Birmingham city centre has been chosen as the site for a new “enterprise zone” where employers will enjoy tax breaks and reduced planning restrictions.
Business and civic leaders have drawn up a business case to be presented to the Government, after George Osborne, the Chancellor, announced plans for an enterprise zone in Birmingham in last month’s budget.
Mr Osborne invited Greater Birmingham and Solihull Local Enterprise Partnership (LEP), the new body bringing together council leaders, chambers of commerce and other business organisations, to specify exactly where the zone should be.
The LEP Board has now agreed to put forward Birmingham city centre as the location of the Enterprise Zone due to its potential to generate considerable private investment and jobs, as well as the potential for substantial business rate growth.
Under the Government’s plans, local authorities will be allowed to keep the extra business taxes to spend on measures promoting enterprise across the LEP.
And new employers in the enterprise zone will be exempt from paying business rates for five years, saving them up to £275,000 each.
Enterprise Zones will also be encouraged to develop Tax Increment Financing Schemes, which allow councils to borrow against future business rates revenues. These will be implemented from 2013.
The board also agreed that the submission should include a business case for a second phase, which would see the creation of an Enterprise Belt covering a significant part of the rest of the LEP.
This would cover key areas of southern Staffordshire and northern Worcestershire as well as M42 growth corridor in Solihull.
Bridget Blow, the LEP’s Chair, said; “The Enterprise Zone and Belt proposal forms part of our wider economic strategy to exploit the distinctive economic strengths of each area of our LEP.
“Combined with plans to create world class connectivity to national, European and global markets through the New Street station redevelopment, airport runway extension, High Speed Two and accelerated roll-out of superfast broadband, as well as a local transport package that will connect the towns of southern Staffordshire and northern Worcestershire to key transport hubs in Birmingham and Solihull, we hope that our submission makes a compelling business case for government to grant our proposals for creating both an Enterprise Zone and an Enterprise Belt.”
Mike Whitby, leader of Birmingham City Council, said; “At the heart of our LEP was a challenging ambition to create jobs and drive forward investment and prosperity in to this region.
“The LEPs first enterprise zone, located in the city centre, represents a powerful statement that we are starting to deliver the components that will make our LEP objectives a reality.
“By selecting the city centre for the Enterprise Zone, the LEP has opened up the potential to deliver 50,000 jobs and an economic value of £2.1 billion per year.
“If all the proposed development is delivered, it could generate growth in business rates of £70 million a year over 25 years for investment across the LEP.
“This is just the first Enterprise Zone and there remains so much potential in the Birmingham Solihull LEP area that we are also proposing an Enterprise Zone belt to lever out the world class skills we have in this region.”