Enterprise Zones - time for an urban renaissance?

On 23^rd March 2011, Chancellor George Osborne’s budget announced the location of 11 new Enterprise Zones in England, to be set-up in areas covered by the newly formed Local Enterprise Partnerships.

This formed part of the new Coalition Government’s commitment to rebalancing the regional economy and promoting new business and sustainable economic growth outside of the South East of England; however, the focus of the EZ framework, within which financial incentives and relaxed planning policies will promote creation of business and jobs, remains quite broad at this stage. The DCLG has set out broad guidelines for the size and broad economic aspirations of the EZs; however, it is not clear whether the zones, the exact location of which is to be decided between the relevant LEP and central government, will focus on enhancing economic growth in manufacturing and low-carbon industries around inter-city transport corridors, or whether they will focus on restabilising the role of Britain’s towns and cities in enhancing the growth of Britain’s burgeoning services sector.

On 7^th June this year, the West of England Local Enterprise Partnership announced that the Temple Quarter site, covering 70 hectares on a key urban gateway site in Bristol, had been named as a Local Enterprise Zone, setting a precedent for Urban Enterprise Zones; but will other LEPs follow suit?

Manufacturing remains at the heart of Britain’s economic growth, despite declining heavily throughout the latter 20^th century. Where Britain was once a hot-bed of coal mining, shipbuilding and steel production, it failed to adapt to changing world markets and demand for the British product declined and moved to the Far East. However, manufacturing still accounts for 26% of Britain’s GDP, despite the realisation that Britain will never reach the peak that it achieved at the turn of the 20^th century.  Many UK towns and cities, whose heart and lifeblood was once heavy industry, have struggled to adapt in the wake of post-industrial decline and suffer from population out-migration and institutionalised unemployment. Some have seen a reprieve in the form of modern growth industries, such as motor manufacturing and service-based employment, such as call centres; however, in many cases employment clusters have shifted away from traditional centres and had a huge destabilising effect on urban cores. Manufacturing remains truly vital, with Britain currently showing strength in pharmaceuticals, aerospace, motor manufacturing and defence industries; however, the role of our urban centres in the continued development and growth of this sector is limited, with most concentrated around major transport hubs on vast sites which cannot be accommodated in urban areas. Despite this, the potential for towns and cities to accommodate services ancillary to these large industrial operations cannot be underestimated.

In September 2010, Deputy Prime Minister Nick Clegg announced that the Government will explore the concept of Tax Increment Funding, a mechanism by which local authorities could borrow from the Treasury against resulting future increases in business rates from development, in an attempt to kick-start stalled comprehensive development schemes in urban areas. However, the timescale for its inception remains unclear. If Enterprise Zones were to be focussed on urban areas, it would present a real opportunity to re-establish the role of traditional centres, tap into existing transport infrastructure, swathes of brownfield land and existing population centres and combat the effects of out-migration and unemployment caused by a failure to act on post-industrial decline throughout the last third of the 20^th century. Furthermore, it would act to relieve the pressure on green belt and rebalance the regional demand for housing, taking pressure away from the South East in accommodating new homes to address the national housing deficit.

Furthermore, key to Britain’s economic success is establishing a cultural identity and enhancing the ‘wonder’ of its towns and cities, creating an environment in which people want to live, work and play, whether from home or abroad. A focus on Urban Enterprise Zones would have substantial economic benefits on ancillary retail and leisure industries and in cultivating what we have come to know as the ‘evening economy’, whereby those who live and work in a town or city will invariably spend their money nearby and enhance the overall economic activity of an area, breeding further investment and creating a pleasant urban environment and more attractive amenities. Tourism accounts for 8.6% of the UK’s economy, and key to the UK’s tourism offer is attractive and vibrant towns and cities; after all, you would struggle to find a tourist who travels to the UK to visit a pristinely landscaped business park off the A19.

It is time for an urban renaissance, which will re-establish Britain’s cultural identity and rebalance the regional economy, taking the strain away from the South East, which is bursting at its green seams. This is not to suggest that we should attempt to rekindle the industries that were once upon a time the ‘raison d’être’ for our provincial towns and cities, but reinvent and rebalance our regional economy, creating a sustainable urban environment which is conducive to economic growth and prosperity in services sector and other growth industries, cultivated by the public sector but shaped by the private sector.