Birmingham to get an Enterprise Zone

Birmingham is to have an Enterprise Zone, offering businesses discounts on business rates, superfast broadband and simpler planning rules, the government has announced.

The city was named on 28 July as one of four new zones, along with Bristol, Leeds and Sheffield, chosen by their local enterprise partnerships. Together, the four zones could create more than 24,000 jobs by 2015, the government says.

What an Enterprise Zone offers

Businesses that set up in the zones will benefit from discounts on business rates, new superfast broadband, lighter planning controls and the potential for enhanced capital allowances on investment in plant and machinery.

The zone in Birmingham is expected to cover sites in the city centre, and will be run by the Greater Birmingham and Solihull Local Enterprise Partnership, which brings together business leaders and local councils.

The Plan for Growth

The zones are part of the government's Plan for Growth, announced in the Budget in March, which aims to rebalance the economy and encourage private sector growth outside London and the south east. The government says it has already met or reached significant milestones on more than 100 of the 137 reforms in the plan.

The Prime Minister, David Cameron, said: "I am determined that we should drive growth in every town, city and community in the country. For too long our economy has been dependent on just one corner of the country and too few industries."

The Business Secretary, Vince Cable, said: "One of the most important things we can do to help private businesses create jobs and boost growth is to reduce the barriers businesses currently face and give them extra flexibilities to operate. Enterprise Zones will do exactly that."

Why it matters for Birmingham

Birmingham has been hit hard by the recession, and unemployment in the city is well above the national average. The loss of manufacturing jobs over recent decades, including the closure of the MG Rover plant at Longbridge in 2005, has left many areas in need of new investment.

Business leaders hope the zone will help attract companies to the city centre, particularly in sectors such as financial and professional services, digital and creative industries, and advanced manufacturing.

Earlier zones

Enterprise Zones were first introduced in the 1980s, when several were set up around the country to encourage investment in run-down areas. The new zones are intended to be more targeted, with money raised from business rates growth kept locally and reinvested in the area.

What happens next

The local enterprise partnership will now work on the detail of which sites will be included and how the zone will operate. The government plans to announce the locations of a further ten zones shortly.

For Birmingham, the announcement comes alongside major projects already under way, including the rebuilding of New Street station and the construction of the new Library of Birmingham.