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Economy: Prosperity of Towns

Volume 758: debated on Wednesday 7 January 2015


Asked by

To ask Her Majesty’s Government what proposals they have for promoting the economic prosperity of towns that do not form part of city regions.

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so, I remind the House of my interest as a member of an urban local authority in a non-city region area.

My Lords, the Government’s long-term economic plan is already securing a better future and a stronger economy for our country. We have put in place a range of tools and incentives that give communities the freedom and flexibility that they need to drive economic growth. Growth deals build on the success of city deals and mean that every area of England, rural or urban, can benefit from powers and funding devolved from Whitehall.

My Lords, that Answer from the Minister sounds very nice, but the reality is that people in those parts of England that do not form part of big city regions—particularly, for example, those in the north of England that are not within the aegis of a handful of large authorities—feel very much as if they are being left in limbo when it comes to the devolution of power and the provision of resources to local authorities. Areas such as west Cumbria, east Lancashire —where I live—and many others feel left in limbo. Does the Minister understand that?

I am always pleased when my noble friend feels that I am being nice. Let me assure him that this is not about leaving any authority in limbo. The 39 growth deals that have been agreed thus far, and the additional funding for growth deals announced by my right honourable friend the Chancellor of the Exchequer in his Autumn Statement, will ensure that all authorities across the country can apply and can successfully bid for such growth funds. Indeed, Lancashire LEP has already secured £233.9 million from the Government’s local growth fund, which it estimates will create up to 5,000 jobs for the local area, and 6,000 new homes as well.

My Lords, the Minister has just referred to the Autumn Statement. He will be aware that there is a widespread belief that the spending decisions in that Statement were driven at least as much by electoral considerations as by economic considerations. Will the Government now publish the details of the assessments of all the projects that competed for that funding, so that people can make up their own minds about how those decisions were taken?

Let me assure the noble Lord that this Government put the economy first, and indeed we are achieving success in that regard —I am sure that he appreciates that. As for the announcements on the second bid, I ask him to show a little patience, as we will be announcing those very shortly.

Is my noble friend aware that in England’s largest town, Northampton, economic prosperity is happening? The university on two campuses is now provided with a nice new site on the river, there is a new railway station and a new innovation centre. The local authority, which happens to be Conservative controlled, and the leader of that authority are providing true leadership. None of that would be possible had that authority not been supported by Her Majesty’s Government, and in particular by Her Majesty’s Treasury.

My Lords, one of the acknowledged challenges of supporting growth, whether for city regions or otherwise, is the allocation of funding in what the noble Lord, Lord Heseltine, called “penny packets”. LGA research has shown that central government funding for growth has become even more fragmented, with the number of funding streams now having doubled since the noble Lord’s report. The LGA found that there are 124 funding schemes for local growth, spread across 20 government departments, amounting to £22 billion. On what basis does the Minister claim that this is providing value for money, and how is the related bureaucracy helping SMEs in particular to access support?

The noble Lord should look at the facts. My noble friend Lord Heseltine has been working very closely with the Government, but I can do no better than cite an area that the noble Lord, Lord McKenzie, knows well. In Luton, there has been a successful LEP initiative on growth funds—with Woodside Link, Bedfordshire, the building of the new link road in Houghton Regis will enable major employment growth and help reduce congestion north of Luton. The noble Lord need look no further than his own town, where he will see the benefits and the results of the Government’s schemes.

My Lords, would the Minister care to comment on the disproportionate allocation of resources and capacity for growth for many of the areas in the north of England, both the north-west and the north-east? This Government are disproportionately favouring his noble friends’ sort of areas at the expense of local authorities such as Preston and Lancashire. Does he agree that one of the most effective things for enterprise is for the local authority to ensure that it can match funding to make areas places that people want to live in, with decent services?

Suffice it to say that I do not agree with the noble Baroness. The local growth funds have demonstrably shown success up and down the country. I quote:

“Reaching this landmark deal is a real demonstration of central government’s confidence in our economic potential”.

That is from Edwin Booth, the chair of the Lancashire local enterprise partnership. Last time I checked, that was not down south, where the noble Baroness asserts that some of my noble friends may be.

My Lords, what mechanisms do the Government have to allow non-metropolitan local authorities that want to move ahead and work with neighbouring local authorities cost-effectively to move towards greater devolution? Is a channel for them to achieve that open now?

The essence behind local growth funds is exactly as my noble friend says. It is about empowering people at a local level: local enterprise partnerships, local councils and local businesses coming together to bid for local funds. Demonstrably, the 39 deals agreed thus far—and the new deals that we will be announcing—will reflect exactly what my noble friend seeks to achieve, which is local communities working together to achieve growth and jobs for their local area.

My Lords, does not the Minister realise that the noble Lord, Lord Greaves, reflects a view held especially in Cumbria and the north-east of England that, although they support the city regions, they feel left out, especially when the major infrastructure investment, HS2, stops 100 miles to the south of Newcastle and Carlisle in Manchester and Leeds? We will end up with a worse transport service, not a better one.

We all await the outcome of HS2. I believe that it will be positive for the country and, indeed, for the north. My right honourable friend the Chancellor of the Exchequer has already shown the Government’s commitment in the announcement that he has made in support of the regions across the country, and I am sure that if the noble Lord awaits the outcomes of the second bidding round, some of his concerns will be addressed.