DCLG announced they have 22 bids for the last coveted 10 Enterprise Zones (EZs). With more than twice as many bids as there are spots for the new EZs, Government will need to be particularly picky in choosing the sites.
How to choose the final 10
Learning from the past, a few lessons should be considered in the selection process (outlined in our paper What Would Maggie Do?):
- EZs should be in urban areas or provide easy access to them—this better links jobs to people and helps businesses create links with each other
- Choose EZs with realistic growth potential rather than unrealistic aspirations
- Be clear how the EZ fits within a wider economic strategy—the Local Enterprise Partnership (LEP) should have done this as part of their application
- Avoid sector-based EZ schemes which can try to create advantages where they don’t naturally exist
Managing expectations
The 38 EZs during the 1980s-90s created 58,000 jobs; to date, 12 published bids for new EZs state they can create a total 160,000 jobs. We must be realistic about how EZs can benefit local economies and what they simply cannot do. Without incentives to expand employment, skills or innovation, they may not focus on fixing the root of some of the UK's most difficult economic challenges.
The real opportunity for EZs lies in how their LEPs invest business rate revenues. By allowing LEPs to pool money and fund specific projects, LEPs can target the issues which have held back their economic growth such as improving skills, linking people to jobs, and innovation support.
Enterprise Zones will not be the spark that jumpstarts the UK economy. If selected and managed correctly, though, they can be used to support economic growth in the UK’s cities.
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