As was widely touted before the Budget 2011, LB Newham has received Enterprise Zone status. The Budget contained proposals for 21 Enterprize Zones to be introduced in total, with a limit of one per Local Enterprise Partnership allowed. Given that London has a single LEP operating across the city, Chancellor George Osborne gave Mayor Boris Johnson the chance to select a site in London for the scheme, and he chose the Royal Docks in LB Newham for the role.
One hundred and twenty five hectares of land in the Royal Docks will benefit from the measure, where reduced business rates and other regulatory breaks over a period of five years will be implemented in the hope of boosting external investment in the area. To find out more about the planned development of this area, see the Major Projects section of the website for site visit reports and development overviews.
So how effective will the Enterprise Zone be? The Mayor has claimed that this could lead to the creation of thousands of additional jobs in the region. However in truth, given the extent of investment taking place in the wider area in relation to the Olympics, it will be very difficult to assess just how much of an impact these new measures have, over and above what levels of investment might have occurred in any case. For example, neither the ExCel Centre, nor the recently announced Siemens Pavilion, required the kind of incentives included in Enterprise Zones to persuade the respective investors of the opportunities presented by having a presence in this part of East London. With the scale of infrastructure development taking place at the Olympics, and in nearby Stratford, this is an area of regeneration in London with plenty going for it.
Nevertheless, the Royal Docks area does have significant structural challenges, including areas of distressed land left over from an industrial legacy, and proponents of the Enterprise Zone will no doubt argue that businesses have an even greater incentive to set up shop and create a thriving new urban centre in this important corner of the capital.
Much of this comes down to what the primary purpose of Enterprise Zones is. If they are meant as a last resort for propping up or compensating struggling local economies as they transition to embrace new growth industries, then perhaps there are other parts of the capital more deserving of Enterprise Zone status. If, however, they are about building on strong foundations to ensure strong growth in the future, then the Royal Docks, located next to so much existing and projected investment and opportunity, could be just the right location for the introduction of such incentives.
Regardless, other parts of London engaged in regeneration will likely insist that this as another example of East London getting preferential treatment over and above other regions of the capital. It will be interesting to see whether in the months ahead, the Government declares London an exception to the one Enterprise Zone per LEP guideline, should there be a strong reaction to today’s announcement.
Watch this space.