While developers agree enterprise zones have the potential to act as a catalyst for economic growth, they are urging government to offer a menu of incentives that can be adapted for each area, and give greater clarity on how tax increment financing can be quickly introduced in the zones to help fund vital infrastructure.
Announced by Chancellor George Osborne as part of the 2011 Budget for Growth in March, the zones offer simplified planning rules, super-fast broadband and tax breaks for businesses. Government estimates they will boost local growth and create more than 30,000 new jobs by 2015.
Michael Chambers, associate director of special projects at the BPF, said: "While investment in enterprise zones is welcome, the incentives on offer are not very exciting and appear aimed more at the occupier rather than the developer. Therefore they may not be enough to kick-start the speculative development needed to create the offices and industrial units within the zones for new businesses to occupy.
"Certainly they do not match the benefits available in the 80s and 90s, and as things stand it’s difficult to imagine that enterprise zones will meet the economic and job creation goals the Government is seeking.
"We would urge the Government to devise a flexible set of incentives that can be tailored to the different needs and contexts of different zones."
Andrew Yates, partner and head of regeneration at Berwin Leighton Paisner, said: "Having worked on Enterprise Zones projects in the 80s and 90s and seen their ability to kick-start development and attract investment, I’m sure the property industry will work hard to see them work.
"However, it hopes the Government will learn the lessons from their 80s counterparts and ensure the incentives on offer this time around are sufficient and adapted to suit the current economic environment.
"Of particular interest to the market is the inclusion of tax increment financing in the current enterprise zones proposals. We need as much clarity as possible about TIF and the other tax benefits."
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