THE first round of enterprise zones was announced in the budget this year, with Derby and Nottingham LEPs securing enterprise zone status. The second round was announced in August with MIRA Technology Park in Hinckley. Will the modern-day enterprise zones be different to their 1980s counterparts and what is the legacy of the original zones? Chris Sinclair offers his opinion.
There are significant differences between the incentives being made available within the current crop of Enterprise Zones and their 1980s counterparts.
Briefly, the benefits that are now available are limited savings on business rates bills for occupiers, faster broadband infrastructure and fewer planning restrictions. Whilst these incentives are welcome, they do not match the wider ranging benefits available in the zones set up between 1981 and 1996.
Among other benefits, there was a complete exemption from business rates for all industrial and commercial property and 100 per cent tax allowance for capital expenditure on constructing, extending or improving commercial or industrial buildings.
These latter two benefits were the catalyst in encouraging developers to invest in the various zones around the country, giving rise to job creating developments that are now household names such as Canary Wharf, which brought significant economic recovery to parts of the wastelands of East London docks, and Meadowhall, which was constructed on the site of derelict steel manufacturing plant.
What we have now is far a weaker set of benefits which, collectively, do not give companies the stimulus to kick start speculative development. With the exception of a few "hotspots" little, if any, speculative development is a viable proposition at the moment. The benefits now on offer, which are targeted towards the occupier and not the developer, are just not sufficient to reinvigorate the market place.