Enterprise Zones: Hull’s successful bid
The first Enterprise Zones were created by the
Conservative Government in 1981 and this year the Coalition
Government announced that it would establish 21 new Enterprise
Zones in England as part of its Plan for Growth. The aim of the new
Enterprise Zones is to support economic development by creating the
conditions for "strong, sustainable and balanced growth". The
Government wants to attract new businesses to run-down areas and
create new jobs which will in turn have positive effects on the
wider local economy.
On 17 August 2011 the Government announced that the bid
submitted by the Humber Local Enterprise Partnership ("LEP") for
Enterprise Zone status was successful. The key purpose of Hull`s
bid was to attract leading manufacturing companies in the renewable
energy sector to further its aim to be a national and international
hub for renewable energy.
The Humber Enterprise Zone is the largest Enterprise Zone to
date covering an area of 375 hectares and spread over three
distinct sites in the Humber region:
1. Green Port Hull (Alexandra Dock)
2. Queen Elizabeth Dock, Hull
3. Able Marine Energy Park (southern part), North
How will businesses benefit?
There are four types of benefit applicable to all Enterprise
1. Tax breaks
A 100% business rate discount will be available for
businesses that move into an Enterprise Zone during the current
Parliament i.e. by April 2015. It is thought that the discounts may
be worth up to £275,000 over a five year period.
The Government will reimburse local authorities for the cost
of the discount they provide to businesses. As well as reducing the
tax burden on businesses, it is hoped that the discounts will
increase cash-flow for local authorities enabling them to free up
some of their resources for further investment.
2. Retention of business rates growth
All business rates growth generated within an Enterprise
Zone can be retained by the local authorities within the LEP area
for a period of at least 25 years. Where there is more than one
local authority, the money will be shared between them. The aim is
for the funds to be reinvested in the local area in line with
economic priorities of the LEP.
The Humber LEP Board has indicated that it would use the
funds to invest in skills and infrastructure so as to spread the
benefits of the Enterprise Zone throughout the Humber and stimulate
economic growth in the region.
3. Simplified planning control
The Government and local authorities will work together to
simplify the planning regime as it has often been argued that the
delay, cost and uncertainty of the planning process has proved to
be a disincentive to business.
It is thought that Local Development Orders ("LDOs") will be
the most likely mechanism used by local authorities to reduce
planning control within the Enterprise Zones. LDOs allow
development to go ahead without the need for planning permission to
be obtained. LDOs can permit any development within a designated
area or they can apply to a specific type of development, and they
may grant planning permission outright or specify certain
conditions to be complied with.
4. Superfast broadband
The Government will provide support to ensure superfast
broadband is rolled out within the Enterprise Zones. This will be
achieved through guaranteeing the most supportive environment and,
if necessary, public funding. The Government plans to invest over
half a billion pounds over the next four years to help create this
superfast broadband network.
The package of financial incentives actually available on
the granting of the Enterprise Zone status will depend on what the
LEP decides will promote the best economic growth in its
There may also be other types of incentives available to
those within the Enterprise Zones following discussions between the
Government and the LEP. For example, enhanced first year capital
allowances on plant and machinery will be available in designated
areas within a limited number of Enterprise Zones where there is a
strong emphasis on manufacturing.
The wider impact
Despite the financial incentives only being applicable
within the Enterprise Zones, it is hoped that the surrounding areas
will benefit from their proximity to the Enterprise Zones. For
example, as the Humber LEP originally considered putting in a bid
for an 800 hectare Enterprise Zone, the remaining sites not put
forward will be targeted at the supply chains which want to locate
near to the manufacturers that move into the Enterprise
Also it is hoped that the Humber Enterprise Zone will have a
significant impact on employment in the region as the Humber LEP
have estimated that it will help create over 4,500 jobs by
The granting of Enterprise Zone status can only be a
positive step towards promoting the Humber region, allowing it to
capitalise on its unique location and existing infrastructure by
encouraging investment from the renewables sector.
Posted on: 01/09/2011
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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