Government backs Michael Heseltine's growth plan

A plan to boost jobs devised by Tory peer Lord Heseltine has received government backing.

Nearly all of the changes propesed in his No Stone Unturned report, which suggests devolving decision-making and spending controls to the country's regions, will be taken up, the Government announced today.

Lord Heseltine had called for the Government to slash red tape and hand back decision-making powers to Britain's major cities giving them greater say over matters including transport, housing, and vocational training.

He said for too long Whitehall departments and civil servants had "stifled" growth outside London.

The Government is accepting 81 of Lord Heseltine's 89 recommendations in part or in full.

The recommendations directly benefit England's 39 business-led Local Enterprise Partnerships (LEPs), delivering them an immediate funding boost worth £500,000 over the next two years to be spent on drafting plans on how best to create economic growth.

The Government will create a single pot of money, in 2015, which the LEPs' will bid from and spend on projects of their choice.

That money will come from capital cash currently allocated to departmental budgets and European Union funding, although the exact amount will not be known until 2014.

In return for the granting of greater financial control, the Government will make LEPs set out their long-term plans in Local Growth Deals.

The Government has also backed Lord Heseltine's suggestions for closer working between councils, civil servants, business leaders, schools and universities.

Not all the recommendations were accepted, with Lord Heseltine's call for the Government to "clarify urgently" its position on increasing airport capacity in the South East rejected.

Chancellor George Osborne said Lord Heseltine was able to "challenge received wisdom and give us bold ideas on how to bring government and industry together".

"That is why we are backing him today," he said.

Business Secretary Vince Cable said: "The plans will boost the UK's competitiveness".

He added there would also be further support for key industries, including the aerospace and automotive sectors.