Lord Heseltine has called for the UK to get back with the ‘world’s best’ as part of his research into stimulating growth in the UK.

His No Stone Unturned in Pursuit of Growth study recommends a ‘major’ rebalancing of responsibilities for economic development between central and local government, and between government and the private sector.

Heseltine declares that successive administrations have failed to implement a long-term strategy to create wealth in the UK.

Amongst his recommendations, of which he cites 89, is a request for the government to ‘set out clearly’ a comprehensive growth strategy which defines not only its role, but also that of local leaders and the private sector.

Furthermore, he calls for a National Growth Council to be chaired by David Cameron himself, as well as declaring that each Whitehall department should commit to play its role in the ‘national growth strategy’.

He advocates the creation of Local Enterprise Partnerships (LEPs) to develop tailored local economic plans. He says that from 2015-16 they would compete for a share of a single national pot to support growth over a five year period.

Under the current spending review this would account for £49 billion of central public spending on skills, local infrastructure, employment support, housing, business support services and innovation. This would be supplemented by the current approximate £9 billion of European common strategic framework funds.

In a speech given at Birmingham Town Hall, Heseltine used times of hardship to explain how the country has rallied.

‘Times of great crisis evoke memories of a time when this nation stood alone,’ he said.

‘”Don’t you know there is a war on?” prodded inactivity into life.

‘Today’s crisis is very different. The long term competitiveness on which our wealth depends is slipping away. To secure it we need a national commitment, discipline, every individual straining every sinew.’

Government reaction to report:

Chancellor George Osborne says:

‘I wanted Lord Heseltine to do what he does best: challenge received wisdom and give us ideas on how to bring Government and industry together. He has done exactly that. This is a report bursting with ideas and we will study it very carefully.’

Business secretary Vince Cable says:

‘A few weeks ago, I set out my own plans for a long term industrial strategy, based on government and industry working together in partnership in those areas where we can be world leaders. Lord Heseltine’s findings show where government can improve its performance in delivering better interventions. We will now need time to consider its numerous recommendations and will respond in the coming months.’

Industry reaction to report:

John Parker, president of the Royal Academy of Engineering, says:

‘I welcome Lord Heseltine’s emphasis on the importance of government being optimally focused on driving competitiveness.

‘At the Academy, we have been pressing home the need for an industrial strategy for the UK as essential for sustainable economic recovery. This must not be a return to the discredited ways of the past, but a framework for the future based on identifying core UK industrial strengths, shaping the landscape to support them and avoiding policies that might do damage. Only with such a framework in place can we create ‘the pull’ that defines the educational and skill requirements, the key research needs coupled with the necessary alignment across government departments.’

Stefan Knox, founder of Bang Creations International, says:

‘Firstly I am delighted that the government has the strength to engage an outside consultant – in the form of Michael Heseltine – to review its strategy.

‘For us as a business, having localised budgets to help businesses in the form of LEPs is a great thing. The grants which our clients have received under the MAS scheme or the UKTI passport to export programmes have been a vital boost for many, and in turn for us as a business. Our clients go on to grow businesses with the support they get from LEP support and in turn increase GDP, increase tax revenue and create jobs.

‘What amazes me is that for a little investment in a business, you can get a terrific return. The passion and drive of many starts up is worth backing, and as Michael said on Question Time – the skill is in backing the winners.’

Daniel Todaro, managing director at Gekko, says:

‘Kudos to Lord Heseltine for having the integrity to call out the Government’s disconcerting growth policies. Even though the summer we’ve just experienced was a fun and joyful distraction from the economic predicament we’re currently facing, it remains an issue of critical importance – one that’s seemingly taken a back seat with Cameron, who is more concerned with taking credit for the Olympics, and exploiting sentimentality to try and rescue his popularity.

‘It’s clear that the government isn’t aligned with the real issues and concerns affecting businesses, and it needs to get behind the companies across the UK which are looking to grow and maximise their profits. It’s refreshing to see that with Lord Heseltine’s remarks, we now may, finally, have some kind of well thought-out, long-term strategy being put in place, rather than continuing to ignorantly forge ahead with the idea that deregulation will solve everything.’

Tony Banks, entrepreneur and chairman of Balhousie Care Group, says:

‘Lord Heseltine’s suggestions are timely and appropriate: achieving economic recovery is one thing, but it will only be safeguarded by a realistic strategy for growth in the longer term. The notion of Local Enterprise Partnerships is compelling because the devolution of power to local cities, and presumably into the hands of those who know best the idiosyncrasies of regional economic conditions, will only serve to bolster micro-economies and decrease the often counterproductive meddling of Central Government.

‘If this regional strategy worked, then the role of a National Growth Council would correspondingly make sense. For me what Lord Heseltine’s suggestions promise is a new transparency as well as the chance to create an infrastructure conducive to growth, and genuine consultation with the business people on the frontline. However, the cynic in me wonders whether any of these suggestions will be acted-upon and come to be realised: I keep my digits crossed.’

Malcolm Piper, director of Tandem Invoice Finance, says:

‘Boosting local economies by improving business support and infrastructure, finding a working solution to the South East Airport saga and ensuring foreign interests in our nations favourite brands which serve to lift local supply chains can only be positive steps. What’s critical is that there is real ownership within central government and real action to implement long term change, especially where there’s a proposal to devolve £58 billion of business support funds to Local Enterprise Partnerships.

‘What the economy doesn’t need is another plan that doesn’t come to fruition. What the economy does need is to get back on a path to growth and what’s absolutely vital is that business owners see value in the proposals and that government is transparent in implementing them.’

Paul Carter, leader of Kent County Council, says:

‘Lord Heseltine is completely right to stress the importance of infrastructure as the foundation of economic growth. The fact is, it takes far too long to get public infrastructure built in this country. There’s a massive need for significant projects like the 3rd Thames Crossing, but historically government have been too slow in getting their act together and delivering more in line with private sector timelines.

‘Whitehall needs to free up and empower local government to take the right decisions alongside local business leaders to boost the economy and create jobs.

‘What we need are schemes like the Regional Growth Fund, which is localism at its very best: local government, again working alongside with local business leaders, taking informed decisions based on relevant knowledge of the economic situation, as we are seeking to in East Kent with our £35 million fund.’

Patrick Woodman, policy manager at the Chartered Management Institute, says:

‘Lord Heseltine’s wide-ranging review contains some important recommendations which we hope the Government will accept. As he points out, businesses with strong management and leadership are much better equipped to overcome the hurdles that face growing companies.

‘Yet too many UK companies struggle because they have poor management practices in place. Bad management is harming UK business and must be urgently addressed. That’s hardly a surprise when only one in five managers is qualified in their profession.’

TUC general secretary Brendan Barber says:

‘Lord Heseltine’s review offers a refreshing new strategy for growth. But it must be embraced across government if it’s to make a difference.

‘Boosting the powers and lending capacity of the British Business Bank will be welcomed by unions and credit-starved businesses, though it may find fewer friends in the Treasury.

‘The TUC shares Lord Heseltine’s vision of collaboration between the public and private sectors, with unions and employers working together to promote growth.

‘But he will have his work cut out in convincing ministers of this new approach, who are going to have to change their attitude towards civil servants, public bodies and unions if they want this strategy to succeed.’

John Longworth, director general of the British Chambers of Commerce, says:

‘Lord Heseltine’s analysis of the state of the UK economy is compelling. Businesses will welcome his call for steady, long-term thinking to improve the UK’s economic performance. Yet Heseltine’s prescription for action focuses too much on institutions, rather than on the fundamental barriers to business growth.

‘As long-standing campaigners for a British Business Bank, it is helpful that Lord Heseltine’s report acknowledges the fact that there is a structural problem around long-term, patient loan finance in Britain and that the Business Bank offers a possible solution. This is a much more fundamental issue for UK competitiveness and growth than the structure of government.’

John Cridland, director general of the Confederation of British Industry, says:

‘I welcome Lord Heseltine’s review. It identifies a wide range of levers capable of promoting growth which the CBI has been calling for for some time, from education to infrastructure, and from planning to access to finance. It is a thoughtful contribution to the growth debate.

‘His key point is that we need more local action and leadership, which must be right. To successfully rebalance the economy towards private sector growth, every part of Britain needs to grow – we mustn’t just rely on the usual suspects of London and the South-East.’