Agenda item

Enterprise Zones

To provide an overview of the development and key achievements of the Hereford Enterprise Zone as a basis to identify lessons learnt as the council now seeks to establish additional employment land across the wider county, such as the proposed development of Ross Enterprise Park.

Minutes:

The committee considered a report on Enterprise Zone. The Chairperson introduced the officers to present the council’s report.

 

The principal points of the discussion are summarised below:

 

  1. The Service Director, Economy & Growth noted that the main focus of the work was to address the lessons learned from the successful development out of Hereford Enterprise Zone, rebranded as Skylon Park, from around the last ten years. 

 

  1. The Managing Director Skylon Park reiterated the intention of the report to set out the background and history to the Enterprise Zone and the approach that has been taken to for Rotherwas and Hereford Enterprise Zone.

 

  1. The choice that was made was to set up an independent, strategic, non-trading and non-asset owning limited company, chaired by the private sector to oversee the marketing promotion and advocation for the enterprise zone. Therefore, a company was set up, arms-length from the council, to take forward the support and approach to raise the profile and identify potential sales.
  2. A Local Development Order was created which then gives presumption in favour of planning permission for certain classes of development.
  3. There is a board and small support team with a connection back through the economic development team into the various parts of the council including legal and finance. The enterprise zone company makes a recommendation and formal decisions are taken by the council. The support teams’ budgets remained with the council and the council held the decision-making processes that sat behind land sales and budgets that support the enterprise zone.
  4. In the case of Rotherwas, there is a need to invest in the land to make it investable.
  5. In relation to lessons learnt, a number of areas were touched upon as areas that could be learned from including the consideration of each location is important and therefore business interest and the type of business interested in locating in that particular location is highly relevant. Ross is more accessible to the motorway network than Rotherwas.  Additionally, the establishment of local governance is important in terms of private sector and local stakeholder involvement and thus it is important to establish clear terms of reference for any board or partnership.  

 

  1. The Service Director, Economy & Growth clarified on the ownership structure that it is council owned land but the council will sell the freehold of sites to interested businesses which is the preference of business to own and invest in the develop and then own the land. The council will then be responsible for the wider management of the estate and will be for the foreseeable future.

 

  1. In response to a question on what is happening to the saving of business rates and what happens to that money, the Service Director, Economy & Growth noted that there is a time lag between investing in the process before receiving significant amounts of income generated. The government requirement is that any of the retained business rate above the 50% that funds council services has to be spent on economic development activities that can be across the county not only the enterprise zone. There is currently a review with the Cabinet Member Economy and Growth and the Cabinet on how and when that money can be invested to support economic activity across the county.

 

  1. In response to a question about whether the company or business plan comes first, the Managing Director Skylon Park confirmed it was the company first. However, before that, the council needs to be clear about what powers it wants to give out to another organisation. With the enterprise zone limited, decisions on land sales and the budget that supports it remains with the council.

 

  1. In response to a question about what the timeline is for establishing the management company and whether it will be happening before workmen start on-site, the Service Director, Economy & Growth noted that the company that has worked on the Hereford Enterprise Zone has focused on the promotion of the enterprise zone and the land that is ready to be sold. When businesses come forward for that land, the expertise around the table helps to consider the placement strategy to identify on a case-by-case basis whether those businesses are right to deliver jobs in the right sectors for the county. Currently, for Ross Enterprise Park, work is ongoing to develop the physical environment prior to the bringing forward of the role of the board to attract the right type of businesses on there. It is hoped that work will begin on-site in Spring 2025 with an approximate 12-month period to create the development ready plots.

 

  1. In addition, the Managing Director Skylon Park noted that once activity starts to happen in terms of infrastructure investment in opening the site that will transform interest levels. By Autumn 2025, it is hoped that there will be clarity in terms of businesses wanted to see there, how to approach them, and how to market. The company itself is a simple structure to put together.

 

  1. The Chairperson acknowledged that it would not be difficult to set up, however, it is important who is on that board to steer the company and that should be ready in time when people arrive on site.

 

  1. The Managing Director Skylon Park added on Ross that the initial investment is to open up 4 acres, the planning permission is for over 25, and there is a lot of land allocated for employment land purposes immediately adjoining the location. The structure needs to be looked at in terms of the longer-term perspective and not only the initial investment.

 

  1. The Service Director, Economy & Growth noted that in addition to Ross Enterprise Park, there is consideration of how to apply the lessons learnt to the county as a whole and that is more reflective of how progression is made in terms of the Local Plan and the National Planning Policy Framework (NPPF) consultations on mandatory housing targets.

 

  1. The Chairperson asked how much has been spent of the money that has been allocated in the current financial year, how much will be carried over, and what will be asked for in the revenue budget next year to make sure that adequate funding is allocated to lead the development and delivery.

 

  1. In response, the Service Director, Economy & Growth noted that:

 

  1. In the capital programme last December, £12m was allocated in terms of capital receipts funding for development of employment land across the county - £8m has been ringfenced to do this first phase of development in Ross.
  2. There is a Cabinet Member decision which allows £500,000 to be spent on the finalisation of designs and going through the procurement process which will take proceedings through until March.
  3. Another Cabinet Member decision will be required once procurement has taken place to appoint a contractor to spend the other £7.5m on the investment on infrastructure into that site.
  4. In terms of revenue budgets, there is some allocation within the economic development budget to support the development of employment land which could help establish the board, business plan, and operation.

 

  1. In response to a question on the possibility of work showing value resulting from the enterprise zone, the Service Director, Economy & Growth noted that resource has not been allocated into commissioning an external study on the impact of the Hereford Enterprise Zone but it is something that could be done in the future.

 

  1. In relation to a question on the ownership of the site as referenced in paragraph 4 of the report, the Managing Director Skylon Park clarified that the reference was in relation to the origin of the enterprise zone. There are council assets which have been built and retained including Skylon Place, Skylon Court, and the Shell Store. Individual plots have been sold off and businesses have been insistent in owning the freehold for those plots.

 

  1. The Head of Economy and Regeneration added that in relation to the potential study on the impact of the businesses would be useful. It was clarified that when the businesses locate on to the enterprise zone, the council undertakes a key account management approach where a long-term relationship is developed with the businesses to see how they are progressing.

 

  1. It was noted that the lessons learnt from neighbouring industrial and economic strategies would be helpful in comparing and contrasting with business parks in neighbouring counties.

 

There was a short adjournment to enable committee members to consider potential recommendations. The meeting recommenced and the following resolutions were agreed by the committee.

 

Resolved: That Herefordshire Council to:

 

  1. Create a management company with a volunteer board for Ross Enterprise Park by 31 March 2025, in order to develop the park’s business plan with officer support.

 

  1. Ensure adequate revenue funding is allocated in 2025-26 to lead development and delivery of Ross Enterprise Park, including management company support.

 

  1. Consider the business case for retaining some or all of the freehold land as an asset for Herefordshire.

 

  1. Retain at least one unit as a business incubation centre for south Herefordshire.

 

  1. To collect data to measure the economic and social impact of Hereford Enterprise Zone, to compare and contrast with business parks in neighbouring counties.

 

Supporting documents: