Zone incentives won't move multinationals - Barrow
Large multinational companies will not be encouraged to move to Birmingham through the enterprise zone incentives, an Insider round table has heard. Mark Barrow from Birmingham City Council said businesses "won't move across the country - or even Birmingham - for a £55,000 inducement that'll last five years".
He added that the Birmingham city centre zone could raise £900m in 25 years.
Speaking to an audience at Birmingham Science Park Aston, the council's strategic director of development said the council's thought behind the Birmingham city centre enterprise zone - green lighted by government in August - was to use the site not just for the benefit of businesses but to drive "the social, softer issues that create an environment for growth".
He added that start-ups would be most likely to up sticks and move into the area, which will offer tax breaks, relaxed planning regulations and super-fast broadband.
"We think that over 25 years we can raise £900m from the zone and that will lever in another £7bn from the private sector," said Barrow. "Add those together and you get a compelling credible story to tell the world, which gives confidence, and confidence is the scarcest thing around at the moment."
He admitted the council was "quite ruthless" in how to maximise the zone's potential.
"We looked at how we could maximise the business uplift, how we could capture it, how to borrow against it, and turn it into an investment across the whole of the city’s economy," he said.
"The aspirational planning is important, which is why Birmingham's enterprise zone is twice the size it could be, to give that sense of purpose and confidence. It's not often understood that although councils collect business rates they go to government, and getting money out of Treasury is an issue."
Barrow added that although there was a resounding sense of unanimity among the LEP board for the city's enterprise zone proposal, the organisation "wasn't given the time" to engage in prolonged public consultations.
"We had four weeks and you’ll have to trust us that we've done what we can for the best. We didn't have time for pet schemes: we needed to get something over the finish line quickly that was imaginative and maximise the shovel-ready opportunities that were available," he said.
