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Government announces £59m to aid enterprise zones
A £59m pot to get ‘enterprise zones’ up and running was unveiled today (Monday, February 25) – two years after ministers insisted no direct funding was needed.
The region’s two zones – covering most of the Tees Valley and pockets of Tyne and Wear – will be eligible to bid for a slice of the cash.
The loans can be used to build link roads, reconfigure sites, install utilities such as electricity and water; or to reclaim contaminated land.
Eric Pickles, the Communities Secretary, said the cash would allow successful bidders to turn “shovel ready sites into job ready sites”, to trigger economic growth.
But Labour was quick to brand the move a stunning U-turn, given that – when enterprise zones were first announced – they were refused any upfront cash.
The government was sharply criticised for claiming the only help they required to succeed were generous tax breaks, to encourage companies to move in.
The original enterprise zones, in the 1980s and 90s, received a total of £386m in capital costs, mainly to buy land and build infrastructure.
Tom Blenkinsop, Labour MP for Middlesbrough South and Cleveland East, said: “It is only now, with the economy verging on a triple-dip recession, that the government decides to fund enterprise zones.
“However, I fear this funding will be too little too late."
But the department for communities and local government (DCLG) denied the £59m pot was created because of fears that enterprise zones will struggle.
It insisted the North-East zones were making “significant progress”, pointing to investments including:
* Tees Valley - Durable Technologies Limited, which designs energy efficient lighting systems and plans to triple its workforce over the next five years.
* North-Eastern – the recent completion of Japanese firm Vantec’s new logistics centre at Sunderland, which hopes to employ 230 people within two years.
A DCLG spokeswoman said the zones had already received cash from other sources, including the regional growth fund (RGF), adding: “It is not correct to say they haven’t had access to funding.
“But Enterprise Zones are operating in tough conditions - making it harder to raise private investment - and we providing a long-term investment to help speed up delivery of those sites.”
The 24 zones, spread across 142 sites, offer tax incentives and have simplified planning rules, as well as superfast broadband, in a bid to attract businesses.
Mr Pickles has told local enterprise partnerships (LEPs) – partnerships and business and council leaders - to have delivery plans for all 24 zones in place by April.
The 12 scattered sites of the Tees Valley zone are intended to help create and support up to 1,200 jobs in the North-East, by 2015.
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