By Marcus Leach

Former Conservative party deputy prime minister, Lord Heseltine, has challenged the government to take bolder action to stimulate the economy.

In a report, commissioned by Downing Street, Heseltine says that the perception is people think the UK "does not have a strategy for growth and wealth creation".

No Stone Unturned: In pursuit of growth is a damning indictment of the government, according to Labour.

Heseltine wants the funds used to support industry to be distributed locally, rather than through central government.

His review makes 89 recommendations to help industry. One of its key aims is to move £49bn from central government to the regions to help local leaders and businesses.

The main points of the report, called No Stone Unturned: In pursuit of growth, include:

- a major devolution of funding
- making a smaller and more skilled government machine
- enhancing the standing of Local Economic Partnerships (LEPs) to bring together private and public sectors
- more government leadership for major infrastructure projects
- a role for employers in education

Simon Walker, Director General of the Institute of Directors, said the report was welcomed in a bid to support regional growth.

“We welcome the idea of encouraging more devolution to the local level, and ensuring business has the opportunity to make heard its priorities on local issues," he said.

"IoD representatives and members are active in a large number of Local Enterprise Partnerships around the country, and they are keen to continue giving their time and advice on how to get the system working to support growth in the regions. Business leaders and the various business organisations have long experience of co-operating to encourage a positive business environment in the UK, and we are committed to continuing that work.

“Lord Heseltine’s proposals on foreign investment into the UK are more worrying. The idea that we should be suspicious of people from around the world putting the money into our country is misguided. We should be looking at ways to encourage and invite investors to back British enterprise and infrastructure projects, not reverting to government-run public interest tests which make it more difficult for them to do so.”

Chancellor George Osborne has said he will study the report very carefully as it provides food for thought.

"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," he said.

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