Last edited 17 Oct 2016

Enterprise zones

Enterprise zones are intended to encourage growth and create new businesses and new jobs by allowing simplified planning procedures and through business rates discounts.

The government originally intended to establish 21 enterprise zones in Local Enterprise Partnerships (LEP's) areas. LEP's are business-led partnerships created to drive sustainable economic growth across local economic areas. LEP's are able to bid for enterprise zones.

Enterprise zones are geographically defined areas, usually 50 to 150 hectares, agreed between the LEP and government. Enterprise zones are created in areas of 'economic opportunity', generally on ‘clean’ sites, i.e. sites with few existing business occupants.

Enterprise zones benefit from a number of provisions:

  • A business rate discount of up to 100%, (limited by EU law to a maximum of approximately £55,000 per year) for five years. The government reimburses the local authority the cost of the discount.
  • Business rates growth for at least 25 years is retained and reinvested locally to support the LEP’s priorities.
  • Simplified planning procedures are adopted. This is generally done through the use of Local Development Orders, which can allow development without the need for planning permission. Local Development Orders can be used to permit any type of development in a particular area, or to permit a specific type of development. Conditions can be attached to the developments. The process of drafting a Local Development Order, carrying out public consultation and notifying the Secretary of State can take as little as two months.
  • The government provides support, which can include funding, to ensure that 'superfast' broadband is made available throughout the enterprise zone.
  • The government can make enhanced capital allowances for plant and machinery in areas within enterprise zones where there is a strong focus on manufacturing.

In the 2015 Budget, Chancellor George Osborne suggested that enterprise zones had created over 12,500 jobs and attracted £2bn in private investment, and announced that a number of existing enterprise zones would be expanded and new enterprise zones created in Blackpool and Plymouth. Ref gov.uk Budget 2015 documents.

In March 2016, Communities Secretary Greg Clark announced that England’s 39 Local Enterprise Partnerships would be able to apply for a share of £1.8 billion to support projects in their areas. Ref gov.uk.

However, a report by the Comptroller and Auditor General of the National Audit Office, also published in March 2016, questioned the transparency of LEP’s and recommended clarification about how they fit with other bodies to which power and spending have been devolved, and suggested that specific quantifiable objectives and performance indicators were set out for the success of Growth Deals.

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