Harris Lamb Blog – 20th June
20th June, 2011.
Enterprise Zones – Where will we see the Benefits?
By Tom Morley, Associate Director
The Government announced in early 2011 that it was planning to launch a new ‘Enterprise Zone Plan; (EZP) which would be part of the 2011 Budget package to boost growth and tackle the ‘forces of stagnation’ in Britain’s economy.
Since then we have heard very little aside from arguments locally as to where these should be. We know that 21 enterprise zones are to be created during 2011 – the Budget confirmed that the first 10 Enterprise Zones would be based within ten Local Enterprise Partnerships led by Birmingham and Solihull, Sheffield, Leeds, Liverpool , Manchester, the Bristol area, the Black Country, Derby and Nottingham, Teeside and the North East. The locations of the other 10 are to be revealed later in the year.
The precise location of each zone has been left to local authorities to determine and this is now beginning to happen.
We were told that the zones will target areas of ‘high growth potential’ and there was great expectation that these would benefit SME’s in particular but the recent developments on location have to bring this into question. So far, the designation areas appear very specific and whilst undoubtedly worthy, they are unlikely to be occupied by many businesses.
In the zone:
The package announced on Budget Day contained the following measures:
• A business rate discount worth up to £275,000 per eligible business over a five year period.
• All business rates growth within the zone for a period of at least 25 years will be retained by the local area, to support the Partnership’s economic priorities and ensure that Enterprise Zone growth is reinvested locally.
• Government help to develop radically simplified planning approaches for the zone using, for example, existing local powers to grant automatic planning permission.
• Government support to ensure that superfast broadband is rolled out throughout the zone, achieved through guaranteeing the most supportive regulatory environment and, if necessary, public funding.
The benefits of the new EZP are largely focused on non tax benefits, in contrast to the schemes from the 1980’s which entitled businesses in enterprise zones to capital allowances of 100% for plant, machinery and buildings.
The EZP is a good thing – after all it is offering enhanced allowances and benefits and that has to be welcomed by businesses. The question mark is that it is unlikely to be available to many businesses and as a result its take up is likely to be lower than anticipated. This will be disappointing both to government and to the local business community. Lets hope the Midlands can capitalise on EZ status in the areas that are all finally allocated.
For advice and assistance on all aspects of Commercial Property disposals or acquisitions, Tom would be happy to help. He can be reached on 0121 455 9455 or via email: firstname.lastname@example.org.
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