If you’re a start-up entrepreneur based in a rundown or economically stagnant area, it can be difficult to secure funding for your business – every investor wants to plough money into more glamorous places. But help could soon be at hand, thanks to the government’s Enterprise Zones scheme.
You may well have heard of Enterprise Zones before - they were first introduced in the early 1980s by the Thatcher government in a bid to breathe commercial life into deprived tracts of the country. They generally cost a lot of money, and delivered relatively poor returns, but there was one startling success; the modern-day commercial hub of Canary Wharf, one of the world’s biggest economic success stories, was born under the original Enterprise Zones.
Now, the coalition is bringing the Enterprise Zones back. It will create a total of 21 zones, each spanning between 50 and 150 acres of derelict urban land. The government hopes each zone will become a hive of commercial activity, so there are clear advantages for firms thinking of moving their business into one of the designated sites.
And there are plenty of financial incentives to do so. If you move your business into an Enterprise Zone, you could receive a 100% discount on business rates, worth up to £275,000 over a five-year period, as well as superfast broadband. A number of additional benefits have been touted, and it is likely that each zone will have its own unique set of perks.
Where are the zones located?
Eleven of the 21 zones have already been identified. They are in Liverpool, Leeds, Sheffield, Greater Manchester, the West of England, Tees Valley, North East, the Black Country, Derbyshire and Nottinghamshire, and London.
At the moment, plans for each of these 11 sites are still at an embryonic stage. Certain details have already been announced (for example, we know for sure that the Manchester zone will be based around the city’s airport, and the London zone will be situated in the historic Royal Docks), but the precise location, and size, of each zone has yet to be finalised. None of the 11 zones has a website as yet, and it may be some time before clearer information emerges.
The location of the remaining 10 zones has yet to be finalised; it is thought the government will invite Local Economic Partnerships to put proposals forward, in the hope of clinching zone status. Many believe the government will prioritise sites in the North and Midlands, to create more dynamic growth outside London. However, nothing has been formally announced as yet.
Who will manage the zones?
The identity of the day-to-day management team remains unclear at this stage, although it appears the overall management of the programme will be shared between three different government departments – the Treasury, the Department for Business, Innovation and Skills (BIS) and the Department for Communities and Local Government (CLG) – in tandem with the relevant Local Economic Partnership (LEP).
The management team will have extensive powers over the complexion of each zone. For example, it will have power to decide what sort of businesses will be encouraged in the zone, and what kind of reliefs and incentives will be offered.
How can I find out more?
At present, the best thing to do is sit tight and wait for more information from Startups. The government has not created a clear portal for the Enterprise Zone programme, and as discussed above, none of the individual zones, or potential sites, has its own web presence.
Chancellor George Osborne was brief and vague in his announcement on Enterprise Zones in the 2011 Budget, and it seems information will be drip-fed rather than condensed into a single, catch-all announcement.
There’s no doubt that companies which move into an Enterprise Zone will receive benefits, but, given precious little is known about them at the moment, it’s wise to hold off planning your move until we can reveal more.