Commenting on John Swinney’s Enterprise Areas announcement, Doug Smith, Chairman – CBRE Scotland, said:
“The announcement today by the Scottish Government that a number of new Enterprise Areas are to be designated is welcome news for the Scottish economy and the Scottish property sector.
“Some observers may wrongly look to previous Enterprise Zones as the template for this latest tool in the economic toolbox, but in reality these new Enterprise Areas are much different.
“The focus on this occasion has been to identify sectors of the economy offering growth and, by implication, employment potential. Having identified these, Enterprise Area status is then applied as a means of accelerating and enhancing that potential in a limited number of locations.
“Consequently, the support and intervention of these new Enterprise Areas is focused more on the demand side than supply side in terms of the commercial property sector.
“There are no major tax incentives for developers or investors, but in certain locations it is anticipated that there could be enhanced capital allowances for expenditure on plant and machinery. As an alternative, rates relief, where available, for occupiers is likely to capped to fit within EU State Aid limits. This will mean that the rates relief benefit limited to £55,000 per annum over 5 years is more likely to be of support to businesses occupying smaller premises.
“The benefits that are available should help to stimulate investment by manufacturers and other employers. There is a clear indication the new Enterprise Areas reflect the key sectors approach which is a fundamental plank of the Scottish Government’s economic strategy and, perhaps unsurprisingly, there is an emphasis on the renewable sector where the dual prize of meeting environmental targets and creating employment is set against the urgent need for massive capital investment.
“Worthwhile having? No question; any mechanism which supports and encourages new investment is clearly to be welcomed.
“A quick fix to the economic growth challenge? Most likely not.
“In England, the first new Enterprise Zones were announced last March, a second batch in the summer following a competitive process and another two later in the year.
“With a similar emphasis on building on positive growth opportunities and demand side support, observers note that visible and tangible progress in some of the English Enterprise Zones has not been as rapid as might have been hoped – despite selecting locations though to be ‘shovel ready’.
“So there may be a need to manage expectations in Scotland also. But amongst other strategies and plans, of which there have been a number announced in recent times – strategies for infrastructure, regeneration and cities for example – Enterprise Areas will be a valuable addition. And a welcomed one.
“Economic development is a long term challenge and it will be a combination of interventions and agencies which collectively will begin to make a difference in the areas of Scotland now to benefit from this new status.
“And if there is one undeniable fact it is that the need for new employment in many areas of the country increases with every passing month. We should welcome these new Enterprise Areas and seek ways to use the benefits to maximum effect.”