Opposition leaders battle it out to win the hearts of the regions

Only a week following Labour leader Ed Miliband’s promise to support the businesses in major cities and towns outside of London, the Government announced plans to hand over up to £6bn in funds to create jobs, train workers and develop greater infrastructure across the country.

Both leaders ear hoping reversing the widely-held perception that the government, and those of the past, have neglected the regions will return key votes come the general election next May.

Despite the Barclays and BGF Entrepreneurs Index reporting last month that Wales, the Midlands, the North-West and East Anglia each registered over a 40% rise in high-growth companies, outperforming the capital, many voters and politicians believe the UK still remains socially and economically unbalanced.

Labour plans

Labour leader Ed Miliband has promised to devolve £30bn of spending to the English regions to boost economic growth outside London. To opposing critics who claim his policies are anti-business, Miliband says he wants local authorities in major cities to band together to create regional economic “powerhouses” to rival the capital in creating jobs.

He claims powers would be transferred from central government to existing councils and encourage them to pool their resources to create “combined authorities.”

Miliband believes these authorities could provide the clout to successfully stimulate growth in their areas, as shown in Greater Manchester.

Over the past three years, ten councils in Greater Manchester have worked together to plan and schedule economic development, regeneration and transport functions as part of a long-term strategy to gain sustainable economic growth.

Currently, local business rates are handed back to Whitehall before then being redistributed to councils, but Labour argues it is time local businesses and leaders had more control over how money raised locally is spent in that area.

The trade body, the EEF, remains cautious: “There will also be a financial impact and business will want to know whether it will be targeted to raise some of this revenue through additional taxation. Above all else businesses want consistency and certainty, so that current policies to promote growth and investment such as export support from UKTI, R&D tax credits and support for innovation through the TSB are not reduced.”

The review seems similar to Michael Heseltine’s growth review produced for Chancellor George Osborne in 2013, and Adam Marshall, policy director at the British Chambers of Commerce, says proposals giving businesses more say in how public funds are used in their region is a positive move.

“Decisions on local growth are best taken when businesses and councils decide what arrangements work best for their areas, and deliver these accordingly,” Marshall said.

“In a world where more funding and tax revenues are devolved, however, businesses need the strongest possible say over both local economic plans and how money is spent.”

Government plans

However, the Tories accuse Labour of “playing catch-up,” as the government recently agreed to provide £6bn of funding to local authorities, in regions outside of London.

These Growth Deals will be used to invest in a series of projects aimed at revitalising large cities and towns outside the capital.

Similar to Labour’s plans, the money will be allocated to “local enterprise partnerships” across the country– non-statutory bodies that will be responsible for monitoring enterprise zones.

Projects beginning in 2015 to 2016 are expected to be matched by local investments worth around twice the contribution from central government.

The Prime Minister David Cameron said: “Growth Deals are a crucial part of our long-term plan to secure Britain’s future. For too long our economy has been too London-focused and too centralised. Growth Deals will help change all that. They are about firing up our great cities, towns and counties so they can become powerhouses.

“By trusting local people, backing business and investing in infrastructure, skills and housing, we can create thousands of new jobs. And that means more economic security, peace of mind and a brighter future for hardworking people across the country.”

However, as alluded to by Andy Pike, Professor of Local and Regional Development at Newcastle University, devolving power from London to regions shall require a greater shift in how the UK operates at local and national level.

“The often overlooked issue is what needs to happen in Whitehall and Westminster to make such decentralisation a reality and to make it work. Austerity politics in what is still a highly centralised system in England has made this more difficult. It helps dissuade politicians from releasing more powers and resources to the local level and it acts as a disincentive to trust local politicians and officials to develop credible plans, wield power in accountable ways, spend their money wisely and deliver policy effectively,” Pike said.

The UK’s economic future looks bright, but in what sectors do the employees of the future work? This article outlines which sector of the economy is growing fastest and which ones need to do some catching up.

Jermaine Haughton is a journalist and digital media professional.