Budget 2011: enterprise zones, planning reforms and land auctions stand out

March 23, 2011

The creation of 21 enterprise zones, major reforms to the planning system and a pilot of land auctions starting with the public sector are among the key measures for local government in the Chancellor of the Exchequer’s “budget for growth”.

George Osborne confirmed that ten new urban enterprise zones would be set up in the following Local Enterprise Partnership areas: Birmingham and Solihull; Leeds City Region; Sheffield City Region; Liverpool City Region; Greater Manchester; West of England; Tees Valley; North Eastern; the Black Country; and Derby, Derbyshire, Nottingham and Nottinghamshire.

London will also have an enterprise zone and be able to choose its site, while a competitive process will be run among interested LEPs for ten more zones.

The Chancellor said a range of policy tools would be made available for the 21 zones, including the retention of all business rates growth within the zone for a period of “at least” 25 years. These funds will be shared by the local authorities in the LEP area to support their economic priorities.

Osborne said there would be government and local authority help to “develop radically simplified planning approaches in the zone”. The government also intends to work with individual LEPs to consider the use of tax incremental finance to support the long-term viability of their zone.

On the planning front, the Budget document claimed the system had “held back investment and created distortions in the way that businesses compete, deterring development and growth”.

It said a number of measures would be introduced to streamline the planning applications and related consents regimes, removing bureaucracy from the system and speeding it up.

These are to include a 12-month guarantee for the processing of all planning applications, including any appeals. A fast-track planning process for major infrastructure applications would be ensured “through the Major Infrastructure Planning system”, it added.

A pilot of land auctions will meanwhile be carried out, “starting with public sector land”.

In addition, the Budget document said that the government would work with local authorities to expedite planning decisions for surplus military land and other public sites suitable for housing, also testing “build now, pay later” techniques to quicken delivery.

It estimated that these proposals – alongside the presumption in favour of sustainable development – will potentially allow the Ministry of Defence to realise up to £350m in estate disposals and enable the delivery of up to 20,000 new homes by 2014/15.

Other headline announcements include:

A “powerful” new presumption in favour of sustainable development will mean that the default is “yes”
A consultation on proposals to make it easier to convert commercial premises to residential
Councils will receive £100m in new funding to tackle pot-holes
The launch of a public thematic review to reduce the stock of regulation. The presumption will be that all regulations identified as burdensome “will be removed unless good reasons are given for them to stay”
The proposals of Lord Young’s review of health and safety review will be implemented.

The Chancellor also said the government had accepted the recommendations of Lord Hutton’s Independent Public Service Pensions Commission as a basis for consultation with public sector workers, trades unions and others “recognising that the position of the uniformed services will require particularly careful consideration”.

The government will in the autumn set out proposals that are “affordable, sustainable and fair” to both the public sector workforce and taxpayers, Osborne added.

Other important announcements include support for 10,000 first-time buyers as well as continued assistance through the Support for Mortgage Interest scheme for homeowners facing difficulties. The Chancellor was also forced to downgrade the forecast for how much the UK economy would grow in 2011.

Osborne said the Budget was based on three principles: a strong and stable economy; growth; and fairness.

He told the House of Commons: “Today’s budget is about reforming the nation’s economy, so that we have enduring growth and jobs in the future. And it’s about doing what we can to help families with the cost of living and the high oil price.”

Philip Hoult