Manufacturing and growth hotspots targeted for extra business investment
1 May 2014 10:14 AM
The
government yesterday (30 April 2014) confirmed which parts of the UK have
successfully won Assisted Area status. The status makes local businesses
eligible to bid for additional funding and tax breaks to create jobs, invest in
new premises or machinery and grow.
Manufacturing centres including
Derby, Huddersfield, Portsmouth and Scunthorpe have now been added to
the Assisted Areas map,
in addition to the large parts of north-east England, south Yorkshire,
Merseyside, Strathclyde, the west Midlands and the Welsh Valleys, which were
already benefiting from being on the map.
The government has also added
Leeds and Manchester to the map to help drive business growth across the north
of England. And coastal towns such as Arbroath, Blackpool, Hastings and
Lowestoft have also been included on the new map to help promote
regeneration.
Business Minister Michael Fallon
said:
Assisted Area status can be a
shot in the arm for growth and jobs across the UK. It makes local businesses
eligible to bid for additional funding and support that can help them to create
jobs, invest in new premises or machinery, develop and grow.
We listened carefully to local
groups to identify places where regional aid can have the biggest impact and
help to rebalance the economy. The regeneration of a range of industrial
centres, coastal and urban areas has been given a boost today.
Assisted Area status makes
businesses eligible to apply for regional aid, which is typically offered as
capital investment for businesses in less prosperous local economies.
Programmes in England that offer regional aid include the Regional Growth
Fund (RGF) and the Advanced Manufacturing Supply Chain Initiative
(AMSCI).
Assisted Area status does not
guarantee regional aid funding. Businesses in other parts of the country can
still receive support, including RGF andAMSCI, for a wide range of
projects.
Eligible areas were selected
based on a combination of economic need and economic opportunity. Places with
the potential for business growth, particularly manufacturing, have been
favoured.
There have been 2 consultations
on which areas should qualify, with input from Local Enterprise Partnerships
and local authorities ensuring that local intelligence was a key driver in the
process.
The government’s Assisted Areas
map is still subject to Commission approval and is expected to take
effect on 1 July 2014.
Notes to
Editors
-
The new Assisted Area Status
Map is due to come into force on 1 July 2014, subject to formal
approval by the European Commission.
-
Under the Commission’s new
Regional Aid Guidelines, issued in June 2013, the UK’s overall assisted
area population coverage will rise to 27.05% from 23.9% from 1 July
2014.
-
Assisted areas are selected
based on a combination of Commission guidelines, the potential to benefit from
regional aid, and an assessment of economic need.
-
The government’s
response to the second stage of the consultation, was also published
yesterday,
-
Regional aid is allowed under
state aid rules to promote cohesion and convergence between poorer and richer
parts of the EU. It is used to support capital investment in assets and to
support new employment.
-
The map identifies
‘a’ and ‘c’ areas. Cornwall and the Isles of Scilly and
west Wales and the Valleys are predefined as ‘a’ areas by the
Commission, based on GDP per capita relative to the EU average. The UK
government cannot define other parts of the UK as ‘a’
areas.
-
Parts of the Scottish Highlands
are predefined by the Commission as a ‘c’ area due to sparse
population. Other ‘c’ areas have been proposed by the UK government
including Portsmouth and Ellesmere Port in Cheshire, and the 100% coverage
already awarded to Northern Ireland for the medium term.
-
‘a’ areas and
‘c’ areas are named after the relevant sections of the Treaty on
the Functioning of the European Union, Article 107 (3) (a) and (c). These
sections of the Treaty enable member states to grant state aid to promote
economic development.
- Assisted areas are those areas
where regional aid can be offered to undertakings, typically businesses, under
European Commission state aid rules. In the UK, the main examples of schemes
offering regional aid are:
- Regional Growth Fund - operates
in England and supports projects and programmes that are using private sector
investment to create economic growth and sustainable
employment
- Regional Selective Assistance -
primary Scottish for regional aid and is administered by Highlands and Islands
Enterprise and Scottish Enterprise. Grants may be given in conjunction with
support under other aid frameworks, for example R&D or skills and
training
- Welsh Government Business
Finance - offers discretionary financial support to eligible businesses in key
business sectors and certain strategically important projects outside these. It
helps fund capital investment, job creation, research, development and
innovation and certain eligible revenue projects throughout
Wales
- Selective Financial Assistance -
provides support for investment in Northern Ireland by indigenous and foreign
owned companies that creates, maintains or safeguards employment. The scheme
aims to achieve higher levels of business growth, leading to long-term high
quality employment
- Assisted Areas status can also
offer certain tax allowances:
- Business Premises Renovation
Allowance (BPRA) is predicated on Assisted Area status. It gives an incentive
to bring derelict or unused properties back into use, by giving an initial
allowance of 100% for expenditure on converting or renovating unused business
premises in a disadvantaged area.
- Enhanced Capital Allowances
permitted at some Enterprise Zones are reliant on Assisted Area
status.
- The government’s long-term
plan is to build a strong, more competitive economy and a fairer society.
Industrial
Strategy gives impetus to the plan for growth by providing businesses,
investors and the public with clarity about the long-term direction in which
the government wants the economy to travel.
See also first achievements and future priorities of the industrial
strategy.