BUSINESS leaders in the North East last night gave a cautious welcome to calls from Lord Heseltine to devolve power to regions to enable them to “unleash the power” of cities such as Newcastle.

The former Conservative deputy prime minister said too much power had been accumulated in London as he called for public money to “mobilise the potential” of England’s provincial cities.

Formally launching his 228-page report, Lord Heseltine urged the coalition to produce a long-term strategy for economic growth.

He said it should included firm commitments against which the Government can be held to account.

Up to £250,000 of new public funding should be given to local enterprise partnerships (LEPs) over the next few years, the peer added. Paul Woolston, chair of the North East LEP, who attended the launch of the report in Birmingham, welcomed its findings.

“Bringing the levers of growth closer to those who understand the differences in local labour markets and local economies must make sense, and lead to better value for money,” he said.

“Lord Heseltine’s report identifies the broad areas where the public sector should be getting involved.

“More importantly, he also provides some very specific recommendations for further decentralisation of responsibility and power to ensure each economic area makes the most of its potential to grow.”

Coun Iain Malcolm, leader of South Tyneside Council and North East LEP board member, said Lord Heseltine was “providing an opportunity for Government to reconsider some of the nationalisation of policy”.

“For the future of the North East and the UK more widely, I hope they take up the challenge he has set,” he said.