Path to a progressive future or trip down memory lane?

Yesterday’s publication of Lord Heseltine’s Review sent us on a nostalgic trip down urban policy memory lane. Reading through it brought back thoughts of how City Challenge had been utilised in the 1980s and 90s to promote a culture of competition between places for funds; how single regeneration budget and regional development agency core funding had been used in the 1990s and 2000s to draw together departmental economic development and regeneration finance; and how Local Economic Assessment had been used in the late 2000s to understand the economic function of localities and sub-regions.

It was nostalgic because many of Heseltine’s recommendations particularly around localism are things we have seen before: single funding pots; competition; local economic strategy; local growth teams; and cross public private partnerships. That is not to say the review is old hat, far from it. This should have been the interventionist starting point in 2010. But instead we got a stand aside approach from government and a hasty disruption of what had gone before.

The review does have some useful newish ideas as well. For instance, the proposal to rejuvenate the local economic development role of local government through a statutory duty is extremely positive.

However, to see this as progressive is somewhat of a folly. It is based on an individual’s perception, on narrow definitions of economic growth, and a policy rhetoric that is not necessarily balanced with today’s economic challenges. A truly progressive and alternative review would have in our view been determined by three factors.

First, whilst recognising that more powers are needed for localities to stimulate change, there is a far more inherent challenge in enabling growth which is the structural and centralist barrier of central government. The key barriers to growth do not lie in the hands of individuals and localities but in an archaic welfare system, a silo-operated departmental culture, treasury orthodoxies, a central government to local government disconnect, and a series of regulations which prevent local development. Central structural reform is needed on a big scale to enable local economic change.

Second, the review is viewed upon simple and traditional ideas of growth which is based upon increasing competitiveness, gross domestic product and the productivity of the UK as a whole.

Local economic development is not all about growth; instead it is respective and considerate of social and environmental concerns. Effective places are shaped by all forms of capital including social and human and not just economic and physical. There needs to be a more reflective and alternative understanding of growth and the inputs to it in its widest sense in policy-making.

Third, the review promotes homogeneity of place when it comes to local economies. Any allocation of funding pots to local enterprise partnerships (Leps) will undoubtedly be based upon a demonstration of the ability of area’s to grow and develop. All Lep areas are intrinsically different with varied economic and social challenges; meaning that growth may well not be the only applicable outcome for places where social inequality, poverty, and environmental concerns are key challenges. There needs to therefore be a recognition of the heterogeneity of place and its economic, social and environmental priorities.

Heseltine’s review provides a key impetus for government to reflect upon its economic policies, something which is long overdue. In effect, it is now up to government to respond; if they go with the majority of the recommendations, it would represent a significant u-turn on plan B.

From our perspective, there is a danger that it could simply lead to a return to our unsuccessful past in terms of economic development instead of a socially just future.

• Neil McInroy is chief executive of the Centre for Local Economic Strategies (CLES). Matthew Jackson is head of research at CLES