We will learn from the 80s enterprise zones, says Pickles
By David Casey
Communities secretary Eric Pickles has vowed to ensure that the three enterprise zones in the Midlands will boost economic growth and stimulate private sector employment.
Speaking to Insider he said the zones - earmarked for areas in Birmingham and Solihull, the Black Country and Derbyshire and Nottinghamshire - would not simply be a rehash of Conservative policy from the 1980s.
"It's right to say that the enterprise zones set up in the 1980s had mixed results," he said. "But while the name is the same now, what they're going to be doing will be different. We are looking at smaller areas and they will be more targeted."
Chancellor George Osborne yesterday unveiled plans for 21 new enterprise zones to be set up across England. The first ten zones will be based in Liverpool, Greater Manchester, West of England, Leeds, Sheffield and London, in addition to the three in the Midlands.
Benefits will include a 100 per cent business rate discount for new businesses; local authorities will receive all business rates growth within the zone for a period of at least 25 years; there will be "radically" simplified planning approaches; and the government will support the roll out of superfast broadband.
Pickles said the government is also looking at other benefits including the use of Tax Incremental Finance and enhanced capital allowances. He added: "There are all kinds of advantages and I am confident they will deliver on their aims and act as a catalyst for growth in the areas."
The exact locations of the Midlands enterprise zones will be revealed by Prime Minister David Cameron in a speech later today. Pickles said a bidding process for the remaining 11 enterprise zones would now begin. Local enterprise partnerships (LEPs) are tasked with leading the process.
"The Budget announcement of the first wave will be followed with another 11 this year," he said.
"The zones that are to be set up are mainly in the North, but there are pockets of deprivation in the South as well. Each area has its own problems. We're for LEPs to come forward with bids and we hope to be able to make an announcement on further zones by the end of July. LEPs will recommend where they should go and we will listen."
Critics of past enterprise zones - a flagship policy during the 1980s - have claimed they are expensive for the number of jobs created and encouraged "boundary jumping".
Think tank Centre for Cities said: "The government has clearly learned some of the lessons of the 80s, but questions remain about whether the emphasis on business rate discounts and capital allowances – updated versions of the main incentives offered thirty years ago – will be enough to create additional jobs at the levels desired."
However, it welcomed the fact that zones will be administered by LEPS - a move "which will finally give these partnerships some teeth". But the organisation added: "The fly in the ointment here could be competition between LEPs, with businesses simply jumping from one city region to another to benefit from the incentives on offer."
