What are Enterprise Zones?
Enterprise Zones, or EZs, are being introduced by the government in a £300m scheme announced by the chancellor in his 2011 Budget speech. The government hopes the EZs will create hothouses for growth and innovation, in areas which have become economically stagnant or deprived.
The precise size of each EZ has yet to be established. However, early indications suggest each zone will span between 50 and 150 hectares, and will be situated on land which has become fallow or derelict. If all goes to plan, each site will become a hive of new and emerging businesses.
Haven’t the EZs been around for a while?
Not in their present form, no. The first wave of EZs were introduced in the early 1980s by the Thatcher government, as a way of boosting areas which were particularly deprived. However they cost a lot of money, and ministers eventually decide to phase them out because the job creation rate couldn’t justify the expense.
The major success of the first EZ programme was Canary Wharf, which was granted EZ status in 1982 and was transformed from a rundown industrial morass into a modern commercial powerhouse.
How many EZs will be created, and where will they be located?
There will be 21 EZs in total, but only 11 have been announced in the first wave of the plan. These will be located in Liverpool, Leeds, Sheffield, Great Manchester, the West of England, Tees Valley, North East, the Black Country, Derbyshire and Nottinghamshire, and London.
The government is inviting Britain’s Local Economic Partnerships – new bodies which combine representatives of Local Authorities and business leaders, and have assumed the role of the Regional Economic Partnerships – to pitch for the remaining 10 EZs.
Who will manage the EZs?
The identity of the EZs’ day-to-day management team remains unclear at this stage; it appears the overall management of the programme will be shared between three different government departments – the Treasury, the Department for Business, Innovation and Skills (BIS) and the Department for Communities and Local Government (CLG) – in tandem with the relevant Local Economic Partnership (LEP).
The only exception to this arrangement is London, where the EZ will be planned and managed by the city’s mayor Boris Johnson. It is thought he will choose a site in Newham, overlooking the Royal Docks.
The management team will decide the precise location of the EZ; the sort of businesses will be encouraged to come there; and what specific reliefs and incentives will be offered to businesses thinking of coming.
What sort of incentives are on offer?
As mentioned, the specific incentives will vary from zone to zone. The government is making a range of policy tools available for each zone to choose from.
These include:
- A 100% discount on business rates, worth up to £275,000 over a five-year period, for any business that moves into the EZ before the next election
- Radically simplified rules and regulations regarding planning
- Superfast broadband for each company in the zone.