Johnson faces battle for £1.4bn growth fund cash

London mayor Boris Johnson faces an uphill battle with his plans to co-ordinate bids from the capital for cash from the new £1.4 billion Regional Growth Fund, the Government's chief adviser on the scheme made clear yesterday.

Lord Heseltine: Poor areas depend on central government redistribution
Lord Heseltine: Poor areas depend on central government redistribution

The fund has been set up to encourage growth of private sector jobs in parts of the country that are especially dependent on public sector employment. Last month’s growth white paper said that places "where there is currently high employment, low levels of deprivation and a vibrant private sector" may struggle to demonstrate that they meet the criteria for investment.

Lord Heseltine, chair of the panel advising on the use of the fund, said yesterday that this meant that "significant parts" of London and the South-East would find it hard to make successful bids.

Speaking at the Future of London conference, for which Regeneration & Renewal is the media partner, he said: "In chairing the panel I have got to recognise how wealth has been inexorably sucked from the provinces into London over the past 50 years. It will be in our minds".

He said the fund demonstrated the critical role of central government in regeneration. "Competition is a fundamental to allocating scarce resources," he said. "It means you can’t eliminate central government. Poor areas depend on central government redistribution. They would never be able to regenerate from their own resources."

Heseltine also queried whether the proposed local enterprise partnership for the Thames Gateway would be adequate to capitalise on the "extraordinary opportunity" that the area offers. "[LEPs] don’t have the resources to go where the market doesn’t go," he said. He said central government’s ability to co-ordinate the delivery of new facilities such as universities and health centres was essential to creating "fresh, exciting communities".

But he reiterated his endorsement of the Government’s plans to introduce directly elected mayors in the 12 largest English cities. He said that putting one person in control of public sector resources in an area offered "huge" potential. "It will be the greatest boost to local opportunity seen in my lifetime," he said.

Lord Heseltine is chairman of the Haymarket Group, which publishes Regeneration & Renewal.

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