Enterprise Zone

This area has been chosen by Government to be among the first to develop an Enterprise Zone focused on boosting economic growth. As well as being able to retain business rates, Enterprise Zones will be encouraged to develop Tax Incremental Financing Schemes for councils to borrow against future business rate revenues starting 2013.

We are preparing a business case for Government to establish our Enterprise Zone in Birmingham city centre, along with submitting a proposal for a second phase which would see the creation of an Enterprise Belt covering a significant part of the rest of the area.

Birmingham city centre has been selected for its potential to generate significant private investment and jobs as well as substantial business rate growth. It could deliver 50,000 jobs; an economic value of £2.1 billion per year and has the potential to generate growth in business rates of £70m a year over 25 years to be invested across the area when all the planned developments are created.

The Enterprise Belt would cover key areas of southern Staffordshire and northern Worcestershire, as well as the M42 growth corridor in Solihull.

We believe the proposals for the Zone and Belt fit perfectly with our wider economic strategy, allowing us to exploit the distinctive economic strengths of each area.

The Zone

  • Defined by the 5 ‘transformational areas’ in the ‘Big City’ city centre masterplan, together with Birmingham Aston Science Park
  • Covers about 130 hectares
  • Opportunity for 1.5m. sq metres of floorspace
  • Deliver 50,000 jobs
  • Potential for £70m business rate growth p.a.
  • Revenues available for investment across the area.

The Belt

  • Areas of growth potential in Solihull, Cannock, Lichfield, Tamworth, Burton, Redditch, Bromsgrove and Kidderminster
  • Belt provides complementary opportunities to Zone
  • Deliver up to 100,000 jobs
  • Potential for up to £70m business rate growth p.a.
  • Revenues available for investment across the area.

Key Features of EnterpriseZones

1. Financial/Planning Incentives for Business

  • 100% business rate discount worth up to £275,000 over a five year period for businesses moving into an EZ
  • Government and local authorities to develop radically simplified planning approaches in the EZ
  • Possibility of enhanced capital allowances for plant and machinery where there is a strong focus on manufacturing.

2. Financial/Planning Incentives for Business

  • Government support to ensure that superfast broadband is rolled out throughout the EZ, with the possibility this might include Government funding.

3. Financial/Planning Incentives for Business

  • All business rates growth within the Zone retained for a period of at least 25 years by the local authorities to enable us to deliver on our economic priorities
  • Ability to use Tax Increment Finance to fund major infrastructure investment
  • Potential for UKTI support for inward investment or trade opportunities in the Zone.

4. Informed by Lessons from the 1980s EZs

  • EZs did regenerate some areas of dereliction but the extent of derelict land today is much smaller, whilst capital expenditure to improve derelict land is not affordable today
  • Enterprise Zones did not deliver a large number of additional new jobs – most were existing jobs displaced from other areas
  • Enterprise Zones were expensive due to upfront costs on land and infrastructure and forgone tax revenues
  • Enterprise Zones pushed demand around the economy by incentivising firms to move to lagging areas.
  • Many of the benefits were captured by property owners rather than by local economies.

5. Informed by Lessons from the 1980s EZs

  • Focus for the new Zones is on the major cities and city regions as drivers of growth
  • Areas of genuine economic opportunity are central to the EZ policy
  • Aim is to minimise business and job displacement
  • ‘Clean land’ with limited regeneration costs is being targeted
  • Capital allowances on land and buildings is not included, but concentrating financial incentives (business rates relief) on the businesses occupying land and buildings.