Ministers have announced 13 more enterprise zones hard on the heels of the four zones announced in July for Birmingham, Leeds, Bristol and Sheffield. These additional zones are:
- Daresbury Science Campus in Warrington
- Newquay AeroHub in Cornwall
- The Solent Enterprise Zone at Daedalus Airfield in Gosport
- Rotherwas Enterprise Zone in Hereford
- Discovery Park in Sandwich, Kent
- Enterprise West Essex in Harlow
- Science Vale UK in Oxfordshire
- Alconbury Airfield in Cambridgeshire
- Great Yarmouth in Norfolk
- Lowestoft in Suffolk
- Northampton Waterside
- MIRA Technology Park in Hinckley, Leicestershire
- Humber Estuary Renewable Energy Super Cluster
Now comes the really hard work. Local planning authorities for these areas will be expected to streamline the development control process for the zones using Local Development Orders (LDOs). LDOs grant planning permission according to their terms. The precise boundaries of each of these areas will need to be resolved, environmental assessments carried out and consultations undertaken before an LDO may be adopted. There is a risk this process could take as much time as a major planning application, before permission can be granted.
What is certain is that landowners within the zones and developers have a major part to play. Planning permission is just part of achieving development for employment-generating businesses. Local planning authorities can be expected to look to landowners and developers for a contribution to the costs of the process and to seek agreement about the release of land. Planning obligations will be an issue particularly in areas where the community infrastructure levy has still to come into force. In many cases local authorities own significant land within the zones and we expect competitions for development opportunities with the European Union procurement rules in the background.
Tax incremental funding schemes, where borrowings for the infrastructure needs identified through the LDOs are financed through growth in business rates, are a possibility.
Government is separately consulting on legislation to allow local authorities generally to retain the business rates collected from within their areas but starting from a baseline set in 2013-14 for each local authority. This will be decided within the overall envelope of the expenditure control totals set out in the 2010 Spending Review. Some authorities will therefore lose rates (tariffs), while others will gain (top-ups) to establish a fair starting position. Disproportionate gains in future years caused by high business rate tax bases will be recouped through a levy.
Tariffs and top-ups will be reviewed from time-to-time, such as following a revaluation. Increases in business rates in enterprise zones will be ignored for the purposes of the levy and any re-assessment of top-ups and tariffs. This provides a more secure base for tax incremental funding, although Government may well seek to control the use of such schemes.
Local authorities will also be able to use powers in the Localism Bill once enacted to provide up to 100% rate relief for all business within the zone with the Government reimbursing the cost. Discounts are limited by European Union state aid law to the equivalent of €200,000 over a three year period, equal to about £55,000 each year.
Let us hope that the devil can be exorcised from the detail to ensure it all happens.