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News Release

London

2011 Budget: Jones Lang LaSalle React to Enterprise Zones and Planning Measures


London, 24th March 2011 - The Chancellor of the Exchequer George Osborne announced in the 2011 Budget the creation of 21 new enterprise zones in Birmingham, the Black Country, Leeds, Greater Manchester, Tyneside, Bristol, Derbyshire, Nottinghamshire and Sheffield. The remaining 10 are due to be announced during the summer.
 
Under the scheme, businesses that move into an enterprise zone will benefit up to a 100% discount on rates, worth a maximum of £275,000 over a five year period. Businesses could also benefit from additional capital allowances in enterprise zones where advanced manufacturing dominates.
Andrew Hume, Director in the Development and Asset Strategy team at Jones Lang LaSalle, said: “The new identified enterprise zones within local enterprise partnership areas are broadly to be welcomed. The 100% business rate relief is good news but the £275,000 cap will prove less meaningful for more substantial occupiers/ inward investors. While arrangements for capital allowances relief should help encourage investment, this incentive is limited to high value manufacturing.”
 
“This will be helpful to the area which has some significant assets in the London City Airport, ExCel and future Cross Rail infrastructure but which to date has seen a modest rate of regeneration delivery.  The public sector owns significant tranches of land in this vicinity and this should be used in the context of a simplified planning regime and business rate discount to attract new occupiers and drive renewal. We welcome the further confirmation as to the introduction of TIFs although the proposals for Tax Increment Financing remain unclear. What is required is a cocktail of incentives for these locations which could include the use of public sector land for example through the disposal/ use of RDA assets.”
 
“More generally, these measures do not address the continuing issues related to housing funding and delivery, particularly in the South East of England, which will be further impacted by reduced levels of public expenditure.”
 
George Osbourne also outlined new measures to planning legislation including proposals to make conversion of commercial premises to residential use easier, streamlining planning applications with a 12 month guarantee on all applications, a presumption in favour of sustainable development and a pilot land auction model.
 
Guy Bransby, Head of Planning at Jones Lang LaSalle, said: “The Government clearly recognises that our planning system is not as efficient and productive as it should be. Measures to streamline the system and speed up decision making are promising, especially the 12 month guarantee to process all applications including appeals. The presumption in favour of sustainable development is welcome, but this needs to be properly defined. There are fears that this will contradict the localism agenda and lead to confusion.”
 
“Moves to make it easier to convert redundant commercial buildings to residential use accord with sustainability objectives and making the best use of land. It should also help meet house building targets, albeit it is unclear how Local Planning Authorities and local communities will react. The retention of Green Belt policy is not a surprise, although it should not represent a total restriction on development. As always, 'the devil will be in the detail' which will emerge over the coming months. Until then, reaction will be a cautious welcome, but frustration that it will take time for the benefits to be realised.”