Let's hope local democracy benefits from what appears to be George Osborne's support of Heseltine's proposal to boost local funding powers.
Peter Hetherington
Is the economic map of England changing, with significant implications for local government? Last month, in a report commissioned by Downing Street, Lord Heseltine recommended that Whitehall should be slimmed down to accommodate a staged process of decentralisation. A sum of £12bn a year would be channelled from government departments to small, emerging agencies - little-known local enterprise partnerships, or LEPs - charged with encouraging job creation through locally inspired programmes for growth.
Perhaps surprisingly, chancellor George Osborne appears to have warmly embraced the principle of Hezza's grand plan - if not, as yet, produced the cash upfront. The idea involves a network of 39 LEPs bidding for cash from a yet-to-be-determined "single pot" combining transport, housing, welfare-to-work and skills programmes. This implies winners and losers. It's a classic Heseltine approach, which achieved mixed results when he was deputy prime minister.
In the chancellor's autumn statement, these LEPs - business-led, with no democratic mandate, but including some council representation - were invited to apply for a modest £250,000 annually to draw up "strategic" growth plans.
The government says it agrees with Heseltine "that local business leaders need to have the tools and levers to drive investment and growth in their areas and that means devolving funding powers from central government".
Osborne says further details will be set out in the first half of next year, thus leaving more questions than answers about a package that appears to mark a modest government step towards a loose form of regionalism. Yet this is the same government that arbitrarily scrapped eight regional development agencies, at substantial cost, soon after taking office. So, don't hold your breath: this "single pot" won't be available until 2015, the year of the next general election.
The subtext of Heseltine's report was simple: by investing disproportionately in London and the south-east, the government was failing to meet an early pledge to rebalance the economy. Perhaps as a north-west MP, Osborne realised he had to make some gesture towards regional growth.
But, as a leading economic geographer noted, his proposals are "pretty threadbare", with the government elevating LEPs to a level some hardly deserve. Regional development agencies, which they were meant to replace, had specialist staff, largish budgets and, crucially, were underpinned by legislation.
So should we be worried by a move that appears a partial U-turn? First, consider the plight of English local government. A recent Audit Commission report Tough Times 2012 showed that while town halls overall have endured cuts of 9.3% in two years, amounting to £5bn, the councils in greatest need, with high jobless levels and associated ills, have seen budgets slashed by more than 14%, with worse to come.
Finances sometimes rest on a knife-edge. The commission talks of "financial stress" among a sizeable minority, with 12% of councils representing an "ongoing risk" to deliver their budgets. A further 25% are classed as "future risks".
By the time of the next election, many authorities will be pale shadows of local government in 2010, when this government took office embracing "localism" - which, in reality, has meant freedom to slash services, if not quite burn them, yet.
Imagine in two years' time as the chancellor ratchets up the rhetoric against the role of town halls, and councils view another five years with panic. Finances of some will be critical. By then, some LEPs - by no means all - may be portrayed as bright, new alternative local institutions, blessed with cash found from somewhere, to "transform" local economies. But at what cost to local democracy and accountability?
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