Harris Lamb Blog – 20th June

 


Tom Morley

20th June, 2011.

Enterprise Zones – Where will we see the Benefits?

By Tom Morley, Associate Director

 

 

The route provides 27 miles of privately funded and operated highway from Coleshill in North Warwickshire to Cannock in South Staffordshire.  The road carried an average 47,592 vehicles on weekdays in the summer of 2010  and from my experience of the Toll Road, private cars form the vast majority of the traffic.

The M6 Toll Road was identified as an “M6 Relief Road” to alleviate congestion on the M6, which is something many people feel has not been adequately addressed and, with one way car tolls at peak periods of £5, this is something to be debated elsewhere.

From a property perspective the benefits have probably been more tangible than the traffic improvements.  The southern end of the Toll Road and the ‘T1’ junction close to J4 M6 coincided with some of the latter stage build projects at the Hams Hall National Distribution Park, a 430 acre business park which ranks as one of the best such employment parks in the UK.

Junctions T2 and T3 appear to largely function as commuter gateways for those living to the south and east of Sutton Coldfield from where national motorway access has improved considerably and the effect on house prices has been positive in these areas.

The access to Junctions T4 and T5 at Weeford and Lichfield has given a stimulus to residential and commercial property markets alike with possibly the biggest winner being the 300 acre Fradley Park, where some of the largest distribution buildings in the area have been built with more to come.  We are marketing the new Fradley Prologis Scheme with 70 acres and units to 700,000 sq ft available to be built and which will be on site shortly.

T6 Burntwood, a forgotten part of the West Midlands conurbation 10 years ago for business and for new build residential perhaps, has not quite been “transformed” but certainly “considerably improved”.

T7 & T8 and the Cannock access points to the Toll Road provided the catalyst that has helped to promote the former coal mining town into a first rate employment location.  Significant development of a cross section of employment type accommodation from offices to manufacturing and warehouse operations has bought vitality to Cannock which I think is largely due to the Toll Road passing the town’s doorstep.

For those drivers who still regularly sit stationary on the M6 between junction 8 and 10 bemoaning the state of the traffic and whether the Toll Road has done the job it promised, the tangible benefits are probably in property as much as traffic counts.  The commercial new build and viability of new schemes along the entire length of the Toll Road has been transformed since the road was built.

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: thomas.morley@harrislamb.com.       

Disclaimer: The views expressed within this article or weblog (‘blog’) are the personal views of the contributors and authors only and do not necessarily reflect the views of any named companies or thier employees.