Government "mega fund" will help boost Gloucestershire economy

CHANCELLOR George Osborne has backed proposals for a regional "mega-fund" with Gloucestershire and other areas getting a share to boost economic growth and create jobs.

Handing Whitehall cash down to grassroots decision-makers was the centrepiece of a radical blueprint drawn up for the Government by former Tory Cabinet Minister Michael Heseltine.

The move to create a single funding pot to target regional growth comes as Mr Osborne faces intense pressure over his handling of the economy ahead of tomorrow's Budget.

However, details over the amount of cash that would be made available will not be announced until later this year, and the Government has indicated it would be less than the £70 billion identified by Lord Heseltine.

In its response to the Heseltine review, the Treasury agreed that transport, housing, and skills would be critical to the fund.

But it added: "There are some funding streams where the principles… point strongly to the majority of spend continuing at a national level.

"This is certainly the case for innovation funding, where specialisation not duplication is essential."

The creation of a single funding pot was among 81 out of 89 recommendations made by the Tory peer in his report No Stone Unturned, that were accepted by the Government.

Lord Heseltine said for too long Whitehall departments and civil servants had 'stifled' growth outside London.

He has already acknowledged the shift in funding would be 'traumatic' and likely to encounter opposition.

Under the single pot of money to be created in 2015, Local Enterprise Partnerships would bid for a slice of the cash to implement tailored long-term plans each had drawn up to kick-start their economies.

Responding to yesterday's announcement, Tory MP for Gloucester Richard Graham said: "I am in favour of localism and direct appeals to government where we can make a strong case."

And Lib Dem MP for Cheltenham Martin Horwood said: "I think this is a really interesting and radical move and it's important to get more money into the regional economy."

But he stressed the need for "democratic oversight" of the process.

Mr Osborne, below, said: "We asked Lord Heseltine to do what he does best: challenge received wisdom and give us bold ideas on how to bring government and industry together. He did just that, and that is why we are backing his ideas."

David Owen, chief executive of GFirst LEP said the Government's backing of the Heseltine report "signposts a new way of achieving growth outside London,

with LEPs ensuring that economic decisions happen at the local level."

He added: "In addition to a robust structure and business-led strategy, our LEP is delivering money, infrastructure builds, skills development and progress on employment, retail, tourism and apprenticeships to Gloucestershire."

On the eve of the 2013 Budget, Gloucestershire business leaders are calling for urgent action to help kickstart the economy.

Gloucestershire Local Enterprise Partnership has surveyed thousands of companies throughout the county about the issues that matter to them.

More than 80% of businesses said the price of fuel was having a detrimental effect on their business, while 90% wanted to see a reduction in business rates.

Some 41% of businesses thought the main rate of corporation tax should be lowered to align with the small companies rate at 20% and 35% of firms said that to assist companies forming and growing the Chancellor should simplify the tax system.

David Owen said: "What the results of the LEP pre-Budget survey are really saying is that businesses want to see action.

"Ahead of last year's Budget we quizzed our GL Ambassadors and one of the top priorities for action was to reduce fuel duty.

"This is still a big problem, particularly for our rural businesses and workers and will need further attention if our economy is to continue to grow.

"We also want the Chancellor to look at the views of our businesses to help stimulate growth and create jobs."

Last week the LEP allocated £3 million from its £8.4 million Gloucestershire Infrastructure Investment Fund for Robert Hitchins to build a roundabout on the A48 at Lydney which will unlock a major homes and business development at Hurst Farm creating 1,600 new jobs.

Mr Owen said: "We hope the Chancellor's Budget will focus on employment and helping our county prosper."