​The local economic impacts of Enterprise Zones and Area-Based Initiatives

Last week we held a roundtable session at Arup's London office to discuss the emerging findings of our forthcoming review on area-based initiatives. It was a very well attended session (so much so, we ran out of lunch!) with animated discussion, so thank you to all of those who joined us from LEPs, local authorities, central government, academia and consultancy.

The review will cover all of the high quality impact evaluation we found on the impact of policies based on geographic areas (excepting neighbourhood renewal which we have already covered in a previous review). In practice, this means we look at enterprise zone type policies and other regionally targeted funding packages – such as EU Objective 1 or Regional Selective Assistance.

Henry outlined the emerging findings, which we are now finalising and expect to publish before Christmas. Andrew chaired a lively discussion with questions fielded by the WWG team including our lead academic for this study, Dr Helen Simpson. The review looks at what the evaluation evidence tells us about the GDP, employment, unemployment, wage, property and firm entry impacts of area based initiatives. It also considers the extent to which those impacts are additional or displaced.

The open discussion ranged widely touching on questions such as "what influences firms' location decisions?", "will business rate retention make local areas more or less keen to develop enterprise zones?", and "are benefits of reduced business rates really the businesses themselves or are they likely to be capitalised into land and rental values?". A representative of one Local Enterprise Partnership pointed out that in his area, the tax incentives available to businesses located within the enterprise zone often went unclaimed and, anecdotally, the benefits of co-location were what really attracted businesses. There was also a lot of discussion about the extent to which OECD evidence from existing schemes could be applied to the UK. We’ll certainly be able to address some, although not all, of these issues in our review.

The session felt a little like the end of an era; our review of Area Based Initiatives marks our twelfth and final systematic review to be published – the culmination of around half a million articles sifted, 12,000 longlisted, and 1,400 shortlisted and reviewed in full. In the new year the focus of our work will shift to developing toolkit reviews, shorter pieces that review evidence on specific policy design elements. We’ll explain more in a forthcoming blog post, but we intend that these will continue to be user-led and based on the same kind of approach to systematically identifying the relevant evidence. Watch this space!

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