Enterprise zones have enabled councils to channel hundreds of millions of pounds into crucial infrastructure projects by allowing them to take advantage of top-class investment incentives that are driving forward the economy, Local Growth Minister Penny Mordaunt announced today (16 December 2014).
More than £410 million will be spent by local partners on major projects across the country, unlocking development and paving the way for tens of thousands of new jobs as well as providing a significant boost to the UK’s construction sector.
This significant investment has been possible since the government gave councils powers to retain all business rates growth from their local enterprise zone and use the revenue generated to secure borrowing for infrastructure projects.
Local Growth Minister Penny Mordaunt said:
This just shows what can be achieved when you marry ground-breaking ambition with smart incentives. This investment will deliver world-class infrastructure that ensures enterprise zones continue to attract brilliant companies, creating jobs and delivering real benefits to hard-working people.
It’s proof our long-term economic plan is on track and I know for a fact this is just the beginning. Other enterprise zones are taking note and I’m expecting to see even greater investment in the future, which is great news for the economy.
The city council with support of the local enterprise partnership has secured up to £275 million for projects across the Birmingham Enterprise Zone, including £88 million for the redevelopment of Paradise Circus in the heart of the city.
The £500 million development, is due to commence construction early next year, is being touted as the UK’s next financial centre and will deliver more than 1.9 million square foot of floor space, generating £319 million of additional business rates and creating 10,000 jobs.
The council will also spend £50 million on supporting the new high-speed railway HS2, including carrying out infrastructure work to link the new terminus at Birmingham’s Curzon Street to the city centre.
This investment will also support the council’s Curzon masterplan built around HS2 to become a reality. This aims to deliver 14,000 jobs, more than 6.4 million square foot of new business space, 2,000 new homes and deliver a £1.3 billion boost to the local economy.
The Black Country Enterprise Zone the partnership of local councils – City of Wolverhampton council, Staffordshire county council and South Staffordshire council – have invested £40 million into the i54 site, to be reclaimed by the retention of business rate growth.
Over £600 million has been invested into the i54 site and around 1,600 jobs have been created with the potential to create over 2,000. i54 is home to Jaguar Land Rover, aerospace giant Moog and printing company ISP, amongst other companies.
Around £53 million of government funding is going to the city council for the development of the 12,000 capacity Bristol Arena at Bristol Temple Quarter Enterprise Zone.
The money, which is committed by the West of England Local Enterprise Partnership, will be repaid through the retention of business rates. The £90 million arena is due to open in 2017 and is expected to create 900 jobs.
The city council has secured £2.5 million to help build a new road off the A63 East Leeds Link Road to provide access for companies moving to the Logic Leeds site at Leeds City Region Enterprise Zone.
The 110-acre manufacturing and distribution park has planning permission for nearly 1.6 million square foot of employment space with construction already underway on the first 80,000 square foot industrial unit. The site is expected to create nearly 3,000 jobs.
The borough council has secured more than £5 million to be spent on Northampton Enterprise Zone, including investing in a new factory for automotive giants Cosworth.
The facility will build complex machined components for high-performance vehicles and will commence production early next year, creating 70 skilled jobs.
The investment will also be used to improve the road junction at St Peter’s Way – a key access route for the new Northampton railway station that will act as a gateway to the enterprise zone when it opens early next year, creating 30 jobs.
The county council securing more than £10 million to pay for public infrastructure works which will unlock the Samlesbury site of the Lancashire Enterprise Zone.
The new A59 access and site road, which will also establish a new link with the A677, will allow the first phase of a £50 million private development to get underway. It is part of a comprehensive masterplan to create 3,000 jobs at the site.
The North East Local Enterprise Partnership is providing nearly £20 million to local councils and private-sector partners for infrastructure improvements and other works at the North East Enterprise Zone.
The money comes from the government-backed North East Investment Fund and will be returned to the local enterprise partnership through business rates.
The borough council has secured £8.1 million to build more than 110,000 square foot of office and industrial space at Beacon Park on the Great Yarmouth and Lowestoft Enterprise Zone.
The loan will be financed through the sale of the units, but has been underwritten by the money the local enterprise partnership will receive from business rates.
The government launched its enterprise zone programme in April 2012 as part of its long-term economic plan to rebalance the economy.
Led by local enterprise partnerships and councils, the 24 zones are going from strength to strength with recent numbers showing they have created 12,530 jobs, attracted 434 new businesses and generated over £2 billion worth of private investment.
The zones offer a range of business incentives to help companies grow, including super-fast broadband, simplified planning and top-class tax incentives.
Authorities are funding many of the infrastructure improvements through the Tax Increment Financing mechanism. This allows them to borrow against the expected increase in business rates that will flow from enterprise zones as a result of the infrastructure improvements.
Andy Street, chairman of the Greater Birmingham and Solihull Local Enterprise Partnership said:
Many of the benefits of having an enterprise zone are well known – business rate relief to businesses, simplified planning and superfast broadband – however, for Greater Birmingham and Solihull Local Enterprise Partnership, the biggest prize has been the ability to retain business rates generated within the enterprise zone for 25 years.
It was this fact that drove our decision to locate our enterprise zone in the city centre, so that we could retain the greatest amount of business rates and borrow against future uplift.
Our exploitation of this financial model is unique in the country. We have developed a £275 million investment plan that has already kick-started development within the enterprise zone and will help to transform the city centre.
The impact will not stop there however, with £50 million of funding allocated to support the development of our 2 HS2 stations, Curzon and Interchange, and £20 million to local enterprise partnership-wide projects. This is an exciting time for Greater Birmingham, and business rate income generated in the enterprise zone is helping to fuel this renaissance.
Furthermore, companies moving to enterprise zones will benefit from improved access to their markets and clients thanks to a £15 billion overhaul of our roads.
The government recently announced its Road Investment Strategy, which will boost capacity and tackle congestion across vast parts of England’s motorways and major A-roads, including a number of key routes servicing the business parks. The improvements are:
- Black Country - up to £50 million spent on boosting capacity at junction 10 of the M6 near Darlaston
- Great Yarmouth and Lowestoft - dualling around Norwich, improvements on the A47 Acle Straight and other junction improvements including the reconstruction of the Vauxhall roundabout
- Harlow - a £50 million package of improvements to junction 7 of the M11
- Leeds - up to £25 million spent on increasing capacity at junction 45 of the M1
- MIRA Technology Park - improvements to the A5 near Hinckley
- North East - up to £50 million spent on a new junction between the A19 and A1290 north of Sunderland.
With 90% of journeys taking place on our roads, the Road Investment Strategy is vital for the country’s economic revival and will triple the levels of money spent on our national roads by the end of the decade.
More than 1,300 new lane miles will be delivered over the next parliament on motorways and trunk roads, tackling congestion and fixing some of the most notorious and longstanding problem areas on the network.