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Failings of the regional growth fund

Emma Maier
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The reshuffle brought to the fore the government’s focus on economic growth. As two parliamentary commentators have noted this week, local growth is key. Yet local action continues to be curtailed by centralised approaches and budgets.

An inquiry held by the all-party parliamentary group on local growth concluded that despite the diverse structures and approaches of local enterprise partnerships, success is dependent on Whitehall devolving power and streamlining its support of local growth activities. It is not surprising that the inquiry highlighted the confused mass of programmes and funding streams for youth employment and skills support.

The APPG’s 12-point plan argued that a new wave of ‘local growth deals’ modelled on city deals could offer the locally led financing needed to drive growth in the face of centralised agencies and funding streams.

Launching the report, the group’s chair Brandon Lewis spoke of gaps and weaknesses that the government must address as a matter of urgency. In his new role as local government minister, Mr Lewis has the opportunity to be an advocate for local growth and to focus on providing the devolution to make it a reality.

Meanwhile, the public accounts committee also turned its attention to local growth and the failings of the regional growth fund. The fund, administered by the Department for Communities & Local Government and the Department for Business, Innovation & Skills, was worth £475m in year one but faced a £366m underspend. The solution was to provide endowments to intermediary bodies, including £218.9m to seven councils. PAC chair Margaret Hodge questioned Whitehall’s capacity to make the right decisions about where money should be spent locally and called on departments to engage more with local bodies, including LEPs.

Councils have a long track record of providing grant funding to businesses and entrepreneurs to support their local economies: it is time government recognised this important role. LEPs are more variable but could have the potential to deliver local results quickly - but as the APPG observed they need core funding to ensure adequate staffing and the ability to balance local interests. Over to Mr Lewis.

 

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