems to me a critical national priority.”
He added: “We have a crisis of youth unemployment, hand in hand with a crisis of skills.
“It’s very clear that what’s needed is a dramatic increase in the quality and quantity of apprenticeships at large and youth apprenticeships for under-21 year olds in particular.”
Local Enterprise Partnerships had a crucial role to play in creating jobs and economic growth but many were not up to the task, Lord Adonis said.
But he ruled out scrapping LEPs and bringing back Regional Development Agencies – the regional arms of the Business Department that were created by Labour and scrapped by the Coalition government.
Instead, he is to look at ways that LEPs can work more closely with local authorities, at the same time as encouraging authorities to work together.
“I do not believe we need yet more musical chairs in terms of local institutions.
“But it’s very clear that most of the LEPs are fairly weak. They need a rocket boost.
“And the whole relationship between LEPs, central government and local authorities needs very serious consideration.”
The peer recently completed a review on behalf of the North East LEP, which covers seven local authorities including Newcastle, and recommended that the councils should form a combined authority,
“I’m glad to say the North East is in the process of setting up such a combined authority... I regard this as one of the most important things happening in terms of regional growth institutions.
“And my review will be looking very closely at the record of the LEPS and the progress towards combined authorities, to consider in particular whether combined authorities could become a standard pattern across metropolitan England, if that’s what the local authorities themselves wish to do in return for greater devolution of resources.”
At the same time, he will look at whether LEPs can be encouraged to merge.
But when it was put it to him that obvious candidates for merger were the Greater Birmingham and Black Country LEPs – which are separate bodies even though the Birmingham and Black Country economies are interlinked – he said that every proposal for a merger had to come “from the bottom up”.
Highlighting proposals for a mayor of Birmingham, rejected by city voters in a referendum last year, he said: “One of the lessons I draw from the referendums on mayors is that this is not going to work if it is imposed top down.
“The issue is how can create really effective models, champion them effectively, and then local authorities and LEPs seize the agenda themselves.”
While there was no suggestion of bringing back Regional Development Agencies, Lord Adonis said he did want to reform the Department for Business, Innovation and Skills so that staff were once again based in the regions, because too many were currently stuck in silos in London.
Lord Adonis has obtained figures showing that Advantage West Midlands, the former Regional Development Agency, employed 330 people in 2010.
But the Department for Business, Innovation and Skills now employs just 87 people at its office in Birmingham, its only office in the West Midlands. Even this is more than it employs anywhere else outside the south east.
There are 2,473 BIS staff based in London.
He said: “The proportion of BIS officials located outside London has fallen from 18 per cent to six per cent. Now this is frankly inexcusable.”
Despite his criticisms of the Government, Lord Adonis admitted that the last Labour government was also too centralising.
While the peer has a number of big ideas, he stressed that he wanted to listen to people in regions such as the West Midlands before drawing up proposals to be submitted to Ed Miliband. “I will be visiting all the major cities over the next six months, meeting the LEPs, the local authorities and a cross section of local businesses. I want to hear what people say.”