Enterprise Zones planned for 21 areas
The formation of 21, not just a measly 10 Enterprise Zones as trailed ahead of the Budget, provided a centrepiece for George Osborne’s growth-focused speech.
“Businesses will get up to 100% discount on rates, new superfast broadband and the potential to use enhanced capital allowances in zones where there is a strong focus on manufacturing,” he told MPs.
In return for radically reduced planning restrictions local authorities will get to keep business rate growth in their zones for a period at least 25 years to spend on development priorities. [FT quotes an estimate that £100m will be set aside to fund the initiative - confirm figure???]
The first 10 Enterprise Zones were earmarked for the following areas of highest need and potential:
- Birmingham and Solihull
- Greater Manchester
- The Tees Valley
- The Bristol area
- The Black Country
- Derbyshire and Nottinghamshire; and
London mayor Boris Johnson was allowed to name a suitable candidate site in the capital city and 10 more Enterprise Zones will be announced in the summer.
HMRC’s Overview of Tax Legislation and Rates (1.37Mb PDF) added that the 100% business rate discount would be worth up to £275,000 over a five-year period and be available for any business moving into an Enterprise Zone. Enhanced capital allowances were also being considered for enterprise zones where there was a strong focus on high value manufacturing.
Much of the detail remains sketchy, but the Chancellor’s statement harked back to the heyday of Margaret Thatcher and Michael Heseltine, when similar schemes helped regenerate London’s Docklands and Manchester’s Trafford district.
But ACCA’s small business policy advisor Manos Schizas struck a sceptical note: “The fact that 10 out of the 21 zones are yet to be determined and will be put up for tender suggests the government isn't entirely sure what it would like to do with them,” he said.
“Such long-term decisions, however, should not be taken lightly, so the case for an additional 10 zones must be made first. If enterprise zones are to be a success then they have to demonstrate that they are good value for the substantial concessions given.”
Bibby UK chief executive Edward Rimmer was more welcoming. Stimulating business start-ups in the previously stagnant regions would create much-needed employment opportunities in struggling parts of northern England and the Midlands, he said.
Susan Hallam, founder and managing director of Hallam Communications in Nottingham, told Business Zone that slow internet connections had been holding her online marketing business back.
"The fact that an enterprise zone will be set up here in Nottingham is the best piece of news I've had for years," she said. "At last I'll have access to a guaranteed, super-fast broadband connection - it'll put me on the front foot, allow me to grow my business and take on more staff. Frankly if it doesn't happen, I'll have to leave the city and set relocate my business somewhere else."