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Whitehall £2bn devolution plans on track, Clegg insists

By Western Morning News  |  Posted: July 03, 2013

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Nick Clegg has claimed prising £2 billion a year from the "clammy hands" of Whitehall to give to the regions is an "unprecedented step" – despite details emerging showing much of the cash was already being devolved.

The Deputy Prime Minster, who is overseeing the drive to give local areas more power, said the creation of the local growth fund from 2015 is "just the start of the process".

Last week, Chancellor George Osborne announced the fund – up to £10 billion over a five-year parliament – would help boost flagging provincial economies such as the South West. But the figure was well short of a "mega-fund" of between £50 billion and £70 billion called for by local growth Tsar Lord Heseltine.

A breakdown of the £2 billion-a-year being made available reveals:

Nearly half will come from a Department for Transport fund for new road and rail schemes which was being devolved to local authorities anyway.

A further £200 million was previously being given to local councils via annual transport grants.

Another £400 million comes from the controversial New Homes Bonus – money which would anyway have been handed out to councils as a reward for overseeing house-building in their local areas.

Regions will be invited to bid for most of the money through local enterprise partnerships (LEPs), including one representing Devon and Somerset, and another for Cornwall and the Isles of Scilly.

Speaking at the first of his new monthly press conferences in Westminster, the Deputy Prime Minister said the money is a "significant first step" in devolving funding to local areas.

"I was talking to Michael Heseltine about it on the day of the spending round, and he also accepts that this is the start of a process," Mr Clegg told journalists. "If you think that extracting £2 billion from the clammy hands of Whitehall departments is an easy task... well, I've found the hard way that it is not. This is a very, very significant, in fact an unprecedented new step of taking money away (from Whitehall)."

The coalition's devolution agenda includes a wave of so-called "city deals", giving areas greater power over transport, training and regeneration. Plymouth is set to be in the second wave and a "Cornwall deal" being worked up could be a template for rural areas.

Ben Bradshaw, Labour MP for Exeter, said: "This is pitiful and is another example of the zero influence the Liberal Democrats have on this government. It comes two weeks after a report by Ernst and Young showed inward investment to the South West had plummeted by 40%. They have no regional growth plan."

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