28 April 2011 | By Steven Byrne
MAN IN THE MIDLANDS
I’m amazed the response has been so muted. We should be acting as cheerleaders for the initiative and praise what is a bold step forward – and then sit down with the government to help make sure it gets the detail right.
If lessons are learned – and I am optimistic they will be – there is no reason why enterprise zones should not make a significant contribution to economic growth.
There are probably three key considerations:
Pick the right areas and focus Choose sites with potential, not necessarily the most deprived and difficult to develop. No sensible business will want to locate somewhere with no compelling economic logic or potential business advantage.
For example, a prime candidate would be the Digbeth area. It is close enough to the services and infrastructure of Birmingham city centre, and has a compelling economic case for firms to locate there.
Alternatively, the M42 corridor south of Birmingham has national connectivity. Do not neglect the infrastructure links Superfast broadband connectivity is excellent. But, linking the enterprise zone into the wider locality and national community is crucial to avoid creating a stranglehold on the enterprise zone itself.
London’s Docklands, which is often held up as a shining example of what an enterprise zone can achieve, had several false dawns and ultimately required vastly improved infrastructure to link it to the city.
Be wary about displacement effects A lot of comment has focused on whether zones simply move economic activity and jobs around, rather than stimulate new growth. Tax breaks also need to be passed through to the company, rather than “creamed off” by the property owner in the form of higher rents.
In the past, it was not unknown for landlords to set rents at a level just below the combined rent and rate figure for comparable premises outside the zone. This is not a 1980s revival show.
It should be seen as an exciting new opportunity, and we should all get behind the plans for enterprise zones and make them work.
Steven Byrne is chief executive of Birmingham-based MCD Developments
This article was published in propertyweek.com