Report eyes greater stability and growth in the UK economy

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A new report makes a series of recommendations aimed at injecting stability into the UK economy.

The independent report — No Stone Unturned in Pursuit of Growth argues for a major rebalancing of responsibilities for economic development between central and local government, and between government and the private sector.

Compiled by Lord Heseltine, the report makes 89 recommendations that aim to force stability into the economy, create the conditions for growth and maximise the performance of the UK.

Commenting on the report, Lord Heseltine said: ’Our ability to create wealth has suffered. Each day, more and more of the leading economies are enhancing their skills, adding to their strengths and grasping larger shares of the world’s wealth.

‘There have been initiatives and experiments for many decades. But successive governments have failed to set out a comprehensive long-term implementation strategy to turn thought into practice.

‘My recommendations do not single out a few headline proposals for areas we need to improve on. What we need is a new partnership between the private and public sectors, between local communities and central government. Only in this way will we get the best use of our limited public funds and leverage in private investment.’

Welcoming the report, Sir John Parker GBE, president of the Royal Academy of Engineering, said: ‘In my visits with the Academy to engineering companies around the country, I have seen the importance of strong local leadership and investment in communities, and look forward to discussing Lord Heseltine’s proposals in this context.’

Skills shortage
The report acknowledges pressure from businesses for streamlined access to qualified foreign workers to address domestic skills shortages, particularly in science and engineering disciplines, despite the annual quota for these workers being undersubscribed by 35 per cent.

It states: ‘Our first responsibility… should be to train the engineers — and other workers that we need — ourselves.

‘However, even if there were an immediate increase in the number of students starting engineering degrees it would be at least a decade before they could begin to fill the full range of engineering vacancies in the economy. In the meantime, immigration is the only option.’

Consequently, Recommendation 86 states: ‘The Home Office should undertake a targeted communication programme to improve business understanding of the skilled worker immigration rules to align perception and reality’; while Recommendation 87 concludes: ‘Government should review the regulations relating to immigration policy as part of the Red Tape Challenge process.’

Alan Richardson, chief executive officer, Cambridge Consultants, said, ‘Lord Heseltine’s report, which highlights that the engineering sector will lose 69,000 engineering jobs in the UK by 2020, is indeed worrying and hampers the UK’s ability to grow its science and engineering industry — a key sector for future economic growth in this country.

‘It is vital to the UK economy that we have access to the world’s best and brightest brains, and that is why we welcome his recommendation that we look again at immigration policies to make it easier for engineers to work and study in the UK.

‘Cambridge Consultants is looking to double in size in five years and it is our employees who will drive the continued success we have enjoyed so far. It is this ability to employ the most capable scientists, technologists, engineers and mathematicians — wherever in the world they are from — that will enable us to continue designing breakthrough products and technologies.’

The government will now consider Lord Heseltine’s recommendations.

Recommendations made by Lord Heseltine include:

  • The UK government to set out clearly a comprehensive national growth strategy that defines its role and that of local leaders and the private sector in the creation of wealth.
  • A National Growth Council, chaired by the prime minister.
  • Each Whitehall department to commit to play its role in support of the national growth strategy, including how it will work with its key sectors. They will be held to account for this by the National Growth Council.
  • Local Enterprise Partnerships (LEPs) to develop their own tailored local economic plans. From 2015–16 they would compete for a share of a single national pot to support growth over a five-year period. Under the current spending review this would account for £49bn of central public spending on skills, local infrastructure, employment support, housing, business support services and innovation. This would be supplemented by the current approximate £9bn of European common strategic framework funds.
  • Government and private sector to work together to create a strong, locally based business support infrastructure. The Chambers of Commerce would have an increased role in building a stronger relationship between businesses and LEPs in their area.
  • All sectors of industry to have a formal relationship with a government department, building on the examples in the automobile and aerospace industries.
  • Regulators to be required to take account of the economic impact of their decisions. This would include a restructuring of the regulatory regime.
  • The planning system to be injected with greater urgency.
  • Government procurement to be improved by employing an experienced chief procurement officer in every department.
  • Departmental non-executives to be given an enhanced role in departments, while a cross-government management information system should be put in place.

Source: BIS