Chancellor ‘must prioritise economic development’ in spending review, say West firms

June 23, 2013

West businesses will be looking for Chancellor George Osborne to reallocate departmental budget savings to local areas so they can determine their own economic futures in his spending review this Wednesday.

Businesses feel the Government needs to meet its commitment to implement Lord Heseltine’s recently-announced proposals for a Single Pot.

However, there is uncertainty is just how big the pot will be. While Lord Heseltine wanted £12bn annual funding, murmurs from Whitehall are that only around £700m will be allocated annually for LEPs to bid for competitively.

Recent survey results by British Chambers of Commerce showed 68% of businesses identified economic development with focus on trade promotion and business support as the top priority in the spending review, with education next (57%) and transport  third (47%).

Phil Smith, managing director of Business West, the business support organisation that runs Bristol Chamber of Commerce and the Bristol Initiative, said: “We would like to see some real commitment from Government to creating a Single Pot fund that will make a significant difference at a local level, giving LEPs and local councils greater control over spending on local economic priorities.

“This is critical to the future of LEPs and their ability to make a difference. Without the funding and commitment from Government it is difficult to see how these business-focused partnerships can actually deliver real change at a local level.

 “This is the Chancellor’s last chance to make a real difference to the health of the UK economy, this side of the next general election. It is clear where businesses believe Government spending should be prioritised and that is in supporting the economy. We would like to see a massive boost to capital spending and a focus on investment in capital assets like transport, energy, digital and housing infrastructure. Only when this happens will we see any real sustainable change in both our local and the national economy.

“Furthermore, the UK’s overall export performance is still not where it could or should be. If we are to win the ‘global race’ described by the Prime Minister, we need a huge increase in the resources dedicated to supporting international trade. But these measures must be focused on frontline support to businesses, not the extension of agencies or bureaucracy in Whitehall.

“Businesses across the UK are crying out for more support to help them drive growth, boost trade overseas and create jobs and wealth. The Chancellor must be brave and listen to the business community, and seize this opportunity to go all out in the name of growth.”

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