Enterprise Zones: Hull’s successful bid banner


Enterprise Zones: Hull’s successful bid

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The first Enterprise Zones were created by theConservative Government in 1981 and this year the CoalitionGovernment announced that it would establish 21 new EnterpriseZones in England as part of its Plan for Growth. The aim of the newEnterprise Zones is to support economic development by creating theconditions for "strong, sustainable and balanced growth". TheGovernment wants to attract new businesses to run-down areas andcreate new jobs which will in turn have positive effects on thewider local economy.

On 17 August 2011 the Government announced that the bidsubmitted by the Humber Local Enterprise Partnership ("LEP") forEnterprise Zone status was successful. The key purpose of Hull`sbid was to attract leading manufacturing companies in the renewableenergy sector to further its aim to be a national and internationalhub for renewable energy.

The Humber Enterprise Zone is the largest Enterprise Zone todate covering an area of 375 hectares and spread over threedistinct sites in the Humber region:

1. Green Port Hull (Alexandra Dock)
2. Queen Elizabeth Dock, Hull
3. Able Marine Energy Park (southern part), NorthLincolnshire

How will businesses benefit?

There are four types of benefit applicable to all EnterpriseZones:

1. Tax breaks

A 100% business rate discount will be available forbusinesses that move into an Enterprise Zone during the currentParliament i.e. by April 2015. It is thought that the discounts maybe worth up to £275,000 over a five year period.

The Government will reimburse local authorities for the costof the discount they provide to businesses. As well as reducing thetax burden on businesses, it is hoped that the discounts willincrease cash-flow for local authorities enabling them to free upsome of their resources for further investment.

2. Retention of business rates growth

All business rates growth generated within an EnterpriseZone can be retained by the local authorities within the LEP areafor a period of at least 25 years. Where there is more than onelocal authority, the money will be shared between them. The aim isfor the funds to be reinvested in the local area in line witheconomic priorities of the LEP.

The Humber LEP Board has indicated that it would use thefunds to invest in skills and infrastructure so as to spread thebenefits of the Enterprise Zone throughout the Humber and stimulateeconomic growth in the region.

3. Simplified planning control

The Government and local authorities will work together tosimplify the planning regime as it has often been argued that thedelay, cost and uncertainty of the planning process has proved tobe a disincentive to business.

It is thought that Local Development Orders ("LDOs") will bethe most likely mechanism used by local authorities to reduceplanning control within the Enterprise Zones. LDOs allowdevelopment to go ahead without the need for planning permission tobe obtained. LDOs can permit any development within a designatedarea or they can apply to a specific type of development, and theymay grant planning permission outright or specify certainconditions to be complied with.

4. Superfast broadband

The Government will provide support to ensure superfastbroadband is rolled out within the Enterprise Zones. This will beachieved through guaranteeing the most supportive environment and,if necessary, public funding. The Government plans to invest overhalf a billion pounds over the next four years to help create thissuperfast broadband network.

The package of financial incentives actually available onthe granting of the Enterprise Zone status will depend on what theLEP decides will promote the best economic growth in itsarea.

There may also be other types of incentives available tothose within the Enterprise Zones following discussions between theGovernment and the LEP. For example, enhanced first year capitalallowances on plant and machinery will be available in designatedareas within a limited number of Enterprise Zones where there is astrong emphasis on manufacturing.

The wider impact

Despite the financial incentives only being applicablewithin the Enterprise Zones, it is hoped that the surrounding areaswill benefit from their proximity to the Enterprise Zones. Forexample, as the Humber LEP originally considered putting in a bidfor an 800 hectare Enterprise Zone, the remaining sites not putforward will be targeted at the supply chains which want to locatenear to the manufacturers that move into the EnterpriseZone.

Also it is hoped that the Humber Enterprise Zone will have asignificant impact on employment in the region as the Humber LEPhave estimated that it will help create over 4,500 jobs by2015.

The granting of Enterprise Zone status can only be apositive step towards promoting the Humber region, allowing it tocapitalise on its unique location and existing infrastructure byencouraging investment from the renewables sector.

This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.

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This article is for general guidance only. It provides useful information in a concise form. Action should not be taken without obtaining specific legal advice.
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