I recently read the phrase "nostalgia for large amounts of public funding" with a wry smile. The “good old days” have left the country with a large deficit and now we must grow out of it. Saying it that way makes the economic downturn and the present period of austerity sound like a phase in childhood that will be familiar to anyone who has been (or observed) a parent with a difficult toddler in a supermarket queue!
Critics of the Government’s policy on the Growing Places Fund (GPF) suggest that it isn’t enough and that the weighting of distribution of the £500 million pot towards the greater south east area goes against the policy of rebalancing the economy. Only 5% of the allocation is going to Local Enterprise Partnerships (LEPs) in the north east and less than 15% to those in the north west. Contrast that with the vast majority of the two rounds of Regional Growth Fund (£1.4bn) allocations which have been made away from the greater south east, and you can see that with the GPF we have, albeit limited, funds being put to work in a different way, in other areas, to lever private sector investment and deliver growth from businesses. And there is a lot to be said for public funding, to the limited extent which it is available, being used to fuel further growth where growth exists in the local economy; and when the investment yields a return, for the funding to be put back to work through recycling the grant– the basic tenets of the Growing Places Fund. The prospectus can be found here and the closing date for LEP submissions is 20 December 2012.
Looking at this from another angle, where the GPF funding is applied to key infrastructure projects in LEP areas with enterprise zones (EZs), it could have a beneficial effect disproportionate to the size of the allocation itself. The sums involved in individual LEP allocations will only be comparatively modest, unless pooled with other investment, but where growth is then successfully encouraged in the EZ, the pot of the resultant business rates receipts which will be kept for the LEP to invest in the wider LEP area, will grow bigger and faster. It is why EZs which are identified as posed to deliver early and substantial growth have been favoured in chosen LEP areas. In suggesting pooling of funds with other investment, I can see the opportunity for TIF schemes being employed hand in hand with GPF monies – perhaps on their subsequent recycled phase as TIF legislation is slow to come forward. Maybe George Osborne will have something more to say on TIF next week?
And where’s the planning piece in this? Well, it has to be that robust local development orders are brought forward in tandem with the new planning policy framework of NPPF to facilitate delivery of the new development envisaged by LEPs for their EZs and beyond. We need to be looking to grow up sooner rather than later, out of this most difficult phase.