Government Vs City Hall In Economic Growth Funding Spats

Rachel Holdsworth
By Rachel Holdsworth Last edited 70 months ago
Government Vs City Hall In Economic Growth Funding Spats

Remember back during the election, when Boris Johnson said he was the candidate most likely to get the best deal out of the government? Of course you do; we bet you think about it every day. Well, two recent stories indicate things may not be going the way the Mayor hoped.

A letter from Boris to Chancellor George Osborne in April 2012 reveals the blond one very unhappy at what he saw as the government excluding London from grants under the Regional Growth Fund. This is supposed to help promote economic growth and jobs, particularly in areas that have been dependent on the (currently shrinking) public sector. In three funding rounds London has been awarded just £9m from a £2.4bn pot, and Boris was fuming:

It is clear... that London is being excluded from serious consideration by the Fund... I am reluctant to encourage my partners in this way if the roulette wheel will never spin in my favour.

Perhaps this is a good time to recall what a Number 10 official hinted darkly at back in September, when they'd all had enough of Boris's meddling over Heathrow:

We will see what happens the next time he comes around with the begging bowl. He might need us one day.

The Department for Business says that the Regional Growth Fund's criteria might not be the best fit for London's needs; and anyway, the capital was given £111m from the Growing Places Fund last year. Which, it turns out, hasn't been spent and the government is not best pleased. Ministers wrote to the London Enterprise Panel (LEP), the body in charge of the cash, expressing "serious concern around the pace of progress" and insisting that a growth plan be produced by next month. The response from LEP co-chairs Deputy Mayor Kit Malthouse and Harvey McGrath was equally tetchy:

We are sure you will accept that it is not a good Conservative habit to water cannon money at ill-defined targets without proper control... Serious and successful growth policy requires serious scrutiny of public funds.

Less than half of the £111m has been allocated so far, and none paid out.

London's overall unemployment level is higher than the rest of England (around 8.4% compared to 7.7%) with 362,000 out of work. If the Mayor has known for over a year that he's been having problems raising funds to help the capital then perhaps he could a) start playing nice and b) tell his team to get cracking, before the government starts to think we're so awash with cash we don't need any more.

Knitted Boris by Heather Brown, photo by M@.

Last Updated 04 March 2013