This week’s announcement that the government is putting an extra £100 million on the table to speed up the growth of Enterprise Zones has been welcomed by business groups and local authorities.
Eric Pickles MP
The cash injection is intended to fund infrastructure projects, such as road building and land clearance, in order to unlock previously idle sites that will attract investment and help local economies grow.
Enterprise Zones are at the centre of the government’s plans to support business and help the UK remain competitive on the international stage. Communities Secretary Eric Pickles is keen to highlight that the zones have already generated half a billion pounds in private sector investment and created nearly 4,000 jobs.
The benefits for businesses relocating to the zones include up to 100 per cent business rates relief for five years and incentives such as enhanced Capital Allowances and low-rent incubator units. Local authorities benefit by retaining 100 per cent of the business rates generated for a period of 25 years. These incentives to commercial development are welcome but limited.
The new cash will be allocated via a competitive fund that local enterprise partnerships must bid for. In order to access additional funding they must demonstrate (among other criteria) that there is demand from developers and occupiers. The potential to unlock further private investment is another requirement.
If this leads to increased development in the 24 zones then it will provide a further boost to the commercial property industry at a time when all the indicators point towards greater activity in the market. Consequently it has received a cautious welcome from the British Property Federation (BPF).
Chief executive Liz Peace responded to the announcement by saying; “To date the property industry hasn’t viewed Enterprise Zones as a game changer as the benefits on offer are not all that exciting.
“But if this pot of money can be used to get a few projects off the ground and get some momentum behind the new Enterprise Zones that should be welcomed.”
The deadline for bids for additional Enterprise Zone funding is Monday 18th November 2013.
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