Economy: Growth

Lord Shipley Excerpts

Thursday 6th December 2012 Lords Chamber

[Lord Shipley]

Every time I cross the Gateshead Millennium Bridge I think back 25 years to a polluted River Tyne with little economic activity. The transformation has been inspirational. It is the result of public sector intervention through urban development corporations, led largely by local people triggering private sector investment. Those corporations were, of course, the creation of my noble friend Lord Heseltine, who had a compelling vision of what could be achieved in our cities.

That vision is here again in this report: England is too centralised and faster growth cannot be delivered by Whitehall. The Government have taken several steps to address this: city deals, the Localism Act, and enabling local authorities to share in business rate growth. They now need to go a step further so that local enterprise partnerships, the private sector and local authorities working together and empowered by central government can drive growth in their localities.

Most of Whitehall operates in silos and my noble friend Lord Heseltine is right to say that the Government need to think more in terms of places outside London and how to build on their unique strengths. The abolition of government offices in England was a mistake. I do not advocate government offices which centralise public service delivery in their regions, but I do want government offices which bring key Whitehall departments into a single place with a duty to drive growth and unlock barriers to growth.

Such a government office would work as a partner of the private sector, local authorities and LEPs. I agree entirely with my noble friend Lord Heseltine that LEPs must become engines of growth and I welcome the Chancellor signalling yesterday that a greater proportion of growth-related spending would be devolved to LEPs from April 2015 in transport, skills and employment.

Central to this are enhanced roles for FE colleges and the private sector. Recently I was at an event in the new creative quarter in Nottingham. The event was held in New College, Nottingham, a founder member of the Gazelle Colleges Group formed last year by five leading FE colleges in England: New College, North Hertfordshire, Gateshead, City College Norwich and Warwickshire College. There are now 20 of them, all seeking to reshape FE colleges by putting entrepreneurs in a more strategic position and focusing on self-employment and new business development. They are working to align local growth clusters to support business formation and the delivery of appropriate skills. They should be commended for this.

This report has attracted strong support from the private sector, but there was a hint, initially from the British Chambers of Commerce, that the report focused too much on institutions. I do not think that is valid because institutions matter. We need our chambers of commerce to be delivery partners of the LEPs in business support and training, and if the chambers maintain a voluntary membership structure, as they seem to prefer to do, we should create a one-stop shop through the chambers which businesses positively want to join.

A local structure is now emerging composed of LEPs with authority and resources, enhanced private sector support for business, as outlined by my noble friend Lord Heseltine, and local government leading the growth agenda, with all three partners being supported by central government,

Eleven words in this report are vital, although every word is important; that,

“there are some things only government can do to drive growth”.

This report shows us how.