European policy consultants
Rural development and renewable energy

Heseltine review "Leaving no stone unturned in the search for Growth" (31st October).

"The second precondition for economic transformation is stability. If we are to inject confidence into the economy, we need stability. Investors demand it. They invest against five to 10 year plans and want to know that the rules of the game will not change. The need for certainty about our future relationship with Europe is a prime example."

Recent government announcements, such as the 'review of competencies' and the prospect of a referendum at some time within the next few years, has placed UK's future relationship under a real cloud. The Heseltine review draws attention to some of the implications of this for business.

Lord Hesltine recognises that much of the body of regulation in the UK is conceived in Brussels. He commends the work of Foreign Secretary William Hague in asking all Departments to provide details on EU business within their responsibilities. He says that the Foreign Office is taking a strategic role making sure government activity in Europe is proactive, joined up and produces the desired outcomes.

He also commended the initiative by Norman Lamb MP, when he was Parliamentary Under Secretary of State in DBIS, in establishing 'the Likeminded Group on EU Growth'. Bringing together ministers from 16 Member States, the group has met several times to discuss areas of mutual interest and agree shared outcomes to the benefit of all member states. Lord Hesltine says this proactive approach to European relations is to be commended and is an exemplar ministers at all levels should follow.

As Lord Hesltine puts it, "It goes without saying that a secure and affordable supply of energy is essential to everything we do. It also provides opportunities for growth."

As he points out, "as recently as three years ago, it was predicted that the lights would have gone out by now as energy suppliers struggled to meet the needs of the country. This proved a false prophecy as our gas supplies continued and the economic crisis reduced demand. This has not, however, avoided the problem. It has simply delayed it."

For the country’s energy needs to be met, the Government needs a clear and consistent long term energy policy that indicates what our projected needs will be and how they will be met, by when and by whom.

He concludes that without real certainty about the UK’s long term energy policy, private investors simply will not risk the enormous sums of capital required to build our energy infrastructure.

He recommends (61): 'The Government needs to set out a definitive and unambiguous energy policy, including the supporting financial regime, to give the sector the certainty to invest.'

"Many attempts have been made to improve and rationalise the business support environment. We have been through the experience of Local Employment Networks, the Training and Enterprise Councils (TECs), and Chambers of Commerce Training and Enterprise (CCTE). Most recently the Business Link face to face network was disbanded as part of the process of winding up the Regional Development Agencies. Despite these efforts, none of these initiatives survive today"

He concludes that our competitor economies have achieved a far more coherent and consistent approach to the organisation of private sector-led business advice and support. His solution is to build a business support infrastructure in this country, based around chambers of commerce.

Lord Heseltine sees the the chambers as being at the heart of a local, business-led support infrastructure, with far higher levels of membership and real influence. They would help to galvanise the performance of a far broader range of businesses.

He envisages them having a central role, working as the LEPs’ delivery partners, taking responsibility for co-ordinating and organising the delivery of the business support services set out in each LEP’s local economic plan, and providing a one stop shop for businesses so that they have easy access to business services.

One government source quoted in the Daily Telegraph said Lord Heseltine initially hoped to bring back the regional development agencies axed by the Government last year. However, ministers are adamant that they will not be replaced.

Lord Heseltine stops short of calling for the re-establishment of the RDAs, as he is reported to have said in earlier drafts, but he makes clear the need for a coherent policy on UK regions and growth, including in relation to funding. He still gives some clear hints as to his preferred route, saying for instance that he "welcome(s) the new structure for Ofsted, which is creating eight regions, each under a regional director".

In a candid comment piece in The Times newspaper on 23 August, Mr Heseltine claimed that the RDAs had provided a bridge between localities and Whitehall, and warned that government departments are now busy creating their own 'empires' in the regions.

While Mr Heseltine does not claim that this dispersed approach to localism adopted by different government departments is damaging, he warns: 'Good results will be difficult to achieve unless the reforms are carried out with commitment and determination by local authorities'.

Lord Heseltine is currently in charge of allocating the £1.2bn RGF (regional growth fund) as part of the government's plan to kick-start growth across Britain’s moribund local economies.

For the full report and recommendations, see www.bis.gov.uk

Lord Heseltine's report proposed regional infrastructure investments, including public transport, offshore wind and Severn Barrage projects, as routes to growth

Minsters have now (18th March ) broadly backed Lord Heseltine's plans to accelerate regional growth, raising the prospect of a greener budget and more ambitious clean energy policies.

The Treasury has confirmed it will accept over 80 of the recommendations put forward by Lord Heseltine in his 'No Stone Unturned' report of 2012, which set out a strategy to accelerate infrastructure investments as a means of restoring growth to the UK economy.

The Heseltine report also urged the government to set out a "definitive and unambiguous energy policy ... to give the sector the certainty to invest". He did not make specific recommendations about renewable energy, but praised the government's plans for offshore wind farms and welcomed proposals to tap tidal energy from the Severn, arguing that the controversial project would provide "the possibility of both a long-term source of energy and extraordinary economic regeneration".

The Heseltine plan was welcomed by companies across the green energy sector, which have been calling for greater policy consistency so they can capitalise on the opportunities offered by green energy infrastructure.

The responsibility for devising and implementing regional growth plans will fall largely to the bewly created local enterprise partnerships (LEPs), led by local business leaders working with local authorities and others, which have so far been largely starved of funds. LEPs will compete for funds from the growth pot, with money according to the quality of their bids.