News Budget Special Local Enterprise Partnerships
LEPs could struggle to agree sites for Osborne's enterprise zones
BY LUCY PHILLIPS
Local Enterprise Partnerships are to be tested to the limit as hard-pressed councils strive to be part of the 21 new ‘enterprise zones’ announced in the Budget.
In a Budget focused on boosting growth, Chancellor George Osborne named 11 LEPs – alliances between local businesses and councils that are replacing regional development agencies – that would benefi t from enterprise zone incentives. The exact locations of four vanguard areas – Nottingham Boots Campus, Liverpool Waters, Manchester Airport and London’s Royal Docks – were announced the following day. The remaining seven LEPs (Birmingham & Solihull; Leeds City Region; Sheffi eld City Region; West of England; Tees Valley; North Eastern; and the Black Country) will now have to decide where to locate their enterprise zone, while a bidding process will be opened up to determine which other ten LEPs will site zones. The results of the latter will be revealed in the autumn. In his Budget statement, Osborne said: ‘Helping all parts of our country succeed is also the purpose behind the new enterprise zones we launch today. In return for radically reduced planning restrictions, we will let local authorities keep all business rate growth in their zone for a period of at least 25 years to spend on development priorities.’ Super-fast broadband will be rolled out in the zones. Businesses that move into the areas within this Parliament will also benefi t from a 100% rates discount for the fi rst fi ve years.
But the enterprise zones, a throw-back
to a fl agship 1980s Conservative government policy, came under fi re, not least for their ‘divisive’ impact on relations between LEP members.
6 PublicFinance APRIL 2011 Back to the future: Osborne's enterprise zones are a throw-back to one of Margaret T atcher's fl agship polices in the 1980s
UCCEED IS ALSO THE PURPOSE NEBEHIND THE
‘HELPING ALL PARTS OF OUR S COUNTRY
W ENTERPRISE ZONES’
GEORGE OSBORNE Chancellor
Andrew Sisson, a researcher into enterprise zones for the Work Foundation, told Public Finance: ‘The place that gets the enterprise zone will be more prosperous... If you are a council within an LEP, every council will want it within their boundaries. You will see some pretty frantic negotiations within LEPs. There is the potential for it to cause division if not managed carefully.’ But Sisson also warned that it would take years for enterprise zone gains to kick in and for councils to make any ‘major returns’, which would be short- lived anyway. Research from the previous generation of enterprise zones showed they stimulated short-term investment, which lasted no more than
Photo: PA
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