Britain to devolve public spending to boost growth

LONDON (Reuters) - A plan to devolve potentially billions of pounds of public spending to local authorities and businesses in Britain to boost a stagnant economy won a green light from the government on Monday.

The Treasury said the coalition government had approved almost all the recommendations in a blueprint drawn up by Michael Heseltine, a former Conservative deputy prime minister.

The scheme will see public money for projects such as housing and transport, now controlled by various government departments, pooled into a single pot from 2015.

Regional groupings of local authorities and businesses - known as local enterprise partnerships - will bid for the funds and, if successful, oversee how they are spent.

The amount of money to be allocated to the new "Single Local Growth Fund" will be decided in a spending review to be published in June.

Heseltine had said shifting public spending away from central government would make the country more competitive.

He said on Monday the government's decision to accept the majority of his recommendations was "the most strategic supply-side decisions" he could recall.

"In essence, it accepts that London and its functional bureaucracies should rely more on the incentivisation of England's provinces and less on central instruction," Heseltine added in a statement released by the Treasury.

One issue left for a later decision was how to devolve funding for training and apprenticeships to the local level.

Officials at the Department for Business Innovation and Skills (BIS), led by Liberal Democrat Vince Cable, have argued that fixing Britain's skills shortage required a national approach, people familiar with the negotiations said last week.

The government rejected a proposal to make greater use of its existing powers to investigate foreign takeover bids of British companies, arguing Britain was committed encouraging open markets and inward investment.

(Reporting by Tim Castle and William Schomberg; Editing by Stephen Powell)

Source: http://news.yahoo.com/britain-devolve-public-spending-boost-growth-000642439--business.html

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